Below is a letter recently sent (either via email or in the post) from Robin Ashby to all members of the NRSS group.
Dear Shareholder,
Recently I attended a meeting of the UK Shareholders Association, who have also campaigned on this issue. Although we post their regular mailing on our blog (http://nrssg.blogspot.com/) I thought I’d write and give you an update.
Before any offer of compensation is made the Government needs a valuation. It is trying to appoint a valuer, but is reported to be having difficulties because some of the big firms are declining to bid. The reason for this could be twofold; the nationalisation law sets such harsh conditions that the value comes out at zero and shareholders (the very big ones like SRM and RAB, plus a representative number of private individuals) are taking legal action.
Step 1 is what is called an application for a judicial review of the nationalisation law. The Government isn’t fighting the moves for such an application but even so the legal process is very slow.
At the moment, the plaintiffs (shareholders) are awaiting a further response from the Government to its claims. This is currently expected at the end of this month. The plaintiffs then have until around 27th October to respond.
As I mentioned, the Government has agreed not to oppose the application for judicial review. A Consent Order is now needed; this has not yet been issued by the Court.
The hearing before two judges (one from the Chancery Division, the other from the Administration Court) is not expected before 1st December at the earliest. The hearing is likely to last 3-4 days. It is expected that the judgement will be reserved, so will probably be issued in late January next year.
As the court may have something to say about the valuation process, the valuer – even if appointed soon – can’t get to work in earnest until then. There is of course the possibility of plaintiffs appealing to the Court of Appeal or even the Supreme Court (as the House of Lords will be known.)
In the meantime, a valuer may start to establish the procedures that will be adopted before reaching a valuation. This will certainly include the possibility that shareholders – including you – will be able to make representations to the valuer about the method and the value. The valuation process could easily take a year and could also be challenged in court.
In parallel with all of this in the UK, certain non-EU shareholders have lodged a complaint with the European Commission. This seems to rotate around Article 56 and whether the Bank of England acting as lender of last resort is a form of State Aid (which the EU generally doesn’t allow). Throughout the banking sector in Europe of course, governments act as lender of last resort to ensure stability of the system. This could go all the way to the European Court of Justice – again, not a quick procedure.
The current application for a Judicial Review hinges on human rights (on deprivation of property). An argument could also be made from action for damages against the government on the basis that their actions caused and/or exacerbated the original run on the bank and thus nationalisation.
What else can you do? Firstly, and especially if you have any questions, can I urge you to attend the next UKSA meeting in the North East. This will be held on July 17th at 6.30pm in the Banqueting Suite, Civic Centre, Newcastle.
UKSA officers including Chairman Roger Lawson and local campaigner Dennis Grainger(the ex-employee who you may have seen on BBC TV Question Time) will be there. Let me or Roger know if you can come - we are expecting around 100 so far. Incidentally, Dennis hopes that there will be a piece about the campaign on the Politics Show on BBC TV on a Sunday lunch time.
The second thing you can do is to write to the Trustees of any pension fund of which you are a member, urging them to back the campaign for fair treatment. We can provide you with a specimen letter to build upon.
Next, if you haven’t already done so – or even if you have - you can write to your MP asking for a system of fair compensation. As one of the legal advisers has said, there is a moral argument as well as a legal one and a climate of opinion can be seen as important by judges. And if you would like to help the cause even more, see Dennis Gilmour at the meeting and offer to help him – he has a small band of about 6 people backing him up and more volunteers would be very welcome.
In conclusion, just to remind you why this is important. Even if you had the minimum number of shares when Northern Rock demutualised, these were worth over £6000 at their peak early last year. The Government believes you should receive nothing for them. But the Equitable Life campaign, which has been going on four years, shows what can be achieved with persistence when right is on your side. This week, after many trials and tribulations, it is reported that the Ombudsman will say that the Government should compensate those who suffered loss. I was one of them but I still expect it will take more time and trouble before I finally get justice. I hope that like me you will take a long view and do what you can to help the campaign.
With best wishes,
Robin Ashby
Thursday, 10 July 2008
Friday, 4 July 2008
Northern Rock Shareholders Action Group – Meetings for Shareholders
UKSA has arranged two meetings for Northern Rock shareholders:
On Thursday the 17th July commencing at 6.30 p.m. at the Banqueting Suite, Newcastle Civic Centre, Barras Bridge, NE99 1RD - next to the Haymarket Metro and Bus Stations. They understand parking is available in the council’s car park in
On Saturday the 26th July at 10.30 am at St.Columba’s Church,
If you plan to attend either venue then please let UKSA know by sending an email to uksa@uksa.org.uk.
These meetings will contain a briefing and explanation on what UKSA have been doing on behalf of shareholders and the status on the legal action. They will also enable shareholders to ask questions of course. They hope to have a representative of one of the large institutional shareholders in Northern Rock speaking at the
These are the first meetings UKSA has held for shareholders since last November
Wednesday, 2 July 2008
UKSA legal action
An application for a Judicial Review of the Nationalisation Act and the associated Compensation Order was filed on behalf of a representative sample of private shareholders on the 8th May 2008. SRM Global also filed a similar application on that date and RAB Capital subsequently filed such an application in addition (these two companies are the largest institutional shareholders).
A 15 page summary of the grounds for the application can be found on the UKSA website. UKSA continues to recruit members and seek donations to enable this process to proceed.
A 15 page summary of the grounds for the application can be found on the UKSA website. UKSA continues to recruit members and seek donations to enable this process to proceed.
Thursday, 26 June 2008
Northern Rock Shareholders Action Group – Update No. 38 and Notice of Meetings for Shareholders
Meetings for Shareholders
We have arranged two meetings for Northern Rock shareholders:
On Thursday the 17th July commencing at 6.30 p.m. at the Banqueting Suite, Newcastle Civic Centre, Barras Bridge, NE99 1RD - next to the Haymarket Metro and Bus Stations. Note that parking is available in the council’s car park in
On Saturday the 26th July at 10.30 am at St.Columba’s Church,
All shareholders are welcome, but if you plan to attend either venue then please let us know by sending an email to uksa@uksa.org.uk so we can get some idea of likely numbers of attendees (make sure you advise which venue/date).
These meetings will contain a briefing and explanation on what we have been doing on your behalf and the status on the legal action. They will also enable you to ask questions of course. We hope to have a representative of one of the large institutional shareholders in Northern Rock speaking at the
These are the first meetings we have held for shareholders since last November so please come along if you can – there is no charge of course. Press and other media are also welcome. Incidentally if you can’t make these dates, we are planning a further meeting in
Northern Rock Looks into the Conduct of Former Directors
Several newspapers reported that Ron Sandler, the new executive Chairman of Northern Rock, had asked lawyers to look into the conduct of the previous board to see if action should be taken against the former executives. Our view is that this is simply “hot air” as there is no obvious ground for legal action under English law. Certainly on the evidence publicly available, and we have examined this of course, there are no apparent grounds for alleging breach of duty by former directors.
However much shareholders and the public might wish to raise the alleged failings of the former board, English law makes such cases very difficult to pursue so long as the directors acted in good faith and to the best of their abilities. Unless clear examples of fraud or malicious intent can be discovered, they are unlikely to succeed.
This seems more likely to be an attempt to divert attention away from the failings of the Government in handling the Northern Rock crisis, and the moral disgrace of the nationalisation without fair compensation, than a realistic attempt to achieve anything. As we have said before, the over-emphasis on the possible mistakes of the former board detracts from an examination of the main causes of the downfall of Northern Rock.
Monday, 2 June 2008
Lib Dems call for legal action against Northern Rock Directors
From the Sunday Times:
VINCE CABLE, the Liberal Democrats’ Treasury spokesman, has called on the government to launch legal action against the former directors of Northern Rock, over allegations that they “misled” taxpayers.
Cable and Lord Oakeshott, his Lib Dem colleague, claim Northern Rock used unconventional accounting practices that flattered the level of bad debts in its mortgage book.
An investigation by the mortgage bank’s new management has revealed that Northern Rock did not always consider customers to be in arrears until they were more than three months behind with their payments.
The Lib Dems claim this practice undermines the repeated claims by Adam Applegarth, Northern Rock’s former chief executive, that the bank’s mortgage book was of a higher quality than the industry average.
Oakeshott is this weekend writing to Alistair Darling, the chancellor, calling for a full independent audit of Northern Rock’s previously issued accounts. It would be designed to assess whether the Bank of England and the Treasury were misled on the health of the company’s finances when agreeing to lend taxpayers’ money.
Cable said: “Given the amount of public funding that’s been involved, I would have thought there might well be a case here.
“The government tried to argue that all this was caused by events from outer space, that had nothing to do with Northern Rock, and that Northern Rock was run by entirely competent sensible people. It’s subsequently emerged that they weren’t and that they made serious errors.”
Oakeshott added: “I have warned repeatedly in the Lords that taxpayers face a £5 billion to £10 billion black hole. The government are being grossly negligent on behalf of taxpayers in not insisting on an independent audit now to see whether Northern Rock’s auditors and directors are liable for misleading interim accounts and statements issued last autumn.”
Northern Rock’s most recent trading statement revealed that the level of arrears in the bank’s mortgage book had doubled in the first four months of the year.
Ron Sandler, the bank’s executive chairman, said that some of the bank’s controls on arrears had been “inadequate” and that new accounting policies being introduced would see arrears levels “move much closer to the industry average”.
Sandler also said, however, that this would not affect the bank’s previously published report and accounts.
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