Bradford & Bingley shareholders strike back!

Jon_McKnight

Lost a fortune in Bradford & Bingley shares? Not quite convinced that the bank should have been nationalised so soon after the CEO said it was "well capitalised" and "fit for purpose"?

Then you may find comfort in an open letter to Gordon Brown, Prime Minister and prime suspect in The Great Bradford & Bingley Bank Robbery, asking him the tough questions that no journalist has yet put to him.

As someone who lost £3,700 in B&B shares that I bought the day before it was unexpectedly nationalised, I'm not taking this lying down.

I was quoted widely in the Press and interviewed on ITN on the morning of the nationalisation, and I'm pressing for an interview with B&B CEO Richard Pym to discover the truth.

If he agrees that B&B need not have been nationalised, it should improve our chances of winning full compensation for having our shares "extinguished", as the Treasury so charmingly put it.

If you're determined to get justice, too, please take a look at my (non-commercial) blog at http://jonmcknight.typepad.com/jon_mcknight/bradford-bingley/

And if you feel as aggrieved as I do about this outrageous theft of our money, please add the blog link to any other relevant forums you use.

Jon

Riq

Thems the breaks with equity shares. It's unlikely you will get compensation because of what equity shares are and what they mean.

Risk, reward and return.

LGG_2

isnt buying shares all about taking a risk.they can go up,down and you takethechance when you buy them. thats why i wont go near them lol

Jon_McKnight

Sorry, but I don't agree. I'm aware that buying shares is risky, and I was prepared to lose everything if the company (B&B in this case) had gone bust.

But it didn't. As anyone who has read my blog at http://jonmcknight.typepad.com/jon_mcknight/bradford-bingley/ will know, the risk of a company being nationalised when it was still capable of trading solvently for some time was an entirely new risk that had not previously existed until Gordon Brown made up a new rule.

So you would not have heard a peep from me if B&B had simply gone bust. But as it didn't go bust, I'm very aggrieved.

Shareholders are supposed to be able to control the future of a company, yet there was no Extraordinary General Meeting, not even a consultation.

And while Gordon Brown was anxious to protect depositors, why should he show such indifference to shareholders?

There are almost a million of them, and they all have a vote they will use at the next election.

And consider this: if shareholders looking at what has happened to the Bradford & Bingley victims decided to take all of their money out of shares, to protect themselves, it would trigger a catastrophic collapse of the stock market, followed by a total meltdown of the economy, that no British Government could ever hope to fix.

Riq

It was nationalised to STOP it going bust and there destabilising yet further the fragile confidence of the banking system as a whole.

So it practically went bust

I could break a dog's legs if I wished and yes it would survive... for a while before it died of hunger.

I love a good metaphor.

Reaper

I confess to only skim reading your blog but a couple of dubious points stuck in my mind.

You objected to the unexpected action of the governement. One of your objections was:

Why were Bradford & Bingley shareholders not consulted in any way about the future of the company in which they had invested their money - and why were they not allowed to exercise their democratic and legal right to call for an Extraordinary General Meeting?

Can you imagine what would happen if there was an announcement that B&B were in trouble and a shareholders meeting would be held in a few days to discuss the problem? Firstly the share price would have dived to zero and secondly the deposits would have gone to zero as scared savers queued around the block to take their money out.

I congratulate the government on its swift and decisive action which rescued the bank.

I feel sorry for the shareholders but they accept risk. Savers don't.

MiserlyMartin

The question of whether or not Bradford and Bingley were capable of trading themselves out of the mess they were in is debatable. However, they did have a flawed business model based on dodgy UK sub prime and buy to let mortgages. I do agree with the OP that the bank should have been left alone to trade or fail by itself.
I am getting rather fed up of Gordon Brown's continued intervention and interference in the UK economy which should be left correct by itself without the huge burden on the taxpayer.
I have the same feelings regarding the merger of the Derbyshire building society and nationwide building society. Members of the Derbyshire have had no say in this decision. Again it is debatable whether the society really could not continue. The last set of accounts suggested that all was okay. It sounds to me that nationwide has taken advantage of the opportunity that presented itself via Gordon Brown to acquire yet another building society to its portfolio.

philatio

You bought B&B shares hoping to make a profit.
You were warned that the value can go down as well as up.
You sat back and accepted the dividends when the bank was doing well.
It got greedy. The government stepped in at the last minute, only to stop it going bust.
You get what the company is worth, and what you deserve. Nothing.

athy

Buying shares need not have anything to do with greed. It can be a prudent investment to provide secure income. I had held 250 B&B shares for some years. A few months ago I received news of their Rights Issue which would enable me to buy a further 335 at a good price, so that they could raise £400 million in funds. I duly did so. Now it seems that my shares are worthless.
I would like to know several things:
- How the heck did B&B manage to spend £400 million in just a few weeks? Even my wife in a shoe shop could not achieve that.
- Previously I have had shares in companies which have been taken over. The usual form is that I have received notice that the firm which is buying will purchase my shares for (usually) a good price. Why has this not happened with B&B?
- What hope have us shareholders got of either being refunded some of our money, or of being issued with shares in the newly reconstituted B&B?

SouthCoast

Why should the taxpayer help investors in companies with flawed business models?

beingjdc

Jon_McKnight wrote: »

Lost a fortune in Bradford & Bingley shares? Not quite convinced that the bank should have been nationalised so soon after the CEO said it was "well capitalised" and "fit for purpose"?

He was lying.

Hope that clears things up for you.