Northern Rock Share Discussion Threads

[qantas] 07/10/2009 15:57

Northern Rock Shareholders Action Group
Newsletter No. 62

In This Issue
Further Appeal Filed
Valuation Status
Re-mutualisation of Northern Rock
Daily Mail Article
Quick Links
Action Group Details and Registration

Campaign Donation

Further Appeal Filed


A further appeal of the Judicial Review judgement on the challenge to the terms of reference for the valuation laid down by the Compensation Order and the Nationalisation Act has been filed with the Supreme Court. Note that the Supreme Court has very recently taken over from the House of Lords as the final court of appeal in the UK. However, there would likely be the chance of a further appeal to the European Court of Human Rights if this step also fails. We will of course try to keep you informed on the progress of the case.
Valuation Status
Many of our supporters are wondering why the independent valuer, Mr Caldwell, has not published his valuation, and so are we. It is now over a year since he was appointed, and most company valuations would not normally be expected to take longer than a few weeks, let alone months. Even the legal action that has challenged the valuation assumptions is not a justification for delay because Mr Caldwell indicated that this would not stop him from publishing a figure. So we recently sent him a letter asking when we might get a result and what the reasons are for any delay. You can see a copy of it here: www.uksa.org.uk/Caldwell_Letter_Sept2009.pdf

A reply has been received which states that the valuer is "continuing to make progress", but that he is "not currently able to estimate when the outcome of the valuation will be announced". No specific reasons are given for this extended timescale and delay. You may care to write to your Member of Parliament and request the Government encourages the valuer to expedite the matter. It is really totally unreasonable that it should be taking so long.
Re-mutualisation of Northern Rock

The Building Societies Association have promoted the idea of "converting failed financial institutions into mutual organisations" via a document that was recently published. See www.bsa.org.uk/docs/presspdfs/remutualisation.pdf . It's an interesting idea, whereby control of such companies as Northern Rock might be returned to the "members" who hold accounts with the organisation, but the assets would not be returned. It covers the situation of Northern Rock at length, but it of course does not attempt to explain why the company should not simply be returned to the former shareholders who were "members" of the company. The main merit in this proposal seems to be the claim that it would provide for more financial stability, more prudent financial policies and more diversity of control.
Daily Mail Article
The Daily Mail have included an article on their "Thisismoney" website making the case for fair compensation for the shareholders in Northern Rock. This is by Dennis Grainger, the lead small shareholder claimant. It can be found online at:

[fastray] 03/10/2009 09:00

When will we hear any news on compensation, this looks like a railtrack all over again..years not months

[qantas] 21/9/2009 16:57

Someone high up must have had a large short in this stock. They then leaked the news to Preston to make money?
Think they should look at all the shorts like they did after September 11th with all the airlines stocks.

[galleon] 19/9/2009 08:56

..all interesting stuff...but we are still deep in the mire thanx to this governments lack of morality and competence......

[qantas] 06/9/2009 18:56

The goverment needs to pay Mr Branson back now for the free upgrades with a new Bank they got for free.
No such thing as a free lunch unless it is on the mouse.
The adverts reminds me of the film Catch me if you Can.

[qantas] 06/9/2009 18:52

From The Sunday Times September 6, 2009

Upgraded MPs praise Virgin to the skies



A group of MPs who accepted flight upgrades and free trips from Virgin Atlantic have tabled a parliamentary motion which heaps praise on the airline and even quotes its advertising slogan.

The early day motion (EDM) places Virgin at the "forefront of the aviation industry", lavishes approval on its green credentials and puffs its "award winning on-board experience". It goes on to refer to Virgin Atlantic as "red hot" - a reference to a recent TV advertising campaign in which air hostesses in scarlet uniforms and stilettos parade before gawping male passengers.

Of the 30 MPs who have so far backed the motion, five, including its author Paul Keetch, have declared upgrades or free flights from the carrier in the past few years in the Commons' register of members interests.

Other signatories may have accepted the upgrades and, quite legitimately, decided not to declare them. Upgrades on transatlantic flights can be worth thousands of pounds.

Related Links
Virgin Atlantic chief admits knowing of price-fixing
Virgin celebrates 25 years with $2.1bn order
Keetch's motion appears also to have a more serious purpose in opposing plans by rival British Airways to link up with American Airlines. It speaks of "welcoming the competition that currently exists in the aviation sector".

Keetch, the Liberal Democrat MP for Hereford, said he was inspired to draft an EDM celebrating Virgin's silver anniversary because his life had been saved by a Virgin cabin crew when he suffered a heart attack on a flight two years ago.

Gordon Brown is to fly Virgin instead of BA to the G20 summit in the US this month.

[miata] 04/9/2009 07:34

Rival UK banks will not be allowed to take stakes in the state-controlled Northern Rock, Lloyds and Royal Bank of Scotland when the government eventually sells its holdings, chancellor Alistair Darling said last night.

Darling told the CBI in Scotland that when the government does step back from its current positions it would do so in a way "that proactively encourages new entrants".

A number of firms are said to be mulling a big move into the bank sector, with supermarkets reportedly at the top of the list.

Last month, Tesco said it wanted to build a new UK bank 'from scratch'. It has already bought out RBS's 50% stake in Tesco Personal Finance and has been widely suggested as the possible new owner of Northern Rock when it is put up for sale.

Darling's speech may increase the speculation as it was said to be a 'clear' indication that Northern Rock would be sold to a new entrant.

The rescued bank already been primed for disposal with its retail deposits split away from its potentially toxic assets, which will be retained by the government.

The UK taxpayer currently owns all of Northern Rock, 43% of Lloyds and 70% of Royal Bank of Scotland.

[bluenose851] 28/8/2009 11:40

my pleasure. No need to dress it up.

[galleon] 19/8/2009 08:58

Miata - Thanx for detailed info.
Bluenose..Thank you for your astute observation and analysis.lol.

[miata] 18/8/2009 08:27

n its submission to the European Commission, the Building Societies Association (BSA) argued that Northern Rock should be forced to pay a fee as a condition of European state aid approval to prevent any distortion of the mortgage market.

Northern Rock is planning to split into a "good bank", BankCo, which will continue to lend, and a "bad bank", AssetCo, which will house and run down the bad loans. The BSA, which represents Britain's mutual lenders including Nationwide, said the break-up will allow BankCo "to lend freely, without having to absorb losses from non-performing loans, unlike all of its competitors".

In return for this "advantageous position", the BSA has suggested BankCo pay an "annual premium" to the Government to cover "the cost of protection it has gained". It has also demanded the explicit Government guarantees covering 100pc of retail deposits be removed or a fee charged.

Should that not be possible, the BSA says BankCo ought to make "a substantial proportion of its lending in segments where private sector lenders are not currently lending, such as first-time buyers". In addition, current self-imposed restraints preventing Northern Rock from appearing in the best-buy tables should be extended to both lending and savings offers.

Under its restructuring plan, the vast majority of Northern Rock's assets, about £80bn – including pounds £50bn of bad mortgages, will go into AssetCo and be wound down. Its £18.4bn of retail deposits and £10bn of good mortgages, plus £10bn of cash provided initially by the state, will constitute BankCo.

The EC is currently scrutinising the plan to make sure it does not breach European state aid rules, and is due to deliver its verdict in the autumn. Expensive conditions could jeopardise Government hopes to sell BankCo to the private sector before the next election.

Northern Rock has one of the worst lending records of all UK banks. Some 39pc of its £62bn of mortgages are in negative equity, and it made a £724m loss in the first half on the back of £602m of bad debts. Without hiving off the loss-making mortgages, Northern Rock would only be able to lend profitably by charging uncompetitively high rates.

The lender has stressed, however that the restructuring is in taxpayer's best interests as it will allow the bank to operate without further capital injections.

Northern Rock said it "continues to operate within the constraints of its self-imposed competitive framework, which ensures the company cannot take unfair advantage of Government support during the period of state aid".

[qantas] 14/8/2009 13:06

bluenose851 try jumping around and get some blood in your nose.
What a load of rubbish you speak.

[bluenose851] 08/8/2009 10:52

galleon, you are just a naive as the rest of them. NRK lost billions of pounds. that wasnt the BBC's or Pestons fault it was the buiness model you fool

[galleon] 08/8/2009 09:13

...have to say am in total agreement with Montyhedge and Zastas.......Peston and the Beeb did a lot of damage imho and then limited room for manouvre by the powers that be...NRK was effectively sold down the river ( as an example ! ) - non of the subsequent disasters were treated anywhere near as badly - nor their shareholders...but for GBs tripartite system the problem could and probably would have been dealt with quietly and efficiently by the Old Lady without the subsequent panic; and in any event the Rock could have been sold privately to provide some relief to the shareholders - not all of whom are hedge fund billionaires !!..however ..the past is another country and I guess the losers will have to wait a hell of a long time for very little if anything from this crooked non government.

[rebess3] 04/8/2009 08:38

It'll be interesting to see how the public reacts when NRK announces it's bonus plans.

They wouldn't dare I hear you say!! - Watch this space.

[miata] 04/8/2009 07:59

Northern Rock made a £724m loss in the six months to June as its bad debt soared to £602m and warned that its £14.5bn taxpayer loan "will increase" once a planned restructuring is complete.

[bluenose851] 02/8/2009 16:30

that was wrong granted, but it made no difference to northern rock going bust you fool

[bluenose851] 02/8/2009 15:18

what a load of rubbish monty you idiot. The business model was wrong and the market caught up with them. This would have happened with or without Preston

[montyhedge] 02/8/2009 15:09

PESTON CONTRIBUTED TO THE DOWNFALL OF NR.

[dysonhooverman] 02/8/2009 14:15

The government held the doors open for 6 months even though they were telling everyone to stay put. The market would have killed it dead far sooner than Xmas

There was plenty of time to get out.

[bluenose851] 02/8/2009 14:00

no right to compensation for any of oyu. the company was not viable. you should recieve nothing