Q: Could you give me any information on the Bradford & Bingley compensation scheme? As far as I can ascertain no compensation will be paid out by the government, even though other banks seem to have been reimbursed by the government. The independent valuer Peter Clokey has determined that no compensation will be paid, but I believe that he has been asked to reconsider his decision.I hold 585 ordinary shares and I would be most grateful for your thoughts on this matter.A: Patrick Connolly is a certified financial planner for AWD Chase de Vere.You are correct. Peter Clokey, the PriceWaterhouseCooper's valuer appointed by the government, stated on 5 July 2010 that there will be no compensation for shareholders in Bradford & Bingley after their shares were transferred to the government.
He took the view that without government intervention, Bradford & Bingley would have gone into administration, leaving nothing for shareholders. The UK Shareholders' Association (UKSA), which represents the interests of private shareholders, has established the Bradford & Bingley Action Group and submitted a formal appeal to Clokey, requesting he revise his opinion. Clokey accepted submissions from the Action Group, former shareholders and other affected parties between 5 July and 27 August 2010, and after a period of review, published a revised assessment notice on 14 March 2011 on his website, bandbvaluer.org.uk. The revised notice upholds his original decision and there can be no further appeals to him, though it's not known if UKSA will take any other action. Go to its website, uksa.org.uk, for more details.
Other optionsShareholders had the option to refer the matter on to the Upper Tribunal (tax and chancery chamber). They had 28 days to fill out and sign form FTC3 and send it to both the Upper Tribunal and Peter Clokey. Aside from appealing, however, you are limited in what you can do, and given that Clokey will take no further part, it seems unlikely that anything more will happen. Why do Bradford & Bingley shareholders want compensation?Back in 2008, Bradford & Bingley was nationalised as part of a government bailout for the struggling lender. Approximately 935,000 shareholders sought compensation for the substantial drop in value of their shares, arguing that the nationalisation of B&B was an unnecessary measure that unfairly damaged the value of the shares.
This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.
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