An open letter to Gordon Brown on behalf of Bradley & Bingley shareholders
Dear Prime Minister
On behalf of the 940,195 shareholders in Bradford & Bingley who have lost £123.5 million in the nationalisation, I'd like to ask you the following questions - the answers to which may well result in almost a million votes being cast for or against you at the next General Election.
A million votes could easily decide that election and result in David Cameron settling into the rather hot seat you're sitting on now in Number 10, so I trust you will take the concerns of Bradford & Bingley shareholders seriously and provide straight answers to these straight questions.
1 - 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?
2 - Richard Pym, the CEO of Bradford & Bingley, said the bank was "well capitalised" and "fit for purpose going forward" - two trading days before you stepped in to nationalise it. His comments were taken seriously by myself and other investors who put their money into B&B shares after hearing them, on the grounds that (a) he of all people ought to know, and (b) any public comments he makes are strictly regulated, so have to be true. Nothing happened to B&B's traqding position in the period between his comments being uttered and you nationalising the bank, so either Mr Pym was deliberately misleading shareholders (which I doubt), he was catastrophically wrong (which I also doubt), or you decided to nationalise it anyway even though B&B would have been able to continue trading for some time. So which of those possibilities represents the truth? If Mr Pym did mislead shareholders, will you be ordering an enquiry? And if you did nationalise B&B at a time when it was not strictly necessary, how could it be legally or morally justifiable to do so when it stripped almost a million shareholders of their hard-earned money?
3 - Why did you not suspend dealing in B&B shares immediately after Mr Pym issued his comments (if you believed he was wrong)? Your failure to do so meant that shareholders like me were allowed to climb aboard, like last-minute passengers joining a doomed Titanic, when you knew all along that it was heading for an iceberg. To prevent shareholders from pouring their money into a bank that you knew was about to be nationalised would have been the decent thing to do. And whatever else people say about you, the one thing that distinguished you from most policitians was your inherent decency. But how does your reflection look in the mirror these, days, Mr Brown?
4 - If Mr Pym was right, and B&B could have carried on trading successfully for some time, then how do you justify seizing the assets of almost a million shareholders in a move that Fidel Castro and numerous banana republic dictators would have been proud of as a strike against capitalism? Is this really the sort of behaviour we should expect from an elected politician in a democracy in the 21st Century?
5 - You have muttered something about shareholders receiving compensation "in due course", yet even the least cynical of us do not expect to see any of our money back any time soon. By nationalising the bank without warning, you diminished its value at a stroke, prompting a fire sale, so the real value of shareholders' investments will have catastrophically reduced. And that's your fault, Mr Brown.
6 - Can you confirm that if you instruct valuers to decide what compensation shareholders will receive, if any, you don't allow an army of them at a fee rate of several hundred pounds an hour to spend so long working it out that their fees effectively wipe out anything that might have been left for shareholders?
7 - Why were you so concerned to protect the interests of B&B savers yet showed no concern whatsoever about the interests of its shareholders? Don't shareholders matter?
8 - By nationalising Bradford & Bingley without warning, you have sent out a message to investors that it is no longer safe to buy shares in any company as they can lose all their money and have all their rights extinguished on a politician's whim. Do you realise what would happen to this country's economy if investors throughout the UK sold their shares wholesale in an attempt to put their money into safer forms of investments?
We need answers to all of these questions, Mr Brown. Every one of Bradford & Bingley's 940,195 shareholders will want to hear what you say - and if you ignore them, you will do so at your electoral peril.
We await your response.
Jon McKnight
Plymouth
4 October 2008
