Companies  

‘Shareholders led to believe B&B was a going concern’

The MP for Shipley, West Yorkshire, was due to make the comment in a speech on Wednesday at the start of a long-awaited parliamentary debate on the nationalisation of Bradford & B in 2008. In the same month when the rights issue was completed the interim accounts were passed by auditors KPMG as a going concern, he was due to say.

He said: “Shareholders were entitled to believe it was a going concern when the reality was ‘going, going, gone’ just one month later”.

Speaking before the debate, Mr Davies suggested that the evidence to date pointed to the expropriation of B&B as a “flawed decision, made in haste and not consistent with the treatment of other banks”. He added that an independent inquiry into the nationalisation was long overdue.

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He said: “The B&B shareholders are entitled to the truth now. The prime minister has claimed many times his commitment to open and transparent government and has opened an inquiry into the Co-operative Bank failure.

“It is not too late for the government to open an independent inquiry in respect of the B&B nationalisation as this was, arguably, the best example of what went wrong in the banking crisis, which are still in place. Justice and the British sense of fair play demands such action.”

The debate was held after years of campaigning by the Bradford & Bingley Action Group which represents 1m dispossessed B&B shareholders. During its campaign it has lodged several Freedom of Information Act requests with bodies such as the Cabinet Office, the FCA and its predecessor, the FSA, the Treasury and the BBC.

However according to its chairman David Blundell the requests were declined on the grounds that this was not in the public interest.

Adviser View

Colin Parkin, managing director of Lincolnshire-based Ample Financial Services, said: “Being a shareholder myself, I have a vested interest in seeing this inquiry happen. I was very unhappy at the time about the nationalisation and complained vociferously about both this and the merger between Halifax and Lloyds TSB, but to no avail. There is a double standard which sees advisers punished on mild grounds while big organisations act with impunity.”