Money Grouse: Would-be buyer put off BT3 shares

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The Independent Online
NIGEL HARRIS, a lecturer in philosophy from Dundee, intended to apply for BT3 shares for his mother but was put off by a condition in the prospectus that he thought unreasonable.

Mr Harris's mother is unwell and has formally appointed him to handle her financial affairs by signing a document giving him power of attorney.

'Under the Powers of Attorney Act 1971, Section 3.1 (1) a copy of an instrument creating a power of attorney may be certified either by the donor of the power or by a solicitor or stockbroker,' says Mr Harris.

'It is quite clear that in law the validity of a certified copy is unaffected by which of these categories of person certifies it.'

Mr Harris was outraged, therefore, to see that the BT3 prospectus contained a clause stating that anyone applying for shares with a power of attorney must produce a document signed by a solicitor.

Since he has done all the work associated with setting up the power of attorney without involving a solicitor, he does not want to start now.

'In the case of my power of attorney over my mother's affairs all the certified copies of the power that I have were certified by my mother as donor,' he says. 'These have been accepted as valid by solicitors for the sale of a house and also as proof when purchasing shares under other flotations, where the terms and conditions have merely required 'a certified copy' to be sent.'

He has complained to the Securities and Futures Authority about the prospectus.

Explanations from SG Warburg and Linklaters & Paines, the merchant bank and solicitor advising the Government on the BT3 issue, were less than illuminating.

The requirement for people with power of attorney to submit certificates signed by solicitors is apparently traditional in government share issues.

The view of the advisers is that the Government is entitled to insist on this in its share prospectuses even though legislation on powers of attorney do not.

No explanation was available on why the Government had originally taken this view, but Mr Harris has been promised a letter from the Treasury.

Write to Money Grouse, The Independent, 40 City Road, London EC1Y 2DB. Include a daytime phone number. Please do not send original documents or SAEs.

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