Bondholders claim elderly lose £3m a day due to Co-op plans

 

Associate Business Editor

Bondholders have launched a fresh assault on the Co-op Bank and its regulators over plans to recapitalise the beleaguered business, warning that pensioners are collectively losing as much as £3m a week through panic selling.

In an open letter to the Bank of England’s Financial Policy Committee, Mark Taber, who is leading the Co-operative Retail Bond Investors Campaign, blasts “numerous attempts to deny responsibility, to pass the buck to other authorities”.

His letter urges members of the FPC to “work together to find a solution” to help an army of 15,000 retail bondholders, many elderly and reliant on income from the bonds’ coupon that will no longer be paid ahead of their conversion into shares. The business will still be majority owned by the Co-operative Group when it joins the stock market.

It is putting in £1bn, while the bondholders will effectively stump up about half that for a third of the equity. The Campaign says it is wrong to characterise the listing as “the only option” for the bank arguing that the Co-operative Group still has assets which it could use to support the bank.

It also maintains that the bank does not need the full £1.5bn demanded by the Bank of England’s Prudential Regulation Authority to meet capital rules, and could anyway look at other options such as making further disposals.

Mr Taber said he feared that the insistence by the Co-op that the current plan was the only viable option meant some pensioners selling bonds into the market at the worst possible time.

He said in the letter: “The retail investors, who are innocent victims of past inaction, are being caught in the middle with no one appearing to take responsibility for their plight.

“Based on recent reported trades we estimate real losses of about £3m a week are being realised by such sellers.”

The PRA hit back, saying it has responded in detail to the concerns Mr Taber raised in his correspondence. “We are not going to enter into ongoing correspondence on matters we have already responded to,” a PRA spokesman said.

PROMOTED VIDEO
Sport
Manchester United's kit for the 2014/15 season
football
News
Nadine Gordimer died peacefully at home yesterday
peopleNobel laureate was a powerful anti-Apartheid voice
Extras
indybest
Arts and Entertainment
Neil Young performs on stage at Hyde Park
musicAnd his Hyde Park set has rhyme and reason, writes Nick Hasted
News
Women have been desperate to possess dimples like Cheryl Cole's
people Cole has secretly married French boyfriend Jean-Bernard Fernandez-Versini after just three months.
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
Extras
indybestThe tastiest creations for children’s parties this summer
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Programme Planner

£30000 - £45000 Per Annum: Clearwater People Solutions Ltd: Our client based i...

HTS GBM - KDB Developer, Kx Q Query Language, £750

£650 - £750 per day: Orgtel: Senior Analyst Developer (KDB/QKx plus Java and F...

Infrastructure Test Lead

£55000 - £60000 per annum + bonus + bens: Deerfoot IT Resources Limited: Our c...

Messaging Support Consultant

£40000 - £45000 per annum + bonus + bens: Deerfoot IT Resources Limited: Messa...

Day In a Page

Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

Super Mario crushes the Messi dream

Germany win the 2014 World Cup in Brazil
Saharan remains may be evidence of the first race war, 13,000 years ago

The first race war, 13,000 years ago?

Saharan remains may be evidence of oldest large-scale armed conflict
Scientists find early warning system for Alzheimer’s

Scientists find early warning system for Alzheimer’s

Researchers hope eye tests can spot ‘biomarkers’ of the disease
Sex, controversy and schoolgirl schtick

Meet Japan's AKB48

Pop, sex and schoolgirl schtick make for controversial success
In pictures: Breathtaking results of this weekend's 'supermoon'

Weekend's 'supermoon' in pictures

The moon appeared bigger and brighter at the weekend
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor