Former shareholders in Northern Rock failed today in their High Court bid to overturn a Government compensation scheme which they say will result in their shares being valued at nothing.
The shareholders claimed the Government deliberately set out to make a profit from its nationalisation of the bank at their expense.
They alleged that a shareholder compensation scheme introduced by statute when Northern Rock was taken over last February was based on false criteria which would lead to shares being valued at, if anything, little more than zero so the Government would inevitably make a profit when the bank was eventually sold off.
Shareholders sought a declaration that the compensation provisions were incompatible with the human rights principle that the taking of property by the state must be balanced by compensation reasonably related to the value of that property.
But Lord Justice Stanley Burnton, sitting in London with Mr Justice Silber, said today: "We have come to the conclusion that the provisions made for the compensation of the shareholders of Northern Rock do not infringe their rights."
The case was brought by two major investors, SRM Global and RAB Capital, and around 150,000 private shareholders who held as much as 25% of the company's shares.
The private shareholders, including former and existing Northern Rock employees, were backed by the UK Shareholders Association.Reuse content