Rock shareholders rally for more control

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The Independent Online

Thousands of small private shareholders are expected to turn up for Tuesday's crucial extraordinary ordinary meeting at Northern Rock in Newcastle, in an effort to wrestle greater control of the sell off process for the ailing bank.

The 10am meeting is to be staged at the 10,500 seat Metro Radio Arena and will see shareholders vote on resolutions put forward by activist hedge funds, SRM and RAB Capital, which would give investors a much greater say over the future of company.

Success would also seem to rule out the chance of the Northern Rock falling under direct government control.

Roger Lawson, director at the UK Shareholders Association, which represents small private investors, said: "If the RAB-SRM resolutions aren't passed the board shouldn't see it as a green light to do what they want and sell assets off on the cheap or nationalise the bank. They still have to work with us. I have to question the timing of the meeting at 10am too – it's going to stop many elderly shareholders from attending."

On Friday night, Northern Rock board members were still awaiting detailed proposals from Goldman Sachs, which is advising the government over alternative funding options for the bank.

Richard Branson's Virgin Group and investment firm Olivant, led by the former Abbey chief executive Luqman Arnold, remain the only two bidders left in the race for Northern Rock.

It's feared that commercial lending lines afforded to the duo from backers including Royal Bank of Scotland and Citigroup could be pulled due to the continued poor state of credit markets.