Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Railtrack rebels raise £1.6m legal fund

Michael Harrison,Business Editor
Tuesday 10 December 2002 01:00 GMT
Comments

Private shareholders in Railtrack disclosed yesterday that they had raised £1.6m towards a fighting fund to sue the Government and said they now planned to seek the support of big City institutions for legal action.

The Railtrack Private Shareholders Action Group announced that 40,000 investors in the failed network operator, ranging from old-age pensioners and clergymen to Army majors and former Railtrack employees, had contributed to the fund.

The target is to raise £2m and achieve the backing of 50,000 small shareholders – about a fifth of the total number – before offering the Government the choice of a negotiated settlement or a prolonged court battle.

Andrew Chalken, the chairman of the RPSAG , said he was confident that the full amount would be raised, having received £1.6m inside just 10 weeks. "The speed with which shareholders have backed our campaign with contributions indicates that there is still an enormous amount of shareholder anger towards the Government over the Railtrack fiasco," he added.

The RPSAG is asking shareholders to contribute 10p towards the fund for every share they own. It anticipates a fresh flood of donations when the first instalment of a 250p to 260p-a-share settlement already agreed with the Government is paid out to shareholders in January.

The group claims to have the support of several unnamed institutional investors speaking for 5 to 10 per cent of Railtrack shares. It now intends to seek donations from these and other companies.

David Greene, senior partner at Edwin Coe, the RPSAG's legal advisers, said £2m would be sufficient to fund any legal action against the Government.

The group has already spent £450,000, mainly on legal fees, including an opinion from Michael Crystal QC that it had a valid claim for compensation. A separate report by Smithers and Co said this could be as high as 950p a share.

Mr Crystal, who has been involved in several high-profile cases including Polly Peck and BCCI, will be asked to represent the RPSAG if the case goes to court.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in