B&B bonds verdict may spark plea to court

ANGRY Bradford & Bingley shareholders are considering legal action against the Treasury after 2,000 investors were told they will not get any compensation following the bank's controversial nationalisation.

B&B Action Group chairman David Blundell called the decision "an absolute scandal".

Many of the investors are pensioners who bought what are known as permanent interest bearing shares (PIBS) before 2000 when B&B was still a building society.

Hide Ad
Hide Ad

Mr Blundell estimated most of the PIBS bond holders are based in Yorkshire and Lancashire.

"The majority of the PIBS holders are private investors – we have heard some absolute horror stories of ordinary people buying the PIBS bonds as an investment. Some of them are heart-breaking," he said.

Failure of PIBS holders to qualify for compensation is likely to wipe out the savings of a number of retired investors.

They received the news in a letter from Peter Clokey of PricewaterhouseCoopers, who was appointed by the Government as an independent valuer to judge how much compensation, if any, the shareholders should receive.

His decision is expected in late June.

Hide Ad
Hide Ad

In total 2,000 investors spent 52,000 each on the PIBS bonds.

In the letter Mr Clokey said he had concluded that the B&B compensation scheme does not apply to PIBS.

The B&B Action Group is now considering launching a judicial review against the Treasury.

The group's solicitor Charles Fussell has written to Mr Clokey asking why he has come to this conclusion.

Normal bondholders, mostly institutions, will still be entitled to compensation.

Related topics: