Conflicts will put firms out of the running for B&B valuation


Firms will be hoping conflicts of interest will not rule them out of pitching
for the job of valuing the remains of Bradford & Bingley.

Accountants have been urged to put their names in the ring as the government
tries to put a price on another bank it has taken under its wing, but the
Treasury has warned that some hopefuls will automatically be out of the running.

As its auditors, KPMG are ineligible, as is anyone that has provided advisory
services to stakeholders.

The Treasury said: ‘Given the number of organisations that have been involved
in advising parties in relation to Bradford & Bingley, some potential
candidates may be ruled out because of actual or potential conflicts of

All shares in Bradford & Bingley were transferred to the Treasury at 8am
on 29 September 2008 as the government took drastic action to protect the
banking system and the deposits of UK taxpayers.

The job will mean communicating with almost 930,000 former shareholders in
Bradford & Bingley, ranging from individuals who held a small number of
shares to those who had substantial shareholdings. On the bright side, this job
will be less restrictive than the Northern Rock Valuation.

BDO has secured a flat fee of £4.5m for its valuation of Northern Rock and
there was a possibility valuer Andrew Caldwell’s efforts would be frustrated by
a judicial review to change the terms of reference for the work.

Hedge funds SRM Global and RAB Capital tried unsuccessfully to have the bank
treated as if it were not a going concern and not in administration. These two
key valuation assumptions are not included in the Braford & Bingley
Compensation Scheme Order.

The valuer has also been granted extra powers by the Treasury to get
sensitive information it believes to be relevant to the pricing job out of the
relevant parties.

As with Northern Rock, Michael Izza will head up the selection panel. The
ICAEW chief executive will be assisted by Louise Tulett, director of finance,
procurement and operations at the Treasury, Anthony Fry, senior managing
director at Evercore Partners and Christopher Gardner QC.

The closing date for applications is 7 April 2009. Shortlisted applicants
will be invited to present to a
selection panel in May 2009,’ the Treasury added.

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