Rock CFO quits as valuation court battle kicks off

Ann Godbehere is to leave her post as the chief financial officer of Northern
Rock after earning nearly £900,000 for a year’s work.

In a statement to the City, the state-owned bank said that Godbehere would
step down from the board on 31 January and leave the company at the end of
February 2009.

Godbehere, previously finance director at reinsurer Swiss Re, was recruited
by Northern Rock last February after the government effectively nationalised the
bank by placing it into a period of temporary public ownership.

News of Godbehere’s pay deal caused controversy last year after shareholders
lost millions of pounds when the bank collapsed.

Northern Rock added that it had kicked off the search for a new CFO but no
decision had been made as to who would replace Godbehere.

A legal dispute between Northern Rock investors and shareholder groups and
the Treasury over the valuation of the nationalised bank began in the High Court
earlier this week.

BDO Stoy Hayward won a £4.5m contract to value the bank last September but
the firm may have to revise its pricing if the powerful investors win the case.

Fund managers SRM Global and RAB Capital, backed by the UK Shareholders
Association, are trying to have the terms amended, claiming the Northern Rock
Compensation Scheme Order, drawn up to deal with the valuation, contravenes
human rights laws.

The assumptions of the order treat the bank as if it was not a going concern
and already in administration before the government stepped in to help with its
£25bn bailout package.

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