L&G ready to sue over Rock
Major Northern Rock shareholder threatens to sue if the level of compensation does not meet expectations
Legal & General could drag the government through the courts by if the
compensation package for Northern Rock shareholders is not generous enough.
The insurance giant is Northern Rock’s largest institutional shareholder with
a 4.8% stake, but it has warned it may wage a legal battle with the government.
Mark Burgess, L&G’s head of equities, told
the
Daily Telegraph : ‘In light of the government’s recent decision to
nationalise Northern Rock, we note the level of central bank funding in Europe
where the central banks continue to act as lender of last resort to the banking
system. We therefore await with keen interest details of how the process of
arbitration will work, and the quantum of compensation for Northern Rock’s
shareholders.’
The government is in the process of appointing an adviser to work out the
value of Northern Rock after the state aid it received has been stripped out.
Whoever wins the role will have to secure the backing of the ICAEW, who have
been brought in by the Treasury to ensure a suitably qualified candidate is
hired.
Further reading:
Institute
to play central role in Rock firm choice