Rock valuation battle

Apr 24 2008 by zzgn3deploy, Evening Gazette

A LEGAL battle between Northern Rock shareholders and the Government has come a step closer following Treasury lawyers’ rejection of investor pleas for “fair compensation”.

The UK Shareholders Association (UKSA) will now seek a judicial review of the Government’s decision to base pay-outs on the assumption that the crisis-hit firm was unable to continue without public support.

UKSA says this would leave shares in the Newcastle- based group virtually worthless .

It hopes the review - expected in nine months’ time - will force ministers to rethink the valuation of the business, which owes the taxpayer around £24bn. Assets such as Northern Rock’s £110bn mortgage book give it a net asset value of at least £3.20 a share, according to UKSA spokesman Roger Lawson.

UKSA has raised £60,000 so far from its shareholders to take the legal battle to the Government, but said it needed at least £100,000.