Northern Rock's nationalisation earlier this year was avoidable, according to the UK Shareholders Association (UKSA).
UKSA’s Northern Rock Shareholder Action Group says the fact the bank has repayed its government loans so quickly indicates it only needed temporary financial assistance.
The group argues Northern Rock was no different to other banks, which have recently received government support, and this will form a major part of its legal case against the Treasury.
In an update issued today, the UKSA says Northern Rock’s ability to repay its loans ahead of schedule, even during a major downturn in the housing market, suggests nationalisation was not needed.
“[Last week’s banking rescue] and the other measures reinforces the point we have made before concerning Northern Rock that this company was not a special case but was simply one of the first victims of this general crisis in the banking sector,” the UKSA says in a statement.
“If similar measures based on a private sector solution had been applied to helping Northern Rock instead of the nationalisation that took place, the Government would not now be facing so many disgruntled shareholders and a legal action.”
The UKSA will hold an open meeting for Northern Rock shareholders at the World Money Show in London to discuss the legal action.
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