Tuesday, November 20, 2007

If this had been the Tories (2)

The whole Northern Rock debacle gets curiouser and curiouser.

The Remittance Man makes this excellent observation:

What I am sure about is if this were a Tory government and it was The Rich Bastard Bank that was failing, the Grown Ups an other usual suspects would be driving themselves into a frenzy of righteous indignation, calling for police investigations, judicial inquiries and everything else. Yet beyond the odd report, usually tucked away on the business pages, they are surprisingly silent

And now Guido points out that not only was the CEO (why isn't he the "disgraced CEO"?)was sold his own shares before the problems started:

His confidence in his bank's business model long term is demonstrated by his selling of £1.5 m of shares in two days. (25 Jan 2006 sold 52,253 at 957p for £500,061.21 and the next day he sold another 111,426 at 957p for £1,066,346.82).

His faith in the business was shown by his purchase last April of just 262 shares worth a little under £3,000. Not a lot of faith in the business from the boss was there?

And then Guido also points out:

Northern Rock gave half-a-million to Labour's favourite think-tank, the IPPR. It also employed Gordon's personal pollster, Deborah Mattinson, as an adviser. Of all the pollsters to seek advice from, why her? Why give money to that think-tank? Nowadays it is very rare for publicly quoted companies to make politically partisan donations

Now I don't think that the Northern Rock crash is anywhere near the scale of the Enron crash, but that doesn't mean that any sniff of corruption doesn't needed to be investigated, very thoroughly, as Remittance Man points out.

Going back to my post yesterday on the value of NR and its share dealings: Why hasn't its stock exchange listing been suspended? The company looks like its insolvent and is being kept afloat by the Government, doesn't that sort of skew any share pricing?

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