british \pensioners and orphans\ to challenge bank of ireland in court
Last Updated : GMT 06:41:18
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British \'pensioners and orphans\' to challenge Bank of Ireland in court

Arab Today, arab today

Arab Today, arab today British \'pensioners and orphans\' to challenge Bank of Ireland in court

London - Arabstoday

British pensioners are taking legal action against the Bank of Ireland at the High Court this week as anger and resentment grows over attempts to plunder their savings. The US-based law firm Brown Rudnick will represent around 2,000 British pensioners and investors, who face losing between 80 per cent and all but the very tiniest of fractions of their investments in bonds issued by the old Bristol & West Building Society. The Bank of Ireland took over Bristol & West in 1997 and it has been one of the major strugglers during the country\'s acute financial crisis. A 2.6bn euro (£2.33bn) liability management exercise (LME) – essentially a financial restructuring – was demanded by the Irish government, which has a 36 per cent stake in the bank. Part of the LME involves owners of the Bristol & West permanent interest bearing shares, or Pibs, worth £75m. These were typically used to supplement pensions, as they offered generous annual payouts of 13.375 per cent of whatever had been invested. However, under the terms of the offer, investors have been offered just 20p in the pound of whatever savings they ploughed into the bonds, barely covering even one year\'s payout. If a Pibs-holder voted \"no\" and the LME is voted through, as is expected, they will receive just one penny for every £1,000 of savings that is tied up in the bonds. Pibs-holders argue that this potentially punishes the \"no\" minority and that the correct legal jurisdiction to decide the legality of the move is England rather than Ireland, which is why they are taking the bank to the High Court. Waseem Shakoor, who has a significant Pibs holding and is one of the leaders of the action, said: \"This makes people who vote \'yes\' oppress the minority and pretty much punish those who say \'no\'. I would urge people to reach out to the lawyers.\" He also warned that such a coercive scheme defies standard practice among Western economies. He argued: \"I\'m more likely to lend money to [The X-Factor act] Jedward than I am to lend to Ireland. People will vote with their feet and Ireland will become a pariah state in the European Union.\" Mr Shakoor is one of only a handful of Pibs-owners who holds enough to benefit from the offer of a debt-for-equity swap, which would value their holdings at 40 per cent of their value. The overwhelming majority do not have significant enough money to even get this amount. To make matters worse, many of the pensioners and any family that have inherited the bonds, have only until 22 June to accept. The 20 per cent offer decreases if the initial deadline is missed. Many of the pensioners are unlikely to have a broker to help them and might not even know where the original certificates are located, so there are fears that the elderly and infirm could miss the deadline. Liz Cameron discovered on Friday that her £3,000 of Pibs, bequeathed to her by her late parents, was under threat. She said that she relied on the £400 annual payment to pay her heating bills, and are even more vital now as she has recently been made redundant. \"My parents left us these to help us through,\" she fumed. \"They would be absolutely devastated to find their legacy has been stolen by the Irish.\" Louise Verrill, a partner at Brown Rudnick\'s London office, said: \"The firm recognises the special circumstances of the widows, orphans and pensioners which relate to this coercive scheme, which is oppressive.\" John Hemming, the Liberal Democrat MP who used parliamentary privilege to reveal that Ryan Giggs was the footballer behind the recent superinjunction, is a leading Pibs-holder and part of the campaign. The group intends to write to the Irish government to condemn its \"lack of common decency and fair play\". However, the Prime Minister, Enda Kenny, was elected earlier this year on a platform to make sure difficult economic decisions were taken in order to end the country\'s financial crisis, which saw Ireland bailed out by the EU and the International Monetary Fund. A spokesman for the Bank of Ireland said: \"In the context of the €2.6bn liability management exercise, the treatment of the Bank of Ireland 13.375 per cent Perpetual Undated Bond is consistent with that of other subordinated debt instruments: \"A) an offer is made to exchange into equity at 40 per cent plus accrued interest, while an offer is made to exchange into cash at 20 per cent excluding accrued interest. \"B) while – for European Prospectus Directive reasons – the equity exchange at 40 per cent is not open to bond investors with holdings converting to less than ¤50,000, should they choose to do so, such investors are free to sell those bonds to larger investors who can participate in the equity exchange. \"C) all bonds under the offer are covered by English law which is standard for most capital bonds.\"

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british \pensioners and orphans\ to challenge bank of ireland in court british \pensioners and orphans\ to challenge bank of ireland in court

 



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