Anglo Shareholder Compensation - Precedents in Other Countries?

D

davidod

Guest
Hi

Just wondering what the precendent for compensation has been in other countries?

Am I correct in saying Lenihan has said Anglo is solvent but that liquidity problems caused by reputational damage have necessitated nationalaisation?
If this is correct does solvency not imply the presence of equity (however small) and thus some (if v small) compensation for the shareholders?
 
You should follow the northern rock situation. The shareholders have taken an action against the UK government over its valuation of their shares

For most people the fear is that this bank is going to soak up billions of tax payers money without any return,given that scenario it is hard to see the ordinary shareholders being entitled to anything.

What was your thinking in continuing to hold onto those shares
 
davidod said:
Hi

Just wondering what the precendent for compensation has been in other countries?

Am I correct in saying Lenihan has said Anglo is solvent but that liquidity problems caused by reputational damage have necessitated nationalaisation?
If this is correct does solvency not imply the presence of equity (however small) and thus some (if v small) compensation for the shareholders?
Click to expand...

The argument for zero compensation is that the only reason Anglo is solvent is because the government took it over.
 
A recent decision by the British Government has said that members of Equitable life are entitled to state compensation due to the ineffectiveness of the regulators office when the insurance companies funds went into meltdown a few years ago.
Whats the chance of this happening here? None!. Banks get bailed out when they are completely mismanaged but individuals have to suffer!
 
Could a case of criminal fraud be brought in relation to Anglo? Millions of loans were off/on books, evading auditors leading to misleading financial accounts and ultimately misleading shareholders?

The [broken link removed] in similar circumstances in the US.

Perhaps shareholders should make a formal complaint to the Garda Fraud squad.
You may not get your money back but you might get some justice.
 
it seems the Northern Rock case will be decided within a month.........is it fair to say that the Gvt here will simply take their cue from the decision handed down there.........?
 
Apparently, from what I've read this morning there will be an investigation into Fitzpatricks loans. Whether that will happen or not, who knows.
 
shanegl said:
The argument for zero compensation is that the only reason Anglo is solvent is because the government took it over.
Click to expand...

Apart from N Rock have there been any other cases we can draw inferenece from..............?
Who will this assessor be ?
 
simplyjoe said:
A recent decision by the British Government has said that members of Equitable life are entitled to state compensation due to the ineffectiveness of the regulators office when the insurance companies funds went into meltdown a few years ago.
Whats the chance of this happening here? None!. Banks get bailed out when they are completely mismanaged but individuals have to suffer!
Click to expand...

See above
 
With signs that a class action will be taken with regard to Anglo Irish Bank:
has this ever occured under any similar circumstances in Ireland and if so what was outcome?
 
2 questions - who would you sue, and why do you think shareholders deserve any money back, seeing as it was pretty clear this goose was cooked, and people in general were making speculative bets, which failed badly, just like the bank.
Why should I the tax payer, pony up for the shareholders stupidity?

The amount of people who "filled their boots" on nothing more than a feeling of "gosh, it's cheap - bloody bargain", annoys me.
 
To Cancan

I'm not referring to people who took shares in the last few months in Anglo. I'm referring to long-standing shareholders and particularly those reaching or at retirement.

I'm unconvinced by Brian Lenihens comments that 'responsible' parties for Anglo's mismanagement will be pursued. Irish business culture normally doesn't require resignations let alone prosecution.
 
Doesn't every investing book since time began say that in the years approaching retirement, you should not be heavy in equities?

If people do not understand the instruments they are buying, or simple finance, they should not be buying them.

How do we differentiate between "long-standing shareholders" and investors from "last few months"?

Both were making speculative bets on the future shares price, on a company that dealt exclusively with property, which was an area widely seen to be in difficulty.

You always had the option to sell - that's how one realises gain in the stock market.


What next - everyone suing the gov for being in negative equity?

If anglo directors broke the law, feel free to sue them.
But don't be hoping to be bailed out by the government for loosing a bet.

While I sympathize with those who lost money, a bit of moral hazard for next time might be good for everyone.
 
Cancan, those are fair points you made. The fact remains that shareholders were still wiped out in significant part by fall out from Sean Fitzpatrick's loans and the failure of the system to regulate the banking sector responsibly. Yes shares are always a gamble, but I'd support legal action just to make bankers a little bit more wary about their behaviour in future. Naive perhaps, but it's better than just hoping something is done by someone sometime to address some of the issues disclosed.
 
If it turns out that there is 4billion over and above liabilities in anglo on the day the government took over,I believe this amount should be handed over to shareholders,at 5 euro per share(4b div by 700m shares roughly)
 
dafmurray said:
To Cancan

I'm not referring to people who took shares in the last few months in Anglo. I'm referring to long-standing shareholders and particularly those reaching or at retirement.
Click to expand...

Why would anyone close to retirement have their portfolio concentrated in equities? The State should not bail these people out under any circumstances. They speculated and got burned...that's the stockmarket. Anyone left in Anglo at this stage has to have been well aware that they were potentially facing a total loss.
 
barryl said:
If it turns out that there is 4billion over and above liabilities in anglo on the day the government took over,I believe this amount should be handed over to shareholders,at 5 euro per share(4b div by 700m shares roughly)
Click to expand...

Great idea! That'd give me 1600% return! Bought just before they were nationalised!
 
Anglo is no northern rock...completely different like chalk and cheese.
Northern Rock was nationalised after the british goverment had pumped
25 Billion pounds into her to keep her a float. The Bank was effectively
insolvent.

With regard Anglo, the minister for finance , the financial regulater ,and
the central bank have stated for record that the bank is solvent when
nationalised, and the tax payer has not given anglo a single cent.
The Bank has 4.1 Billion in shareholder equity, 2 Billion in core capital, and
1 billion set aside for future loan impairments. Also on its 70 Billion loan
Book it earns 2 billion core profit.
Dec 2008 reported 1.3 Billion profit and set aside 500million for future losses. All loans are cross collateralised for further security.
People dont realise that anglo only reported loan losses of 270million for
2008....30/40 basis points.
It has factored in 80-120 basis points for next three years 2-3 billion in loan impairments, and expects still to be profitable.
PWC has been all over its loan book on goverment instructions prior to
state nationalistion, and confer the above.
Its commercial /development book is only 17 billion, with half of its 5000
residential portfolio already sold.
Factoring all the facts above The bank is easily worth 10 Billion, but
Due to funding /credit rating issues ,market sentiment, and recent
director loan scandal bank was nationalised and expect the state to pay only 2-3 Billion.
(Remember state was putting in 1.5 billion for 75% stake)
The minister for finance lenihan and anglo chairman have stated they
will seek fair and reasonable compensation.This Process could take 6 to 12
months, but interest on payments will be made.
Income from anglo will help pay off the states hefty debt over the coming
years, hence a good buy.
 
Feel free to take it off us if you want.
I would be easier to get rid of aids, than anglo at this point.

The imparments figure anglo was running off, was a tad optimistic to put it mildly, and the shareholders who believed the company reports a bit partial to works of fiction.

 
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