Former investors in nationalised lender Bradford & Bingley (B&B) should receive no compensation for their shares, the independent valuer of the stricken business has said.
The decision affects 935,000 shareholders in B&B, which saw its mortgage arm nationalised and its savings unit sold off to Spanish banking giant Santander in September 2008 during the financial crisis.
The move will be a bitter disappointment to investors but PricewaterhouseCoopers valuer Peter Clokey says he made his decision after weighing up "representations from a wide range of groups and individuals".
B&B shares closed at 20p each on the final day of trading before the nationalisation and break-up of the group.
The company - which listed on the London Stock Exchange in December 2000 - was previously one of Britain's best known building societies, formed from the 1964 merger between the Bradford Equitable Building Society and the Bingley Building Society.
The B&B Shareholders Action Group - which had previously said any valuation below 55p a share would be "tantamount to theft" - plans to appeal against the PWC decision.
Spokesman Richard Jennings says: "Peter Clokey has today delivered a damning verdict on the rights of UK shareholders. This is a very sad day, not just for B&B shareholders but UK shareholders in general."
Clokey decided B&B - which had seen £173 million flood out of the firm in the two days before nationalisation - would have fallen into administration, leaving nothing for shareholders.
He says the lender was reliant on the Bank of England special liquidity scheme (SLS) - which allowed riskier assets to be swapped for safe Treasury bonds - but the BoE denied access after the threat of a credit downgrade for the bonds it was using as collateral.
The B&B board considered the lender "was likely to have unacceptably low levels of liquidity within a matter of days" without SLS funding, Clokey's assessment said.
With other sources of funding drying up in panicked money markets, he concludes: "In the absence of the transfer order, B&B would ... have been unable to continue as a going concern and would have applied to court for an administration order before the transfer time."
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