One of the things I omitted to comment on in my September slackness was Mervyn King’s explanation to the Commons Treasury Select Committee of why he couldn’t organise a secret takeover of Northern Rock bank, or give it covert support.
You’ll remember he blamed the Takeovers Directive for preventing a secret takeover: I think he was right about that because of the mandatory procedure for publishing a bid, laid down in article 6. The Directive is implemented in the UK via the City Takeover Panel’s Code, which it now administers under Part 28 of the Companies Act 2006. Rule 2.2 is I think the relevant rule – it requires an announcement when a purchaser is sought for 30% or more of the voting rights in a company – and I guess at least that much of Northern Rock would have been in question – or where commitments are sought from http://www.nflauthenticjersey.com/ others, such as the Bank of England, in relation to a potential offer – and surely they would have been. Rule 2.2 is at page 65 of the pdf file of the Code. So, just as Uncle Mervyn said.
I also think he was right that the Market Abuse Directive prevented him from supporting Northern Rock covertly. Article 6, which is implemented in the UK by listing authority rules made by the FSA under the Financial Services and Markets Act, would have and required Northern Rock, whose shares of course are listed on the London Stock Exchange, to disclose as “inside information” the fact of any support from the Bank of England. Again, just as Mervyn said.
I was surprised not to see Dame Juliet Wheldon, former Treasury Solicitor, mentrix of Shami Chakrabarti and legal adviser to the Bank sitting behind Mervyn at the committee. There was no sign of her, though.
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