The Treasury Select Committee called on Northern Rock to abandon plans to pay £60m in dividends to shareholders only weeks after seeking an emergency credit line from the government. The Daily Telegraph. The Times. The Guardian
MPs accused the beleaguered bank of ‘sending the wrong message’ to taxpayers and customers by pressing ahead with the interim dividend, due to be paid on 26 October to everyone on the shareholder register on 28 September, which is up 30% on last year.
But Northern Rock chairman Matt Ridley said yesterday that the bank’s board ‘stood ready to account for its actions’.
Meanwhile, the government has hired Goldman Sachs to advise it on options for Northern Rock amid fading hopes of a rescue. The investment bank will advise on implications for taxpayers of any rescue plan, while considering alternative scenarios and working through the detail of the guarantee.