The government denied in court yesterday that it deliberately set out to make a profit from its nationalisation of Northern Rock at the expense of the bank’s shareholders. There was 'no evidence whatsoever' the statutory compensation scheme under which shares were valued was an 'opaque attempt' to make sure shareholders got nothing, Jonathan Sumption QC, for the Treasury, told the Court of Appeal in London.

Sumption was replying to suggestions by former shareholders that the government knew from the start that the scheme would result in a nil valuation and that this was the main reason it preferred nationalisation rather than private sector bids for the ailing Newcastle-based bank.

Financial Times