MP among rebels threatening to sue State over ILP

 

THE BRITISH politician who unmasked Ryan Giggs’s super-injunction is among a group of rebel Irish Life and Permanent shareholders who have threatened to sue the State if they are not paid 90 cent for each of their shares.

The Liberal Democrat MP John Hemming is one of eight investors whose UK lawyers have written to the State seeking the payment that amounts to almost 24 times the current share price.

Mr Hemming – better known for revealing Giggs as the footballer who secured an injunction preventing the media from reporting on his extramarital affairs – is part of the group led by the Malta investment fund Scotchstone Capital. The group has led a high-profile campaign to stop the nationalisation of the company.

The company will hold an egm next Wednesday to approve a Government injection of €3.8 billion, which will leave the State with a stake of more than 99 per cent.

The Scotchstone-led group has gathered enough shareholder support to requisition its own egm and table four resolutions for a vote next Wednesday in a bid to stop the State’s recapitalisation.

UK law firm Brown Rudnick, representing the eight shareholders, wrote to the Government yesterday, saying they would be willing to reach a settlement.

“It is no party’s interests for there to be litigation, during which questions of the fundamental legality of the Irish State’s conduct in relation to investments in Irish banks would be considered in open court,” the lawyers said.

Their clients’ complaints would be upheld in any court and their interests “protected from backdoor expropriation”, they claimed.

Given that the embedded value of the company was equal to about €5 a share, a price of 90 cent a share “seems entirely reasonable”, the law firm said, adding that their offer will expire at 4.30pm today.

“The above proposal represents a good opportunity for settlement and we urge you to accept,” they said. The letter was sent to the company’s board, the governor of the Central Bank, the Minister for Finance and the secretary general of the Department of Finance.

Brown Rudnick represent Mr Hemming, Scotchstone, Arc Asset Management, Horizon Asset Management and investors Waseem Shakoor, Paul Curtis, Nigel Bunting and another party who did not want to be named.

“Our clients represent circa 5 per cent in terms of the immediately directly deliverable votes but in all likelihood can deliver much more given the shareholder support enjoyed by Scotchstone Capital Fund,” said the firm.

Mr Hemming said he had invested about £400,000 (€456,000) since last year. The plan to over-capitalise the company was “over the top” given an earlier stress test had shown the company to have sufficient capital.

“We were told ILP was solvent and well-capitalised, and then they changed the rules,” he said.

Just 53 parties out of a total of 135,000 shareholders supported Scotchstone’s call for an egm. They hold about 27 million shares, or 10 per cent of of the company, with two parties, including the Serbian investor Branislav Bogicevic, holding about 14 million shares.