- There is already criticism nationally about the Virgin Money deal
Nationwide has come under fire for banning members from attending next month’s annual general meeting in person.
The mutual, founded in 1884, is already facing criticism for not giving its 16 million owners a say in the £2.9 billion takeover of rival lender Virgin Money.
Campaigners plan to express their opposition to the deal – the biggest in banking since the financial crisis – by voting against Nationwide’s entire board, which could be up for re-election at the meeting.
Banned: Nationwide has come under fire for banning members from attending next month’s annual general meeting in person
The dissent comes against a backdrop of concerns about the potential impact on Virgin Money and Nationwide if a Labor government imposes a sweeping new banking tax.
Most large companies have adopted a ‘hybrid’ approach to their AGMs, using technology to enable shareholders to attend meetings virtually, while still having the right to act in person to hold their company to account call.
But Britain’s largest construction company has taken the unusual step of once again holding its meetings exclusively online.
This move surprised some members, who believe they should be able to make their voices heard in person.
John Dawson, a 70-year-old retired baker from Preston, planned to go to Nationwide’s AGM to express his concerns about the Virgin Money deal.
But when his voting package arrived in the mail, he discovered the meeting was online-only.
“So I sent it back and voted against every resolution,” he told The Mail on Sunday.
Virgin Money shareholders have approved the buyout, which will create Britain’s second largest savings and loan group after Lloyds.
The deal is still awaiting the blessing of regulators.
However, the bond could be threatened if a new banking tax is introduced after the general election, which could raise up to £55 billion over the next five years.
The Mail on Sunday recently reported that there are increasing calls from across the political divide for commercial banks to stop receiving interest on more than £700 billion of deposits they are forced to hold with the Bank of England.
Banks and building societies have received huge windfalls on these deposits in recent years, when interest rates rose to 5.25 percent.
Rachel Reeves, who is widely expected to become the next Chancellor of the Exchequer after voters go to the polls for the July 4 general election, has said Labor has “no plans” to cut interest payments to banks, but Significantly, she did not do that. ruled it out.
Analysts at investment bank Barclays believe Virgin Money would be worst hit if interest rate rules were changed, with profits falling by as much as 60 percent.
Nationwide would be the next most exposed, it added.
Campaigners have collected more than 5,000 signatures on a petition demanding Nationwide members be allowed to vote on the Virgin Money deal.
They say the lender’s denial has set “a dangerous precedent,” with the mutual parties “effectively becoming an autocracy rather than the democracy they are supposed to be.”
“Voting against all resolutions… is the only effective method of protest left open to Nationwide members who feel treated with contempt by a mutual society that is supposed to adhere to democratic principles,” campaign manager Mikael Armstrong said.
Swindon-based Nationwide struck a £2.9 billion deal to buy Virgin Money in March.
Deal: Swindon-based Nationwide struck a £2.9 billion deal to buy Virgin Money in March
Nationwide is the latest company to try to prevent owners from attending AGMs in person.
In a letter to members ahead of the AGM, Nationwide said that ‘following last year’s successful launch’ of the digital event, it wanted to give all members ‘the opportunity to participate from the comfort of their own home.
“This includes the ability to vote and ask questions,” it added.
The association told The Mail on Sunday that in-person AGM numbers had fallen rapidly over the past year, with just 32 members turning up in 2022.
Only five complaints about the online-only format have been received in the past two years, it added.
But other companies have been criticized for the way they conduct their AGMs.
Marks & Spencer chairman Archie Norman was forced into an embarrassing climb down last year after the retailer was accused of being ‘arrogant’ and ‘setting an abhorrent precedent by trying to hold its annual meeting online-only.
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