Concern: Lib Dem peer Baroness Bowles
Nationwide has been accused of using ‘sneaky’ tactics to avoid putting its £2.9 billion takeover of rival lender Virgin Money to a member vote.
The building society is denying its 16 million members a say on the deal that would create Britain’s second biggest savings and loans group.
Campaigners accuse Nationwide of ‘relying on a technicality’ in the Building Societies Act to block a vote.
A clause in the Act states a ballot is required if interest from residential mortgages is less than half the total income of the lender being bought.
Virgin Money’s home loan income last year was £1.5 billion – less than 40 per cent, suggesting a vote is needed, campaigners claim.
But Nationwide insists the 50 per cent hurdle is cleared if income from financial contracts called swaps is included.
Lib Dem peer Baroness Bowles, who sits on the London Stock Exchange’s board, said: ‘It does seem that Nationwide is being somewhat sneaky by including swap income.’ A Nationwide spokesman said the campaigners’ calculations were ‘wrong, misleading and ill-informed’.
‘Any serious and accurate assessment of the test set out in the Act must take into account all relevant income, including from liquidity and hedging associated with mortgage activity,’ he added.