Shareholders object to Barings plan

The lawyer acting for Barings preference shareholders is intending to object in court to the settlement that was hammered out by the City Disputes Panel (CPD) last week.

The CPD aims to settle litigation between three groups of bondholders and give payouts of varying proportions to each group. But it provides nothing for the 1,500 preference shareholders, whose investment in Barings totalled over £50m.

Their lawyer, Dominic Hopkins, of Hewitson Becke + Shaw, said that because his clients had not been litigating, the CPD never invited them to participate in the conciliation process. He said shareholders only learnt of the conciliation through press reports and that it was only after the chair of the preference shareholders' action group met the liquidator, Ernst & Young, last spring, that they were kept informed of the progress of the conciliation.

Last November, the liquidator applied to the Vice-Chancellor, Sir Richard Scott, for leave to implement the settlement but, Hopkins said, the preference shareholders successfully argued that their interests should be taken into account in the settlement.

If all three groups of bondholders vote to accept the plan, the liquidator must come back to the court to sanction it.