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Demise of the Co-operative Group / Supplemental 1

Updated on May 17, 2018
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Born without a clue. A lifetime later, situation largely unchanged. Nevertheless, one perseveres.....

So, Barry Tootell (former Co-op Bank chief executive) and Keith Alderson (former Co-op Bank head of corporate and business banking) have been thrown to the wolves.

According to the Bank of England’s regulatory arm, the Prudential Regulation Authority, Barry (at the time, costing the Co-op Group £547.45/day) was/is posing an ‘unacceptable threat to the safety and soundness’ of the bank. Worse, he contributed to a culture that “focused on the short-term financial position”! Keith, no less culpable, was/is more or less accused of the same.

Well and good. Some executive responsibility is, at long last, being highlighted. But, really, is it going to be just these two?

This is apparently the first time the PRA has used its powers to take action against individual banksters, and Tootell is, to date, the only bankster boss of any bank to be formally told off since the 2008 crisis. This begs the question as to why other banksters and bankster bosses managed to escape this kind of scrutiny and disapprobation.

In the bankstering sector generally, who the hell wasn't “focused on the short-term financial position” and thereby presenting an ‘unacceptable threat to the safety and soundness’ of the entire, clearly unsound, bankstering system? Why has the PRA gone after the comparative small fry at the poor old friendless, unconnected, un-slick Co-operative Bank? Why aren't they chasing the big fish? Is it because banks that are “too big to fail” also have legal departments and budgets “too big to challenge”?

But more specifically, with regard to the Co-op Bank débâcle itself, there are other names which spring effortlessly to mind.

What about former Britannia top dog Neville Richardson who at the time straddled the ill-fated merger to become CEO of Co-op Financial Services (then, costing the Co-op Group £1,352.74/day)? Here's an executive colossus who spanned the entire Co-op Bank/Britannia fiasco and famously said that he was "affronted by FSA’s accusation that there had been willful misreporting of the liquidity position”. As all else crashed about him he emerged, having handed on the poisoned chalice to the unfortunate Tootell, smiling at the other end with a handshake package worth £4.6 million plus generously remunerating directorships.

And what about good old Rodney Pennington Baker-Bates, Chair of the Britannia Board at the time of the débâcle, a chartered accountant and Fellow of the Institute of Bankers, former chief executive of Prudential Financial Services, previously working in senior roles at Midland and Chase Manhattan Banks? He too straddled the merger to become Deputy Chairman of Co-operative Banking Group Limited from 2010 to July 2012. Now comfortably ensconced as Board Chair at Willis UK Ltd, First Assist Group Limited, and Cabot Financial (Europe) Limited and non Exec Director at Bedlam (sic) Asset Management PLC, was he not, too, at the epicentre of activities at the time and steeped in the kind of knowledge and experience that should have forewarned of impending disaster?

And then there are all the other Britannia Directors at the time of the merger - Bill Gordon (FCIB), Bridget Rosewell (MA, MPhil), Chris Jones (LLB), David McCarthy (BSc, ACA, AMCT), Francis Gugen, (FCA), Keith Cameron (BSc), Peter Harvey (ACIB, Dip FS), Phil Lee (BSc, CA), Stephen Kingsley (FCA), Tim Franklin (ACIB), and Tom Sawyer (Lord). The list of City accounting firms with whom these people had history is impressive. The majority of the Britannia Board worked previously for City giants the likes of Touche Ross, Ernst Young, Arthur Anderson, Price Waterhouse, and for investment banks like Barclays, JP Morgan, and Chase Manhattan. How could all that glittering accumulated knowledge and “professional” expertise have failed so stupendously (and still find happy Directorships at the Co-op and elsewhere)? I find it difficult to believe that this particular assortment of would-be knights, millionaires, and City accountants did not know of the £1.4 billion hole in the Britannia accounts. Surely, must they not have been either spectacularly incompetent or consciously and cynically fraudulent?

And what about all the “independent” “expert” professional Directors - Anne Gunther, David Davies, Euan Sutherland, Merlyn Lowther, Peter Harvey, Rodney Baker-Bates (again), Paul Hewitt, Penny Coates, Mike Cutt, John Longworth, Bob Newton - serving, for generous fees, the various Co-op Group Boards at various times?

And what about all the supporting (and handsomely remunerated) professional firms – KPMG, Deloitte, JP Morgan Cazanove, Price Waterhouse Cooper? Where were they when the chickens came home to roost?

And of course, what about Peter Marks CBE, Co-op Group chief exec throughout the débâcle (at the time, costing the Group £4,638.81/day), allegedly now sunning himself in warmer climes?

These are the kinds of people that we, the grunts (see We The Grunts), the ordinary uncelebrated and despicably amateur members, relied upon (and paid good money for) to interpret the mysteries and minefields of the day and forewarn us of the pit and pratfalls – clearly, to little and no avail.


For more light reading, see The Parallel Economy



© 2016 Deacon Martin

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