The Co-op Group’s stake in the bank has been cut from 30 per cent to 20.2 per cent. As a result, the group does not have to pay even more to prop up the bank, but will still keep a vital say over the ethics and behaviour of the lender.
Under its articles of association, the bank must stick to an ethical charter, unless more than 80 per cent of shareholders vote to change the rules – a charter the group insisted on implementing when it lost its 100 per cent ownership of the bank last year.
The initial reduction in its stake to 30 per cent came as the bank had to fill a £1.5bn capital hole.
However, if the bank finds another hole in its finances the Co-op Group will have to decide whether it can afford to stump up the cash to keep its stake at above 20 per cent.
Despite the group’s concerns that it needs to protect the bank’s ethics from the hedge funds which now own most of the lender, those funds have maintained throughout that they are investing because they value the bank’s ethical position in the market.
“Values and ethics remain at the heart of the bank’s business, as evidenced by the fact they are embedded in the bank’s articles of association, and this is supported by our shareholders who recognise the importance of this to the future of the bank and its customers,” said chief executive Niall Booker.
Meanwhile, the Co-op Bank’s disgraced former chairman Reverend Paul Flowers was yesterday accused of continuing to use drugs.
A video published by the Mail on Sunday appears to show Flowers taking drugs in the days before he pleaded guilty to similar offences in court.
Flowers resigned last year after the £1.5bn capital hole was discovered, and later was found to be taking hard drugs.