Introduction

A building society is defined as a financial institution in which all members, whether savers or borrowers, are the mutual owners. They enjoy equal voting rights under the Building Society Acts, and, therefore, should receive equal entitlement to free shares upon demutualisation, i.e.conversion into a bank. BUT 55,000 had these rights "trashed".

After very strongly urging all 8 million customers to vote in favour of demutualisation and offering them the "carrot" of handsome rewards, i.e. free shares in the new company, Halifax B.S. became a bank on 1st June, 1997.

Through total lack of information, partial or downright misleading information in the conversion literature, coupled with wholesale misinformation provided by its branches and agencies, 55,000 customers resident abroad were abruptly disenfranchised, and worse, not even told they would get nothing, not even cash in lieu, until it was too late (at least according to Halifax) to rectify the situation.

See just a few A-Z examples:

Members A - C

Went abroad on temporary British Council, British Embassy, Voluntary Service Overseas, OXFAM and other Relief Agency assignments in countries like Russia, USA, Borneo, Bangladesh and Brazil. Their Halifax branches asked them to ensure they informed their overseas addresses to keep well abreast of the conversion information and to receive the important voting papers.

The Halifax branches did not tell them these mere "correspondence" addresses would mean total exclusion from their free shares. Halifax told them later that these addresses were classified as "non-permitted territories". Worse still, no cash in lieu alternative was offered either, which could easily have been paid into their existing accounts, right there in UK.

Members D - F

British citizens resident in New Zealand and Canada. Halifax branches told them NZ and Canada were "Commonwealth", so there'd be no trouble in sending the free shares. Only "obscure countries" would be excluded. Halifax later said these countries were "non-permitted territories" and gave no shares, no cash in lieu. However, the Alliance & Leicester BS had no problem with securities regulations in sending their conversion shares. Why not Halifax?

To USA, Canadian company NORANDA Inc. had no difficulty with the SEC in sending shares. Noranda just went ahead and did it - no consequences.

Member G

British police investigator sent temporarily to Holland on British Government secondment to investigate Bosnian War Crimes. Halifax informed he would get "x" shares, but later said Holland was a "non-permitted territory" – the only European Union country to be so considered. One would think there were uniformity of securities distribution regulations throughout the EU !

Members H - J

Permanent homes in UK, mortgaged by Halifax, investment accounts, salary and tax paid in UK, went on temporary business assignments to Malaysia, Indonesia, Japan, Czech Republic, Brazil, Gulf States etc.. Halifax Shareholder Services said they were excluded from shares because these countries each had "IMMATERIAL numbers of members" - less than 1,000, and so it was too "onerous" to (bother to) investigate if shares could be issued. Whereas tiny Iceland, obviously, with far less than 1,000 customers, was not excluded.

UNHAV has checked with law firms and securities commissions in these countries and found Halifax had not even bothered to consult them.

Members K - L

Were serving Britain in the RAF at BFPO Ascension Island, permanent homes in England, mortgaged from Halifax. BFPOs have same status as diplomatic institutions i.e. British soil, but no shares issued and no cash equivalent. Even M.o.D. could not persuade Halifax otherwise.

Member M

English Anglican Bishop in Bolivia had always kept UK address for Halifax account. The branch casually told him to change the address to receive conversion info and voting papers. Even told to top up account to maximise share entitlement. Branch failed to inform the change of address would exclude him from shares.

Member N

USA resident, visited aged, terminally ill mother in UK nursing home, acquired power of attorney to handle her Halifax account etc. Branch said no problem to receive the promised shares at USA address. No shares sent. Halifax claimed that US lawyers consulted (never named) said too "onerous" to send shares. No cash in lieu offered.

Members O - Q

Received the Halifax conversion information by unpostmarked slow-boat mail in Malaysia, Borneo, Mali, Nepal up to 6 months too late to vote.

One THIRD of UNHAVs received NO information whatsoever!

The Building Societies Commissioners published their approval of the proposed Halifax B.S. demutualisation in the 90-page HMSO document, "Transfer Decision". Page 40 presents the protest raised at the Special General meeting that Halifax had failed to put COUNTRY names in the addresses on envelopes containing vital info. Halifax blamed database error and defended "democratically" saying these members would have had an "immaterial effect on the outcome of the vote."

Member R

Received all the conversion info at address in China. The "Next Steps to Conversion" document contained flow charts for customer to see if he qualified for shares. He did qualify. A vague tiny footnote also said he would soon receive his balance statement (to indicate just how many shares he’d receive). The doc also vaguely alluded to "MAY" not be able to send shares to certain countries due to "breach of law" or "compliance with regulatory requirements that would be onerous", BUT without giving any list of these countries.

Next he received a signed letter from the CEO giving his account balance and stating: "If your address is up-to-date, there is nothing you need to do to receive the shares."

Then, came the thick Transfer Document - 166 pages of fine-print legalese. The Contents pages "jumped" all reference to pages 59-67. Thus, the one tiny subsection on Page 66 of vital interest to UNHAVs was effectively buried. Without reference in the Contents pages, to have found this subsection would have meant a lawyer/consultant having to read e.g. the 30 preceding pages about the deceased member.