Legal battle to block £2bn sale of green bank
The controversial sale of a state-backed bank set up to support environmental projects faces a last- ditch legal fight. Sustainable Development Capital, a firm which lost out in a bidding war to buy the Green Investment Bank, is asking for a judicial review over the expected decision to sell to scandal-hit Australian bank Macquarie.
The fund, which led a consortium bidding for GIB, says it had raised concerns about the sale since September last year.
It has lodged papers in the high Court following months of controversy around the £2bn sale of the bank, due to fears the new owners might invest in less eco-friendly projects.
The investment fund claimed yesterday that the bid by Macquarie – a bank dubbed ‘the vampire kangaroo’ – was not in line with government criteria.
A spokesman said: ‘In the absence of a constructive dialogue, we have no alternative but to seek redress through the judicial review process.’
Official documents suggest that the buyers of the state-backed bank would have free rein to sell-off valuable assets and flout Government promises.
GIB was set up by the Government in 2012 to invest in ecoprojects around the country. But ministers decided to privatise the bank in June 2015, sparking huge opposition due to fears the owners would not stick to its environmental purpose.
Macquarie, believed to have been the Government’s preferred bidder since around October, has faced criticism due to fears it intends to strip out key assets and sell them on at a profit.
A Freedom of Information request has uncovered how a ‘special share’ that has been created to protect GIB from asset strippers could be toothless. The new owners of the bank would be able to change its agenda and even invest in fossil fuels, it is claimed.
As part of the sale, trustees will take control of the special share that allows them to block the bank’s green mission being changed in its constitution. But the FOI response to Greenpeace from the bank has revealed their main other power would be to take the company to court using a technical process known as a derivative action, a complicated measure that doesn’t always succeed.
Greenpeace warned new owners would be able to do anything they wanted with the Bank – including even investing in fossil fuels. Macquarie declined to comment, but previously has pointed to its record of investing in renewable energy in the UK. The Government has stressed it wants, and expects, GIB to continue to invest in green sectors following a sale.