Wednesday, June 23, 2010

Schadenfreude and BP investors

George Monbiot says he has no sympathy for investors burned by the BP share price crisis (BP shares have been haemorrhaging value almost as fast as, well, you know what). They were warned about the dangers many times, he says.

"Call me a hard-hearted bastard, but I'm finding it difficult to summon up the sympathy demanded by the institutional investors now threatening to sue BP. They claim that the company inflated its share price by misrepresenting its safety record. I don't know whether this is true, but I do know that the investors did all they could not to find out. They have just been presented with the bill for the years they spent shouting down anyone who questioned the company.

"They might not have been warned by BP, but they were warned repeatedly by environmental groups and ethical investment funds. Every year, at BP's annual general meetings, they were invited to ask the firm to provide more information about the environmental and social risks it was taking. Every year they voted instead for BP to keep them in the dark."
Personally, I wonder whether his argument doesn't go far enough. Those who have seen their shares or pensions losing value ought to actually be thankful that limited liability shareholding means that the most they can lose is the value of their shares. As partial owners of the company, they are not held responsible (beyond a certain point) for its actions, yet it was partially their failure in putting profits ahead of all other considerations that lead to the current mess.


Michael Canaris said...

From near the bottom of herein:

Mr. Goldbury.

If you come to grief, and creditors are craving
(For nothing that is planned by mortal head
Is certain in this Vale of Sorrow--saving
That one's Liability is Limited),
Do you suppose that signifies perdition?
If so, you're but a monetary dunce —
You merely file a Winding-Up Petition,
And start another Company at once!
Though a Rothschild you may be
In your own capacity,
As a Company you've come to utter sorrow —
But the Liquidators say,
"Never mind — you needn't pay,"
So you start another company to-morrow!..."

byron smith said...

Ah, G&S, a word for all seasons!

Sorry I missed this comment earlier. It is most apt.

BP buying silence from scientists.