Charcol managers may lose out

Top branch managers at mortgage brokers John Charcol - bought for £100m by Bradford & Bingley in February - are threatening legal action which could jeopardise B&B's share value if the building society demutualises. They say they are victims of unfair management decisions.

Directors of the regional Charcol branches have 20% stakes in each local venture, with the B&B-controlled holding company owning the rest.

But now they say the sell-out to the building society means their efforts could be worthless. For B&B has said it intends to build up the Charcol- online brand and, more importantly, have John Charcol-labelled employees in branches.

"The local directors' equity will become worthless," says solicitor Gareth Fatchett at Birmingham firm Armstrong Neal. "They joined expecting their shares would be valuable, but only if they hit targets which will be impossible when B&B sets up in competition. My clients are concerned, so they are signalling worries for their futures and for the quality of B&B management before a flotation."

Charcol main board director Ian Darby says: "We understand the concerns of the present branch directors because we have not yet articulated the roles they will have in the wider context. We could have bought them out but we did not see the need."

Later this month, Charcol representatives will move into northern region B&B branches in a trial. Charcol is a powerful brand; some in the City suggest the group would be worth more with the Charcol label than with B&B.