Cawkwell nets £1m from Northern Rock

I’ll begin this commemorative Northern Rock Nationalisation Diary, with a tale from my favourite bear trader, Simon Cawkwell.

Cawkwell, a trained accountant, is one of the London’s most colourful and long-standing short sellers. Better known as Evil Knievil, on account of his daring stock market gambles Cawkwell made his name shorting Robert Maxwell’s Maxwell Communication Corporation and Polly Peck International. But his latest play was Northern Rock

He warned in November that the Rock’s shares would be worth 5p and that the bank’s woes represented the “greatest shorting opportunity” he’d ever seen – something that’s making him look like a bit of a clever clogs now.

Cawkwell took his own advice, and booked his usual £1m profit, but I learn that he could have won more.

“Through an oversight on my part, I have had to incur a tax liability of £300,000 on the Northern Rock haul,” he admits.

That seems odd, as spread betting is tax free, but apparently the usual bookies couldn’t take large enough punts, so Cawkwell put part of his bet through agency brokers and incurred the tax.

So there’s another financial triumph getting clobbered by the Revenue. It’s a parable of our time.

Tags: Evil Knievil, Northern Rock, short, shorting, Simon Cawkwell

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