Shares in Bradford & Bingley (B&B) today plunged by 21.4 per cent to a new low of 33p as investor fears grew about the lender's future and the competence of its management.

B&B's stock is now trading at a 40 per cent discount to its 55p rights issue price when it hopes to raise £400 million from investors. The postponed extraordinary meeting will now take place on Thursday, July 17.

The further fall in the value of B&B's shares means that the recently expanded list of sub-underwriters to the fundraising are sitting on losses of millions of pounds.

Investors have been spooked by a recent note by analysts at Pali International that said B&B was effectively worthless after cutting the bank's target price to zero.

However, Pali also questioned B&B's management, in particular a decision to allow TPG, the US private equity house, to walk away from a deal to acquire a 24 per cent stake in the bank for £179 million if its debt was downgraded by a credit rating agency.

Last week, Moody's cut its rating on B&B's debt, prompting TPG to pull out of the agreement.

Pali said: "Given pressure on rating agencies to be quicker to downgrade, we think that an agency downgrade was probable, in which case we have to wonder why its executive chairman allowed TPG to insert the clause."

Investors are understood to be furious that Rod Kent, executive chairman of B&B, refused to allow Resolution, the investment vehicle run by Clive Cowdery, access to the bank's books.

Resolution has secured the backing from some of B&B's largest shareholders to fund the £400 million rights issue.

One trader dismissed suggestions this morning that it was short-sellers - investors who make money by betting that a company's stock will fall - who were sending B&B's shares lower.

He said: "It is culmination of things. There are reservations about the rights issue and there is also a lack of confidence about the management and the fact that they refused to let Resolution in."

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