UPDATE 3-UK's B&B wins approval for troubled rights issue

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By Clara Ferreira-Marques

SHEFFIELD, England, July 17 (Reuters) - Britain's Bradford & Bingley (BB.L: Quote, Profile, Research) won investor backing for its critical 400 million pound rights issue rescue on Thursday, but not before executives were quizzed on the troubled fundraising and the bank's future.

Shareholders had been expected to vote in favour of the twice-restructured cash call after underwriters, top investors and six UK lenders stepped in -- even though B&B's battered shares are still trading below the rights issue price of 55p.

Some 93 percent of votes were in favour of the rights issue from the proxy votes appointed. Just 3 percent voted against.

The high-profile troubles at Britain's largest buy-to-let lender failed to stir much excitement among its army of 930,000 retail shareholders, with only 56 investors attending the event in a cavernous 12,000-seat arena in Sheffield, northern England.

The bank's management did not, however, escape criticism, as shareholders accused the board of the demutualised lender of making too many mistakes and of losing investor confidence.

"The whole banking sector has been totally irresponsible ... saying we have all got it wrong doesn't make it right," Peter Hepworth, a retired stockbroker, told the meeting. "Shareholders are losing faith in the way the company is being managed."

Standard Life Investments (SLI), the bank's top shareholder, has backed the rights issue and recognised the need to strengthen the bank's position. However, in a rare public appearance, the fund manager warned that it now needed to see action.