RBS in 11th-hour bid to avert court case brought by thousands of investors


Royal Bank of Scotland has made a last-ditch effort to avert a high-profile court case brought by thousands of investors who claim they were misled into buying the bank’s shares in the runup to its taxpayer bailout, reports The Guardian.

The 11th-hour intervention comes just hours before the case is due to start in the high court in London.

The offer to 9,000 private investors and a handful of City institutions over the £12bn cash call in April 2008 – six months before the bank’s £45bn taxpayer bailout – is thought to be double that offered to other investors, at over 80p a share. However, Reuters was reporting that investors wanted 100p a share.

It was not clear if the settlement offer – in which Ross McEwan, the bank’s chief executive, was personally involved – will be enough to stop the high court action, which has been scheduled to run until mid-October.

The bank, along with disgraced former chief executive Fred Goodwin and three of his former boardroom colleagues, is being accused of misleading investors. Goodwin was in charge at RBS at the time of the rights issue and during the bailout.

Goodwin is listed to appear in court on 8 June – the day of the general election. He has not publicly discussed his role at RBS since he gave evidence to MPs in February 2009.

When he appeared before the Treasury select committee eight years ago he offered a “profound and unqualified apology for all of the distress that has been caused”. However, he said it was too simple to blame him for the bank’s collapse.

Five shareholder groups had originally brought legal action against RBS over the £12bn cash call – at the time a record sum – and the details in the prospectus issued at the time. In December, RBS said it had £800m to share among the different groups making claims and has settled with all but one group, whose claim is for £520m but which could total £800m if interest is included.

None of the settlements has required RBS to take liability. There was no comment on Monday from RBS or from the investors bringing the case.