RBS’s legal fight with investors to cost £1bn


Royal Bank of Scotland has spent £1bn on avoiding legal action over its controversial £12bn rights issue in 2008.

According to the Daily Telegraph, the bank paid around £700m to settle with almost nine in ten of the shareholders who participated in the fundraising, who at one time were claiming £4bn in damages.

Of the remaining 9,000 investors, enough of them have agreed to a revised settlement offer worth around £200m that the bank will avoid an embarrassing High Court trial that would have seen its former boss Fred Goodwin grilled.
RBS “has also racked up more than £100m on legal fees in the four years since the lawsuit was filed”, the Telegraph adds.

At a hearing this morning, 87 per cent of the 9,000 investors have accepted the bank’s revised 82p a share offer, which is almost double the previous highest offer of 43.5p per share, The Financial Times says.

“However 13 per cent of investors by value remain undecided and need further time, the High Court heard. The current trial should be delayed until further notice, lawyers for the shareholders told the court.

“Only one individual with 2,000 shares had indicated he was ‘dissatisfied’ with the RBS offer and most of the 13 per cent have indicated ‘they intend to accept the settlement proposal’, the court heard.”

It was previously reported that the group only needed the agreement of 70 per cent of claimants by value to make the deal binding on every member.

The so-called “die-hard” shareholders wanting to take the case to trial say they have raised £7m to fight a prolonged trial, but lawyers for the action group said they had seen “no evidence that funding is available”.