Belfast Telegraph

Thursday 18 December 2014

RBS faces claim over shares issue

RBS faces action by 12,000 private shareholders
RBS faces action by 12,000 private shareholders

More than 12,000 private shareholders have launched a potential £4 billion claim against Royal Bank of Scotland and former bosses over its 2008 share issue.

The RBOS Shareholder Action Group claims the directors misled investors, missed out vital information and misrepresented RBS's underlying strength during the lender's 2008 rights issue.

The group has launched proceedings against former chief executive Fred Goodwin, three other directors and the bank itself.

A spokesman for the action group said: "This represents a giant step forward for the many thousands of ordinary people who lost money as the result of inexcusable actions taken by banks and their directors in the financial crisis.

"Now, for the first time, some of these directors will have to answer for their actions in a British court."

RBOS said its claim was lodged with the taxpayer-payer backed bank and in London's High Court on Wednesday. It includes the claims of more than 100 institutional investors who lost money in its 2008 fundraising, as well as thousands of small shareholders.

RBS launched a £12 billion rights issue in 2008 to shore up its balance sheet after its disastrous acquisition of Dutch bank ABN Amro, but just months later it was part-nationalised in a £45 billion government bailout.

Alongside Mr Goodwin, the group is also starting proceedings against former RBS chairman Tom McKillop, former investment bank boss Johnny Cameron and ex-finance director Guy Whittaker.

The claim is the second in recent days to be lodged against RBS after a group of 21 claimants launched a multimillion-pound lawsuit last week, also over its 2008 cash call.

RBS declined to comment.

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