Belfast Telegraph

Goodwin to be spared court appearance as shareholders settle claim against RBS

Disgraced former Royal Bank of Scotland (RBS) boss Fred Goodwin has escaped a humiliating High Court appearance after shareholders behind a multimillion-pound lawsuit settled their claim against the lender, according to sources.

The RBoS Shareholder Action Group is said to have informed the judge at 11am on Tuesday that it would accept an 82p-per-share deal, costing the state-backed bank around £200 million.

It is understood the group, which spearheaded the £700 million legal claim on behalf of 9,000 retail investors and 18 institutions, had taken the decision because it feared the trial would lead to a worse outcome for shareholders.

A source close to the action group told the Press Association : "That is the end of it. It will not carry on in any way.

"The directors (of the action group) have met, listened to the legal advice, and they have taken the decision to settle."

The legal action centred on a rights issue overseen by ex-chief executive Mr Goodwin in April 2008, when RBS asked existing shareholders to pump £12 billion into the bank after leading a consortium that spent £49 billion on Dutch lender ABN Amro.

Investors claimed they were left nursing hefty losses following the cash call after the bank's shares plunged 90% and the government was forced to step in when the deal turned toxic.

Shareholders were also pursuing the claim in order to see Mr Goodwin answer questions in court over the events leading up to the government's £45.5 billion bailout nine years ago.

The civil case was due to begin on Monday May 22 and last for 14 weeks, but Mr Justice Hildyard had granted a series of adjournments to allow settlement discussions to continue.

The bank had already settled with investors representing 87% of the claims by value in the run-up to the hearing, although it had not admitted liability.

Mr Goodwin - who was stripped of his knighthood following the bank's near collapse - was among a raft of former executives due to appear before the court, including ex- RBS chairman Sir Tom McKillop, former finance chief Guy Whittaker and the ex-head of RBS investment bank Johnny Cameron.

While a settlement would bring its stand-off with shareholders to a close, the bank remains dogged by a raft of problems stemming from the financial crisis.

Chancellor Philip Hammond made the stark admission in April that the Government is prepared to sell its near 73% stake at a loss to the public purse.

The group is also hoping for a reprieve from the European Commission, which is mulling over a plan to spare RBS being forced to sell off 300 Williams and Glyn branches in return for state aid.

There are fears, though, that the alternative £750 million plan - meant to boost banking sector competition - may end up costing RBS more than the branch sale.

RBS is also yet to agree a potentially mammoth settlement with US authorities over mortgage-backed security mis-selling.

However, the bank has enjoyed a brighter start to the year after reporting in April that it had booked its first quarterly profit since 2015 at £259 million.

Shares in RBS closed down more than 3% on the London Stock Exchange on Tuesday.