RBS fac­ing threat of UK class ac­tion over £12b rights is­sue

The Pak Banker - - Front Page -

LONDON: Royal Bank of Scot­land (RBS) could face a class ac­tion law­suit in the UK courts as a num­ber of Bri­tish in­vestors are un­der­stood to be mulling a joint chal­lenge.

It is be­lieved a group of mostly in­sti­tu­tional in­vestors are look­ing into launch­ing a case early next year amid con­tin­ued ques­tion marks over RBS's de­ci­sion to tap in­vestors for £12 bil­lion shortly be­fore it went cap in hand to the govern­ment for a tax­payer bail-out.

RBS is the sub­ject of sev­eral class ac­tion cases in the US but, un­til now, UK in­vestors have pur­sued their griev­ances in­di­vid­u­ally or sought to take ac­tion across the At­lantic where it is thought such ac­tions are eas­ier to win.

If the case goes ahead, it would be the first time the bank would face a com­bined law­suit from a num­ber in­vestors in the Bri­tish courts. In Amer­ica, class ac­tion cases have grown in­creas­ingly pop­u­lar over the past few years as they are con­sid­ered a more cost-ef­fi­cient way of bring­ing a case on be­half of a sig­nif­i­cant num­ber of claimants.

RBS did not an­swer calls for com­ment yes­ter­day but ac­cord­ing to one Sun­day news­pa­per, any case is likely to be led by An­drew Onslow QC, a top fi­nan­cial ser­vices bar­ris­ter in London.

Un­til now, an­gry UK in­vestors have pre­ferred to pur­sue the bank through the Amer­i­can courts as it is be­lieved the Fi­nan­cial Ser­vices and Mar­kets Act would make it dif­fi­cult to bring about a class ac­tion in this coun­try. How­ever, in­vestors are now ex­am­in­ing the grounds for bring­ing a case fo­cused on the £12bn rights is­sue in 2008.

Among the cases in Amer­ica, two UK lo­cal author­ity pen­sion funds have ap­pointed Cherie Blair to pur­sue RBS for com­pen­sa­tion af­ter they were left nurs­ing "mas­sive" losses when the bank was na­tion­alised.

The wife of for­mer prime min­is­ter Tony Blair is act­ing on be­half of North York­shire and Mersey­side coun­cil pen­sion funds.

Bank­ing chiefs are con­sid­er­ing giv­ing share­hold­ers a chance to vote on the size of their bonus pools as fi­nan­cial in­sti­tu­tions seek to dif­fuse ten­sion with the coali­tion govern­ment over pay-outs. - PB News

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.