RBS given days to strike a deal
A judge has given Royal Bank of Scotland and investors until June 1 to agree on a deal that would avert a trial over the bank’s £12bn cash call in 2008.
A judge has given Royal Bank of Scotland (RBS) and thousands of investors until June 1 to agree on a deal that would avert a trial over the bank’s £12bn cash call in 2008.
RBS has already offered almost £1bn to settle investor allegations that it misled them. If it reaches a deal, RBS will avoid a trial that would rake over its near collapse and force former CEO Fred Goodwin to testify.
On Wednesday, Judge Robert Hildyard adjourned proceedings for the third time to June 7 after days of intense talks failed to yield an out-of-court settlement. He ordered both sides to notify him of any deal by June 1 or face trial.
“We must have certainty one way or another ... and that must be made clear,” Hildyard told London’s High Court.
The trial had been due to begin on Monday.
RBS, which is still more than 70% state-owned, denies any wrongdoing and says former executives did not act illegally.
Jonathan Nash, a lawyer for the claimants, said progress “remains good” and he was hopeful of a settlement.
Nash blamed logistical problems in reaching “a small number” of shareholders, some of whom are elderly, for the delay and said some of their addresses did not appear to be correct.
Sources told Reuters late on Tuesday that a number of investors remained determined to take the case to trial, partly to see Goodwin held to account for decisions that RBS’s management said were responsible for losses it suffered.
A spokesman for the investor group did not respond to requests for comment. RBS declined to comment.
RBS almost doubled its outof-court offer to investors on Sunday from about 43.1p to 82p per share, sources told Reuters. The offer — which is set to cost RBS about £200m — remains well below the 200p to 230p at which shareholders bought RBS shares in 2008.
Investors representing 87% of the original £4bn damages claim have already settled.
But the remaining group includes thousands of existing and former RBS employees. It alleges former executives hid overstretched finances and failed to disclose that the regulator had ordered RBS to raise cash in 2008.
Months later, the government stepped in with a record £45.8bn bank bailout. Shareholders lost about 80% of their investments — and some their livelihoods as RBS cut jobs as part of a major restructuring.
WE MUST HAVE CERTAINTY ONE WAY OR ANOTHER AND THAT MUST BE MADE CLEAR
SHAREHOLDERS LOST ABOUT 80% OF THEIR INVESTMENTS — AND SOME THEIR LIVELIHOODS