RBS’s late bid to avoid court

ROYAL Bank of Scotland has dug deeper in a bid to reach a settlement and avert a high-profile court case with thousands of investors who claim they were misled into buying shares before its £45.5billion taxpayer bailout.

A 24-hour adjournment, agreed by both sides, was granted at a hearing at the High Court in London yesterday as the trial was due to start.

It followed a near-doubling of the settlement proposal by RBS to 82p a share for 9,000 retail investors and about 20 institutions, who had stumped up 200p a share to help raise £12billion to shore up the bank’s strained finances during the financial crisis in 2008.

Jonathan Nash QC, for the shareholders, said: “The parties are currently involved in settlement discussions and are hopeful of making progress. They have agreed that these discussions would be facilitated by allowing a further period of time for them to continue before the trial begins.”

RBS chief executive Ross McEwan, pictured, is believed to have personally helped deliver the offer to lawyers acting for the investors.

The new offer will add tens of millions of pounds to a payout.

The bank has set aside £800million to end all shareholder legal claims and has reached settlements with claimant groups representing 87 per cent of the total claims. Former boss Fred Goodwin, who was in charge at the time of the rights issue and was stripped of his knighthood following the bank’s near-collapse, is due to appear in court on June 8. Eight years ago when appearing before the Treasury Select Committee, he offered a “profound and unqualified apology for all of the distress that has been caused”. While some investors are thought to be prepared to settle if offered 92p a share, others may hold out to see Goodwin and former senior colleagues give a public account of their actions. They argue that the bank and former directors misrepresented its underlying strength, leading investors to take part in a rights issue based on incomplete information. RBS, which is over 70 per cent owned by the taxpayer and has posted nine straight years of losses, denies any wrongdoing over the rights issue and said its former bosses did not act illegally. It declined to comment on the settlement offer.