How Fred the Shred couldn’t give a damn
He’s got a £342,000-a-year pension, paid £30,000 to join his golf club, has a new girlfriend and hobnobs with the rich and famous. As taxpayers fork out £1bn to save him from being grilled in court . . .
Hidden away in the gorseclad dunes beside the Firth of Forth, the Archerfield Links is a serenely beautiful golf course.
it is, however, a place that is decidedly offlimits to ordinary players, those with everyday worries about mortgages and household bills.
Members of this exclusive club, on a private estate outside edinburgh, must pay an eyewatering debenture of £30,000 in addition to their annual subscription of £2,700, which makes it the preserve of wealthy business types, and sports stars such as Alan Shearer, ian Botham and Ryan Giggs — and of Britain’s most notorious banker, Fred ‘the Shred’ Goodwin.
He can comfortably afford the fees (and much else besides) on the £342,000-a-year pension he has been pocketing since presiding over the cataclysmic meltdown of the Royal Bank of Scotland, nine years ago.
doubtless his income is augmented by the colossal bonuses he squirrelled away during his eight-year tenure as the bank’s legendarily ruthless and hedonistic chief executive.
now 58 and a man of leisure, Goodwin, who was stripped of his knighthood in 2012, is something of a recluse these days — understandably, given that his home was vandalised and he was even subjected to death threats at the height of the RBS debacle, which might well have precipitated the domino- style collapse of the entire British banking system but for a £46 billion, taxpayer funded bailout.
On Tuesday morning, however, i found him sauntering along the sun-dappled Archerfield fairways, looking lean and fit in his natty blue slacks and matching shirt, like a man without a care in the world. Goodwin had good reason to feel relaxed. indeed, he was doubtless riding an enormous wave of relief, for had the wheels of justice turned differently, he would not have been playing golf this week.
He would have been sweating it out in the High Court, in London, facing accusations that in 2008 he and fellow RBS bosses duped shareholders into investing in a £12 billion ‘rights issue’ — allowing them to buy tranches of shares — by portraying the bank in a falsely favourable light, even though they knew that it was teetering on the brink of the abyss.
He might also have been grilled over his style of management, which saw RBS capture rival banks like some marauding Tartan raider, and dabble with abandon in treacherous markets, as he sought to transform a onceparsimonious Scottish High Street bank into the predominant force in global banking.
All this while Goodwin — knighted by Tony Blair, appointed chairman of the charity the Prince’s Trust, and hailed by the influential global business magazine Forbes as ‘the world’s greatest banker’ — lavished the profits on luxuries such as an £18 million company jet and a permanent suite at The Savoy costing £700,000 a year.
And he paid his sporting heroes, such as Sir Jackie Stewart, Andy Murray and Jack nicklaus, millions to act as RBS ‘ambassadors’.
Beyond his enforced appearance before a Commons committee, shortly after his resignation (when MPs dragged a qualified apology from him, while he insisted it was ‘too simple to blame it all on me’) Goodwin has never been publicly called to account for the grotesque excesses and catastrophic mistakes made during his reign.
So the prospect of seeing him skewered by a sharp-tongued QC was one his detractors had relished — not least the many RBS employees whom he bullied and humiliated.
Though Goodwin and his coaccused strenuously deny hoodwinking shareholders over the rights issue, the bank’s hierarchy was at pains to avoid seeing its ill-starred past dredged up again in court.
The bank has therefore stumped up a staggering £1 billion (including £100 million in legal fees) to settle the case — yet another outrage, we might think, given that RBS is still largely state- owned, meaning that much of this sum is effectively coming from the public purse.
Having been encouraged to buy the rights issue shares at £2, in the summer of 2008, only to see their value plummet to 11p after the bailout, the 9,000 shareholders who are party to the court action have been offered 82p a share in compensation. THiS
doubles RBS’s original offer and the great majority of them have accepted the deal. in the High Court last week, Judge Robert Hildyard called off the hearing. But he left the door open for any still-dissatisfied shareholders to continue the action, if they can prove by next month they can find the funding.
And a small number are still hoping to do that, with some saying they would risk losing the case just for the satisfaction of seeing Fred the Shred squirm in the witness box.
Among them is John Greenwood, a retired civil engineer from Huddersfield, who lost more than £300,000 when RBS collapsed, including half his pension, invested with the bank, plus £45,000 worth of shares he purchased after being impressed by the rosy picture painted in the rights issue prospectus.
‘it’s been a whitewash,’ he told me angrily. ‘What i expected, when it [the case] started was that we would get to know in court what actually went on, and how much Fred and the rest really knew. i’d like to continue the case, but it’s a matter of finding the funds.’
Though Peter Hoare, 73, has reluctantly accepted the settlement, he feels similarly aggrieved. For 35 years he worked in a local branch of natWest, and when RBS took it over in 2000, he acquired thousands of shares. At their peak they were worth about £90,000.
Then, in April 2008, he attended a lunch for natWest pensioners at the Lancaster Gate Hotel, in London, where Fred Goodwin was guest of honour. Goodwin was not there to make small-talk with loyal minions and enjoy the modest meal.
His purpose was to urge the assembled guests to invest all the savings at their disposal in the rights issue.
‘ He was very charismatic and persuasive,’ recalls Mr Hoare, from Ware, Herts.
‘On the basis of hearing him, and against the advice of my financial adviser, i bought a further 5,000 shares out of loyalty to the bank.’ MR
HOARe hoped his portfolio would be enough to help one of his children buy their first home. However, he was never able to make this fatherly gift, for a few months after the lunch, RBS was posting a record British corporate loss of £24 billion, and his shares were virtually worthless.
‘For the little i will get back in the settlement . . . i would rather have seen Goodwin held to account in court, having to answer some difficult questions,’ he says, adding: ‘it rubs salt in the wounds to hear he’s now swanning around on expensive golf courses.’
The sting will worsen when he learns more about Goodwin’s current lifestyle, and his refusal to accept responsibility for his part in Britain’s biggest banking disaster.
First, there is his convoluted personal life, which was interwoven with his professional life to the extent that we might surely ask whether it affected his judgment as the nadir of the RBS crisis was approaching.
Back in 1990, when he was in his early 30s and fast making his name with the old accountancy firm Touche Ross, Goodwin, an electrician’s son who rose from humble beginnings in Paisley, married Joyce McLean, another go-getting financial whizz who had gained an MBA from Strathclyde University.
She forsook her career to become the sort of wife aspiring bankers need, hosting dinners at the elegant Georgian townhouse they acquired, immersing herself in philanthropic work, and caring for their children, John, now 21, and Honour, 18.
Goodwin repaid her loyalty by having an affair with a colleague at RBS — though as a court injunction was later obtained to prevent details of this from being reported, virtually nothing is known about this.
We are still not permitted to identify the woman. What we can say is that she is a lot younger than his wife.
Joyce Goodwin, a highly respected member of the Barnardo’s Scotland national Advisory Board, apparently had no idea her husband was cheating until May 2011, when the matter was revealed by Lord Stoneham of droxford, who — in the interest of taxpayers, as he put it — used parliamentary privilege to raise the matter in the House of Lords.
To escape the threats and bricks being hurled at their windows, the Goodwin family had abandoned the Georgian house, on the corner of a suburban street, and bought a £3 million villa on a private estate on the outskirts of edinburgh.
However, Goodwin was soon ordered out of the marital home, and while his now ex-wife remains in the villa, he is back at their old house, where he indulges his passion for restoring classic cars, including
a Triumph Stag convertible which he drove to the golf club this week.
Intriguingly, workmen who carried out some bespoke interior design work at his house were surprised to find an enormous train set — complete with landscaping, villages and locos of every description — in the loft. One wonders if the man who ran RBS into the buffers takes a little more care with this valuable outfit.
Goodwin’s mistress has since left RBS and works in another city, where we understand he continued to visit her after their relationship was uncovered. However, they are no longer together, and Goodwin is said to have a new girlfriend, whom he is keeping under wraps.
Meanwhile, after a brief period of self-imposed purdah, his reintegration into the higher echelons of Scottish society is well advanced.
He is invited to game- shooting parties on the estate of friends such as double-glazing tycoon Gerard Eadie, consorts with old friends such as Sir Jackie Stewart, and entertains amid the Regency splendour of Edinburgh’s five-star Prestonfield House Hotel. Just to confirm he hasn’t lost his taste for the high life, the man who once had fresh fruit flown in from Paris is back socialising at a grand and highly exclusive organisation called the Oyster Club.
At this quasi-masonic, centuriesold institution, the great and good of Edinburgh swap intriguespiced gossip while dining on gourmet fare, and sipping vintage champagne. ‘ When he went back to the club, in 2016, the first people he bumped into were two of Scotland’s most senor policemen. They greeted him like a long-lost friend,’ says financial writer Ian Fraser, author of Shredded: Inside RBS, The Bank That Broke Britain.
‘It shows you that despite the fact that he has been ostracised by the public, he is totally accepted by the Scottish establishment.
‘But then, Fred would expect nothing else. Perhaps the most shocking aspect of the RBS story is that he remains absolutely unrepentant and defiant. He still believes he wasn’t responsible for what happened and blames others. His lack of remorse and humility has been a common trait throughout this whole affair.’
These views are shared by Peter de Vink, a veteran, Edinburghbased financier who frequents the Oyster Club and was once a friend.
WHEnthe scandal first broke, he says, he took the RBS chief aside and advised him to emulate John Profumo. When, in 1963, the Tory minister’s sexual liaison with call-girl Christine Keeler was exposed, he quit public life and devoted himself to quiet charitable work.
‘I reminded him that Profumo was [eventually] awarded a CBE and told him that if he did something similar, then he could also rehabilitate himself, but he looked as if I’d gone mad and he’s done nothing of the sort,’ says de Vink, who is not among Goodwin’s fawning coterie. ‘He has just continued to wallow in self-pity.
‘Friends of mine, who shoot with him, say he is as arrogant as he was when he was running the bank. He believes that if he hadn’t been removed from his post, the whole thing would have been resolved. He is in complete denial.’
There is, of course, an alternative version of this story. One that holds that Goodwin could not have foreseen the far-reaching effects of the great banking crash of 2008 and was merely a victim of events.
In the interests of fairness, one would have liked to air it. However, none of Goodwin’s friends was prepared to speak for him this week. As for Fred himself, though he was visible through the window when I called at his house, he refused to answer the door.
The deduction must be that Fred the Shred no longer cares what people think of him. However, the unavoidable truth is that his reputation remains, like that of the bank he ran into the ground, utterly shredded.