£1bn deal to save Fred the Shred
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Last-gasp payout to shareholders keeps ex boss out of court
ROYAL Bank of Scotland hiked a payout offer to shareholders because they were “demented” about shamed ex-boss Fred Goodwin appearing in court, it is claimed.
Insiders say the taxpayersaved bank were desperate to avoid the disgraced banker taking the stand, fearing what he might say.
They have already paid £800million compensation to shareholders.
They face paying out another £100million to settle with the remaining 9000 shareholders – plus a £100million legal bill.
“When Goodwin’s name came up in negotiations, everyone on the RBS side would become very subdued,” said a source.
“RBS were demented about the idea that Fred Goodwin should be their main defence witness.”
RBS boss Ross McEwan personally intervened hours before a High Court legal fight was due to begin.
A 24-hour adjournment was granted at a brief hearing in London by Mr Justice Hildyard.
The judge was told by the shareholders’ QC Jonathan Nash: “The parties are involved in settlement discussions and are hopeful of making progress.
“These discussions would be facilitated by allowing a further period of time for them to continue before the trial begins.” Goodwin – known as Fred the Shred – was chief executive of RBS when they almost went under at the height of the financial crisis in 2008.
He lost his knighthood after the taxpayer had to bail out the bank with £45.5billion.
If the 14-week trial goes ahead, Goodwin is expected to defend his role in the lender’s near-collapse.
Goodwin would answer questions about the events leading up to the bailout.
He has not spoken about RBS since he told MPs on the Treasury select committee in 2009 that he “could not be more sorry” for what had happened.
The legal action centres on a rights issue overseen by Goodwin in April 2008.
Shareholders who put in £12billion for the bank’s ABN Amro takeover claim they made hefty losses when RBS shares fell 90 per cent and the Government had to step in.