Day of reck­on­ing is too late for many

i Newspaper - - NEWS - El­iz­a­beth An­der­son i@in­

Al­most a decade af­ter the Gov­ern­ment bailed out Royal Bank of Scot­land (RBS), in­vestors who watched their shares col­lapse in value are now closer to find­ing out the truth be­hind the fi­asco.

Mon­day marks the start of a 14-week, £700m trial brought against the lender by 9,000 retail in­vestors and 18 in­sti­tu­tions. They are rep­re­sented by the RBS Share­holder Ac­tion Group, which has repeatedly re­buffed out-of-court set­tle­ments. The case cen­tres on whether bosses knew of RBS’s frag­ile state be­fore it raised £12bn from share­hold­ers. Months later, RBS shares fell by 90 per cent; they were worth about 600p 10 years ago, but today they are val­ued at 264p.

Re­gard­less of how the trial goes, for many claimants the day of reck­on­ing has come too late. As re­veals today (page 4), thou­sands of claimants have died in the nine years it has taken the case to come to trial. What is also con­tro­ver­sial is how much RBS has forked out on le­gal fees. The bank, still 72 per cent owned by the tax­payer, has al­ready spent £100m de­fend­ing the case and has set aside pro­vi­sions of £800m in to­tal.

RBS has a team of lawyers, some of whom are re­port­edly on £1,000 per hour. In­cluded in the le­gal ex­penses is £6.5m that was spent de­fend­ing Fred Good­win, the bank’s for­mer chief ex­ec­u­tive, who was at the helm when RBS made a loss of £24.1bn, the big­gest in UK cor­po­rate his­tory.

When Mr Good­win, who was stripped of his knight­hood in 2012, ap­pears at the High Court on 8 June, it will be the first time he has been forced to pub­licly ac­count for his and the bank’s ac­tions in 2008. Thou­sands of in­vestors have been wait­ing for this day for years.

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