Scottish Daily Mail

Goodwin escapes again

- Alex Brummer

SO AFTER all the public hype about Fred Goodwin and other former Royal Bank of Scotland bankers finally being forced into the courts, it is a case of back to the future.

Rather than guts being spilled in public for the near decade-long horror show which has cost the taxpayer so dearly, the latest action brought by RBS shareholde­rs looks like being settled in smoke-filled rooms.

We should not be surprised. Chief executive Ross McEwan had no interest in headlines about bad banking, which could only delay a return to public markets.

During the production of the 2011 Financial Services Authority report into the RBS failure, former chief executive Goodwin – armed with fancy legal advice – was able to sanitise the document of direct criticism.

One of the great mysteries of the universe is that even though the near-collapse of Britain’s financial system caused the greatest disruption to the City and the nation’s living standards for a century, those involved have never been held responsibl­e through a Chilcot-style public inquiry.

Investors, taxpayers and some customers suffered irreparabl­e financial and personal damage as a result of events at RBS. The current management cannot be blamed for wanting to slam the door on a ghastly episode, even if it means a payout to shareholde­rs who brought the action. But it should not end there.

One cohort of shareholde­rs must not be treated differentl­y from another: an iron rule in takeovers. All investors at the time of the flawed £12bn April 2008 rights issue should be compensate­d.

There is an overriding lesson from RBS, which is highly relevant to the current general election campaign. Public ownership, as advocated by Labour for the railways, water, energy and Royal Mail, does not work in the national interest.

Detailed interferen­ce by the Coalition and the Treasury in the day-to-day running of RBS delayed its repair. A desire to steer it away from casino banking was understand­able. But no one in Whitehall understood that RBS was primarily a commercial bank, and turning it into just another retail bank was wrong. In pursuit of this course, RBS was required to sell good assets, including fintech pioneer Worldpay (a £6bn plus public company), Citizens in the US and Direct Line (market value £4.8bn) at bargain prices.

The Government also lacked the courage to cut RBS free by selling some shares at a loss with the goal of establishi­ng a more liquid and realistic float. What a costly mess.

Air pollution

A TAINT of corruption has long hovered over aerospace.

Lockheed’s misdeeds inspired the Foreign Corrupt Practices Act way back in 1977, and more recently in Britain the Serious Fraud Office successful­ly used a deferred prosecutio­n agreement to settle bribery and cover-up allegation­s against Rolls-Royce.

At the time it was argued few government­s, other than Britain, would persecute one of the nation’s biggest exporters in an industry riddled with payments to middle-men.

The clean-up crew has now arrived at Airbus, which is being probed by fraud authoritie­s in Britain and France. Airbus has anointed Lord Gold, the lawyer who conducted an internal review of Rolls-Royce’s anti-corruption policies, and two former politician­s – Theo Waigel of Germany and Noelle Lenoir of France – to advise the Franco-German company on how best to deal with the probes.

It is in the interests of Airbus that the cloud over the firm – hugely important to the UK’s world-leading aerospace industry – is cleared quickly so that it can keep up the pressure on Boeing in key markets.

Airbus boss Tom Enders must commit to full transparen­cy by publishing all the panel’s findings. At Rolls-Royce, Gold’s report never saw the light of day. There is also a danger that internal reviews get in the way of fraud inquiries. Anything which is a roadblock to transparen­cy should be firmly resisted.

Drive by...

FORD is the only US car maker to survive the financial crisis without a bailout. But it is struggling now.

Chief executive Mark Fields has been fired after income, earnings and the share price tumbled. A board dominated by scion Bill Ford didn’t much like it when the Motown giant’s market value was overtaken by electric and autonomous driving upstart Tesla.

New boss Jim Hackett is being heralded as the ‘transforma­tional’ leader Ford needs. Quite a task when Silicon Valley rich kids are tailgating.

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