Goodwin dodges court date
DISGRACED Scots banker Fred ‘The Shred’ Goodwin is set to avoid a court grilling over his part in the collapse of RBS.
Small investors are furious the former chief executive will dodge questions after the main shareholder group opted to settle a £200million lawsuit yesterday.
The group claim they were misled into investing £12billion in 2008 before the bank had to be saved by a £45.5billion bailout.
A number of small investors are trying to raise £7million to keep the case going.
Their spokesman Malcolm Fraser said: ‘We feel justice hasn’t been done. Mr Goodwin should be made answerable to the taxpayer.’
DISGRACED banker Fred Goodwin seems likely to escape a court grilling over his role in the collapse of RBS – to the fury of small investors.
They will fight on after the main shareholder group chose to settle a £200million lawsuit against the taxpayerbacked bank yesterday.
The group, representing 20 institutional investors and 9,000 smaller shareholders, decided to avoid a drawn-out legal battle by accepting an offer of just 82p for each of the shares bought for £2 nine years ago.
But a number of small investors are desperately trying to raise £7million to keep the case going. Their spokesman Malcolm Fraser said they would appeal to a High Court judge on Thursday to grant them another week to raise the cash.
‘We feel justice hasn’t been done,’ said Mr Fraser. ‘Mr Goodwin should be made answerable to the taxpayer. This is the only opportunity we have to question him in court.’
The Scot – nicknamed ‘Fred the Shred’ for his ruthless efficiency cuts – is the former chief executive of RBS which was being sued for more than £800million by aggrieved shareholders. They claim they were misled into investing £12billion in 2008 before the bank had to be saved by a £45.5billion taxpayer-funded bailout.
The lender had offered about £200million to avoid a humiliating legal showdown for its former executives, and yesterday the RBS Shareholders Action Group said it had decided to accept the offer.
This came after reports that its backer, tycoon Trevor Hemmings, had withdrawn his financial support after striking a deal with the bank to accept the deal.
However, last night a group of diehard retail investors vowed to make one last-ditch attempt to raise cash to pursue the case through the courts. Mr Fraser said while corporate investors were in favour of the bank’s 82p per share offer, 65 per cent of private investors were against it. The case will now go back to the High Court where Mr Justice Hildyard will hear if it will proceed.
Mr Goodwin, who was stripped of his knighthood for his role in the bank’s downfall, has been branded the ‘world’s worst banker’ by critics and a key figure to blame for the 2008 financial crisis.
He would have been joined by former RBS chairman Tom McKillop, ex-investment banking boss Johnny Cameron and former finance chief Guy Whittaker in taking the stand. A High Court trial was due to start last week but was delayed after RBS made an 11th-hour attempt to avoid an embarrassing legal battle by doubling its settlement offer.
Days of intense talks followed and eventually Mr Hemmings, owner of Preston North End Football Club, withdrew his support.
Now, unless another backer comes forward, RBS will pay compensation of just 82p per share – a figure that would not cover close to half of what the investors wanted. Shareholders are likely to lose between 40 per cent and 45 per cent of the proceeds in legal costs.
However, in a letter to investors the RBS Shareholders Action Group said the risk of losing, and the costs of continuing with the case, made it unwise to continue. ‘While the merits of the case against the bank remain strong, the merits against the individual director defendants has always been more mixed,’ it added.
The bank, which is still 72 per cent owned by the taxpayer, is expected to spend £125million defending itself in the lawsuit – more than £90million of which has already been written off.
RBS denies wrongdoing over the 2008 rights issue and says its ex-bosses did not act illegally. It did not comment yesterday.
Comment – Page 16 Alex Brummer – Page 67
We feel that justice hasn’t been done ... Mr Goodwin should be made answerable to the taxpayer Spokesman for small investors