RBS shareholders in legal action accept ‘significant’ offer

Shareholders who brought a multimillion-pound High Court action against Royal Bank of Scotland have reached an agreement in principle with the bank.

The update in the high-profile litigation comes after a judge overseeing the action – which had been due to begin on May 22 – granted a series of adjournments to allow settlement discussions between investors and the bank.

The legal action centres on a rights issue overseen by former boss Fred Goodwin in April 2008 when RBS asked existing shareholders to pump £12 billion into the bank after leading a consortium that spent £49 billion on Dutch lender ABN Amro.

If the litigation went ahead, disgraced former chief executive Mr Goodwin – who was stripped of his knighthood following the bank’s near-collapse – and a raft of former executives were expected to be questioned as part of a £700 million lawsuit brought against the lender by 9,000 retail investors and 18 institutions in the RBS Shareholder Action Group.

The bank has previously settled compensation claims brought against it by other shareholder groups in connection with the 2008 rights issue.

But the lender – still 73% owned by the Government – stressed payments were made without any admission of liability.

An update sent to all claimants by the RBS Shareholders Action Group at the weekend said: “Having carefully considered the merits of the current offer... we have decided to accept the offer of 82p per share on behalf of our membership.

“This is a decision which is fully supported by our legal advisers.

“We understand that accepting an offer of slightly below the previously advised range of damages, being 92 pence per share and 234 pence per share, may be surprising to some claimants.

“However, there are a number of practical and legal risks which had to be considered.”

The update went on: “This is a significant sum and is effectively double the amount that was paid to the other settling claimant groups.”