RBS trial could be back on as talks falter
ROYAL Bank of Scotland, which earlier this week looked on course to avoid an embarrassing High Court trial over its near-collapse in 2008, has hit a roadblock in its settlement with claimants after a meeting over the final payout ended in stalemate yesterday.
The RBOS Shareholders Action Group, which represents the thousands of retail investors suing the bank for misleading them during a £12bn rights issue, said on Monday it was “in the best interests” to agree to an 82p-ashare offer from the lender, indicating that RBS and former executives, including Fred Goodwin, had escaped a cross-examination in court.
However, since then a large number of investors have raised £4m to put towards funding the 14-week trial. A meeting yesterday between RBS chief executive Ross Mcewan and three directors from the action group ended without an agreement and consisted of “PR blah blah blah,” according to one of the group’s members.
Neil Mitchell, who claims RBS forced his business Torex Retail into administration, said that there were many “hardship cases” involving pensioners who had invested in the rights issue. Mr Mcewan refused to increase the bank’s final offer during the meeting, one source confirmed. The 82p-a-share offer is already double the amount accepted by four other claimant groups in December.
If the stalemate continues then former chief executive Mr Goodwin could find himself having to take the witness stand and defend his role in the lender’s near-collapse at trial next week.
The claimants – who were hit with losses of as much as 80pc when the bank was bailed out during the crisis – have argued that they were misled about the bank’s financial health in the prospectus for its April 2008 rights issue, a claim the lender denies.
The RBOS Shareholder Action Group did not respond to requests for comment.