MoS investigation prompts call for RBS action group probe
THE Government is being urged to probe a controversial group that represented thousands of small investors in Royal Bank of Scotland.
Bob Neill, chair of Parliament’s Justice Select Committee, has asked Justice Secretary David Gauke to look into the RBS Shareholders Action Group, following an investigation by The Mail on Sunday.
Mr Neill wants to ensure that such action groups are regulated in the future. This could pave the way for criminal investigations if serious wrongdoing is suspected.
RBS Shareholders Action Group was a company set up to win compensation for investors who claim they were hoodwinked into buying shares in the bank at the height of the financial crisis in 2008.
Last year, Manx Capital – an investment vehicle of tycoon Trevor Hemmings, who lost money on his shares – took control of the claim from RBS Shareholders Action Group.
The action group was co-founded in 2009 by Irish businessman Gerard Walsh, described as a ‘fraudster’ by Jersey Royal Court in 2014.
Last June, the investors won a £200million payout from RBS. But they are still awaiting their money.
Investors had been told to expect around £100million. But Signature Litigation – the lawyers acting for Manx Capital – now say they do not know how much will be left after costs. Signature blames the action group, and complications resulting from the way it was run. Its concerns include 90million ‘phantom RBS shares’ that appear not to exist and a 2015 deal by the action group to pay £20million to undisclosed beneficiaries via a company called Evalusafety Ltd.
Directors of the action group deny any responsibility for ‘phantom shares’ or any ‘complications’.
Experts say action groups should be regulated, either by the Ministry of Justice’s Claims Management Regulator, or by the Financial Conduct Authority.
Mr Neill said: ‘The Mail on Sunday’s story raises an important point about the oversight of groups such as this.
‘I have written to the Justice Secretary asking him to examine this case and to consider bringing this and similar groups within a proper regulatory framework. It can’t be right that people who have lost out in cases like this have no regulatory protection. The rules should be tightened up.’
David Golten, of law firm Wedlake Bell, said: ‘The solicitors acting in the case are tightly regulated, as is the bank. It is an anomaly that the action group isn’t.’
Lawyers for the action group said they were unaware of Mr Neill’s concerns.
They added: ‘The action group denies any allegations of impropriety or otherwise in the way it was run.’
Mr Walsh denies any wrongdoing. Sources close to him say that he was neither a witness nor a defendant in the Jersey case and he did not have an opportunity to contest the findings.