MP wants probe into £200m RBS action group

AN influential MP wants the Government to investigate a group that was set up to sue Royal Bank of Scotland on behalf of small investors who were misled in the financial crisis.

Norman Lamb – who is co-chair of the All Party Parliamentary Group on Fair Business Banking – will this week write to Justice Secretary David Gauke asking him to examine the RBS Shareholders Action Group, which was cofounded by a fraudster.

His move comes after The Mail on Sunday uncovered major concerns about the management of the action group. The Liberal Democrat MP will specifically ask Gauke to look into why the action group was not regulated by the Ministry of Justice.

The MoJ’s Claims Management Regulator has previously ruled that the action group did not fall within its scope.

Investors who signed up to the action group won £200 million from RBS last June as compensation for shares they were duped into buying in 2008 before their value collapsed. But, as this newspaper pointed out, only £25million has so far been paid out.

The action group was co-founded by an Irish businessman, Gerard Walsh, who has been described as a fraudster in two separate court cases. In a courtroom dispute over the running of the RBS Shareholder Action Group, Walsh has been accused of claiming a £3.75million bonus through a payment arrangement kept secret from investors, and of presenting himself as a volunteer while charging £80 an hour for work for the action group. Walsh and the group deny any wrongdoing.