Friday 18 August 2017

RBS trial delayed as it doubles offer to investors in late bid to settle case

Former RBS chief executive Fred Goodwin Photo: PA
Former RBS chief executive Fred Goodwin Photo: PA

Andrew MacAskill and Lawrence White

Royal Bank of Scotland (RBS) pursued last-minute settlement talks with a group of investors yesterday in a bid to avoid a potentially embarrassing trial over allegations it misled them about a 2008 capital increase.

A successful settlement would save former RBS CEO Fred Goodwin from facing scrutiny in the British courts over his decision-making and leadership at the time the lender almost collapsed.

RBS has doubled its offer to the remaining claimants as it seeks to settle the case, two people close to the matter told Reuters.

The civil trial brought by thousands of RBS investors was due to open at the High Court in London but was adjourned for a day to allow the settlement talks to continue.

The plaintiffs allege former executives gave a misleading picture of the bank's financial health ahead of a £12bn cash call in 2008. Months later, RBS had to be rescued by the UK government with a £45.8bn bailout.

RBS, which remains more than 70pc owned by the British state, denies any wrongdoing over the 2008 rights issue and says its former bosses did not act illegally. Jonathan Nash, a lawyer representing the claimants, appealed in court for an adjournment saying the two parties were in settlement talks and wanted longer to strike a deal.

"We are involved in settlement discussions and we are hopeful of making progress," Nash said.

The sources said current RBS CEO Ross McEwan was directly involved in talks over the weekend and that the bank had offered more than 80 pence for each RBS share held, though it was not clear if any investors have accepted the offer.

A settlement at that price would cost RBS "in the tens of millions of pounds", a third source familiar with the matter said.

The bank has settled with 87pc of the investors who originally brought the case but the others have so far rejected its offers and say they were determined to go to court.

By doubling the amount on offer, RBS is close to a sum the remaining investors would accept, one of the sources said, indicating that they might settle if RBS raises its offer to 100 pence per share - half what was originally paid. (Reuters)

Irish Independent

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