THOUSANDS of small Royal Bank of Scotland shareholders will find out this week if they are financially able to take part in legal actions against the bank relating to its £12 billion rights issue in 2008.
A key case management hearing was due to be heard today in London before high court judge, Mr Justice Hildyard, to decide on the allocation of costs among the contesting parties dependent on the outcome of the various legal actions.
Shareholder groups allege that the prospectus for the rights issue was materially misleading to investors as to the financial strength of RBS at the time.
The bumper cash call, which followed what turned out to be the disastrous acquisition of Dutch banking giant ABN Amro, came just months before the Scots lender crashed to record annual losses of £24bn and into part-taxpayer ownership.
The RBS Rights Issue Action Group, representing more than 8,000 small shareholders who had less than £5,000 of RBS shares at the time of the rights issue, has warned that any harsh ruling on allocation of costs if the plaintiffs lose their action might scupper their chances of getting redress.
It is understood the RBS Rights Issue Action Group’s preferred outcome at today’s meeting is for private investors’ liability to be capped at the amount of money they had invested in the bank at the time of the rights issue.
Claims already launched against RBS include a £4bn lawsuit by the RBoS Shareholders Action Group, representing about 100 institutional investors in the bank and 12,000 smaller shareholders with larger sums of money at stake.
There is also an institutional claim said to run to possibly hundreds of millions of pounds, headed by UK law firm Stewarts Law.
Separately, Edinburgh-based Standard Life Investments, Legal & General Investment Management, Prudential and the Universities Superannuation Scheme have retained lawyers to consider whether to launch an action against RBS.