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RBS to lodge defence in action over rights issue

RBS will today launch its defence in the High Court against actions by shareholders. Picture: Getty

RBS will today launch its defence in the High Court against actions by shareholders. Picture: Getty

  • by MARTIN FLANAGAN
 

ROYAL Bank of Scotland will today lodge its defence with the High Court in London against various shareholder legal actions alleging the bank misled investors in its 2008 £12 billion rights issue.

The defence document is understood to run to about 150 pages, and follows Mr Justice Hildyard giving the bank a two-week extension to its earlier defence deadline of 29 November.

A key allegation is that the bank’s board, led by former chief executive Fred Goodwin and chairman Sir Tom McKillop, misled investors taking up new shares by suggesting the group was financially stronger than it was.

But a bank spokesman said yesterday: “While RBS and its former directors made some business decisions that have been criticised, this does not mean that they misled investors or acted illegally.

“We believe we have strong defences to the claims that are being brought against the group, and that is why we intend to defend these vigorously and to protect the interests of our shareholders, including UK taxpayers.”

The defence is expected to highlight that, while the Financial Services Authority found management deficiencies contributing to the bank’s downfall, the former regulator found no evidence of anyone acting with a lack of integrity.

No enforcement action has been taken against any RBS director by the FSA or its successor, the Financial Conduct Authority. RBS is represented by law firm Herbert Smith Freehills.

One legal claim launched against RBS and former directors is a £4 billion suit by the RBoS Shareholders Action Group, backed by 100 institutional investors and 12,000 private shareholders.

 

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