FORMER Royal Bank of Scotland chief executive Fred Goodwin has been ordered to hand over personal e-mails he sent in the run-up to the bank’s 2008 share sale.
Mr Goodwin and other ex-directors will have to reveal private e-mail accounts believed to have been used to discuss the rights issue, as part of a £4 billion court case.
Around 12,500 shareholders and institutions making up the RBS Action Group is suing the bank and former bosses alleging they were misled into buying shares.
It was reported that one member of the group said the e-mails could be a “treasure trove” of what was going on in the bank.
Mr Goodwin, who lost his knighthood after the collapse of RBS, is being sued along with former chairman Sir Tom McKillop, former finance director Guy Whittaker and former chairman of global banking and markets division, John Cameron. The lawsuit alleges they breached the Financial Services and Markets Act by withholding information.
At a High Court hearing last week, Mr Justice Hillyard approved the request from the action group for more information from private e-mails, arguing they were used to discuss business instead of formal work e-mail accounts.
The judge was critical of David Blayney QC, a lawyer for the defendants, for trying to stall the case.
“An example of that, quite a vivid example, was provided by the defendants’ immediate reaction that assessing the shared files would take many months and cost hundreds of thousands of pounds, whereas mature reflection revealed that it would take some 18 days and cost £55,000.”
The e-mails must now be handed to Herbert Smith Freehills, lawyers for RBS.
The rights issue in June 2008 raised £12bn just months before taxpayers had to step in with a £45bn injection to keep the bank afloat, leaving it 80 per cent in the hands of the public.
On Thursday it was announced that RBS had agreed to sell the international arm of the Queen’s bank, Coutts, to Switzerland’s Union Bancaire Privée for a reported fee of up to £584m ($800 million US). RBS will keep hold of the UK operations of Coutts as it works to focus primarily on domestic business.
Last month, RBS’s current boss, Ross McEwan, admitted their £421 million bonus payments were “outrageous” after posting a seventh straight year of losses, totalling £3.5 billion. Losses total nearly £50bn since the public bailout.
Mr McEwan said: “The underlying profits of this business are up. The capital is up, the costs are down. We are focusing on rebuilding the trust of customer.”
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