Fred Goodwin could face legal action over Royal Bank collapse
THE disgraced former Royal Bank of Scotland chief executive Fred Goodwin could face legal action over decisions he made which led to the bank’s collapse.
An inquiry ordered by the Business Secretary Vince Cable was reported yesterday to have concluded that there is “prosecutable evidence” which could be used to disqualify Mr Goodwin and a small number of other former RBS directors from sitting on company boards in the future.
The report is now expected to be sent to Scottish authorities to decide whether there is sufficient evidence to take further action.
A source at the Department for Business, Innovation and Skills (BIS) told The Scotsman that “if proceedings are launched it will be an issue for the procurator fiscal in Scotland, not the Business Secretary, because RBS is a Scottish company”.
It is understood that while Mr Cable wants to see whether Mr Goodwin and others can be prevented from sitting as company directors, the department would rather it was dealt with in the courts. The Crown Office in Scotland was unable to say whether any documents had arrived yet.
If confirmed, the move would be a further blow to Mr Goodwin who lost his knighthood in February as a result of RBS having to be bailed out with £45.5 billion of taxpayers’ money in 2008.
There is still anger that Mr Goodwin received a pension worth £700,000 a year after he was forced out, although he agreed to reduce it by £200,000 a year following the initial outrage.
Despite demands that he should be held accountable for what went wrong, particularly over the purchase of the toxic Dutch bank ABN Amro which led to RBS’s demise, no director from RBS has yet faced criminal prosecution.
Johnny Cameron, the former head of RBS’s investment bank, has been banned from holding directorships with financial companies by the Financial Services Authority.
The Business Secretary asked for external counsel to look into the matter after the Financial Services Authority published a damning report into the way RBS was run up to the collapse.
Mr Cable wanted to find out whether there were any grounds for proceedings which could lead to individuals such as Mr Goodwin being barred from holding directorships.
At the time, Mr Cable said: “Now that I have received the FSA’s report, I am immediately instructing counsel to provide further advice.”
The FSA report found RBS had been brought to its knees by “multiple poor decisions” and its £50bn “gamble” on buying the Dutch bank.
If Mr Goodwin and others are disqualified it will be the most high profile case since the so-called “Phoenix Four” were banned from acting as company directors for a combined total of 19 years in May last year. The quartet, former directors of MG Rover, voluntarily agreed to the bans from BIS following an investigation into the car maker’s collapse.
A spokeswoman for BIS said: “The Business Secretary has not personally received the report yet.”
Mr Goodwin declined to comment.
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