Fred Goodwin denies misleading investors

FORMER RBS chief executive Fred Goodwin and other ex-directors of the Edinburgh-based group will tell a court that they did not make “untrue or misleading statements” when asking shareholders for billions of pounds just months before the bank’s near-collapse.

Mr Goodwin and other former executives are facing a £3 billion legal action from thousands of investors who lost money at the height of the RBS crisis of autumn 2008.

The case is being brought by the RBS Shareholders’ Action Group against Mr Goodwin, former chairman Sir Tom McKillop, ex-head of investment banking Johnny Cameron, former finance director Guy Whittaker and 15 other former boardroom colleagues, as well as RBS itself.

In leaked correspondence, Herbert Smith, the law firm acting for Mr Goodwin, Sir Tom and Mr Cameron, has denied its clients made any “untrue or misleading statements” in the RBS prospectus for a £12bn rights issue, and said that it contained “no critical omissions”.

The 36-page document was sent to the law firm Bird & Bird, which is representing thousands of individual investors, including hundreds of former RBS and NatWest workers as well as around 80 institutions.

The letter from Herbert Smith states: “The prospectus did not contain any untrue or misleading statements, and did not contain any critical omissions … overall a very clear picture was given to investors of the purpose of the rights issue and of the role of the rights issue proceeds as part of the more general capital plan.”