Salmond offered RBS help in bank takeover

ALEX Salmond offered the assistance of the Scottish Government to Sir Fred Goodwin for the disastrous takeover of ABN Amro that almost destroyed the Royal Bank of Scotland.

The Scottish Government spent 18 months trying to prevent the release of a secret letter from the First Minister in which he fully endorsed Sir Fred's bid for the Dutch bank.

Mr Salmond offered the chief executive "any assistance my office can provide" and said it would be in Scotland's best interest for the RBS takeover to succeed. Two years later he would describe the deal as a "huge mistake" and one of the bank's many "grievous errors".

RBS bought ABN for 49 billion, a grossly inflated price that was put down to Sir Fred's determination not to lose a bidding war with Barclays. In buying the bank RBS exposed itself during the credit crunch to ABN's toxic assets and, as a result, posted the biggest loss in UK corporate history, 24bn, in 2008.

In May 2007 Mr Salmond wrote: "I wanted you to know that I am watching events closely on the ABN front. It is in Scottish interests for RBS to be successful, and I would like to offer any assistance my office can provide. Good luck with the bid."

Sir Fred sent a handwritten reply, but did not take up the government's offer of assistance.

Yesterday Scottish Labour leader Iain Gray said: "This letter is another example of how Alex Salmond was too close to RBS and his bad judgment"

However, a spokesperson for the First Minister said: "Labour's hypocrisy knows no bounds. Fred Goodwin was an adviser to Gordon Brown before and after the ABN takeover - in fact, he was still a member of a key Treasury body three months after quitting RBS. A letter in May 2007 is no big deal - for a takeover given regulatory approval by the then Labour government."