Sir Fred Goodwin injunction will not stop FSA probe: judge

Mr Justice Tugendhat said the Financial Services Authority (FSA), any other regulator or the Royal Bank of Scotland board was free to delve into the problems RBS experienced while Sir Fred was chief executive.

Lord Stoneham used parliamentary privilege to reveal in parliament last week that Sir Fred had an affair with colleague while at RBS.

The Liberal Democrat peer said: "How can it be right for a super-injunction to hide the alleged relationship between Sir Fred Goodwin and a senior colleague?

"If true, it would be a serious breach of corporate governance and not even the Financial Services Authority would know about it."

After his comments, Mr Tugendhat altered the terms of the order so that, although Sir Fred can be named, the colleague with whom he allegedly had the affair, and the details of their relationship, cannot be revealed.

Yesterday, the judge told lawyers during a court hearing in London: "Anybody who thought that the injunction was directed at preventing any sort of investigation, whether by the FSA, any other regulatory body or the board of the RBS, would be wholly mistaken."

Sir Fred, 52, took legal action in March after discovering the Sun planned to publish a story about the "relationship", the court heard. He alleged that the tabloid was threatening his right to privacy and a judge granted the temporary injunction which prevented publication of his identity.

Lord Stoneham raised the issue in the Lords last Thursday as a "public interest" matter, because RBS had needed a 45 billion taxpayer bailout in 2008. He told peers: "Every taxpayer has a direct public interest in the events leading up to the collapse of the Royal Bank of Scotland."

Hugh Tomlinson, QC, representing Sir Fred, said it was accepted that the order should be varied to allow his client to be named because of what had been said in parliament.

He told the judge there had been no suggestion before the court at any stage that Sir Fred had done "anything improper in his conduct of the business of the Royal Bank of Scotland".

In March, Liberal Democrat MP John Hemming used parliamentary privilege to reveal that Sir Fred had won an injunction, although he gave no details.