RBS shareholders throw £2.4bn legal claim at Fred Goodwin
Fred Goodwin is a nice, popular fellow isn't he? The general public hate him. The Queen hates him. The media hates him. And now, it seems, so do the shareholders and investors of the Royal Bank of Scotland.
They hate him so much that they've started a £2.4 billion legal claim against him and other former senior executives. Or 'cronies' if you prefer.
They claim that they've been led on a merry dance and been utterly misled over the financial performance of the RBS shortly before they invested their money into a bank that was going to need a £45 billion bailout.
The RBOS Shareholders Action Group, which has the support of 80 institutional investors as well as 7,400 private shareholders, has sent claim letters to 17 former directors who believe they were given inaccurate financial information before investing £12 billion.
Lawyers Bird & Bird will send the letters to Goodwin today, as well as former finance director Guy Whittaker, former chairman Sir Tom McKillop and former head of investment banking Johnny Cameron, among others.
Investors are apoplectic with rage that they weren't told about an alleged loan which the RBS received from the US Federal Reserve. It the loan had been made public, it would have allowed investors to decide to become part of a rights issue with the full knowledge of the situation.
If the RBS had announced the loan, this would have affected the share price which means that investors would've had to pay less for shares. The group of shareholders claim that Goodwin publicly denied that a rights issue would be required to raise funds.
A spokesman for RBS said the group has “substantial and credible legal and factual defences” to the claims and will “defend itself vigorously.”
Is the Royal Bank of Scotland eating itself from the inside, out?