RBS Making Last Minute Settlement Attempts with Investors

The Royal Bank of ScotlandRoyal Bank of Scotland (RBS) which is a British banking firm is looking forward to settling with the investors in the last minute attempt for stopping the case related to 2008 rights issue from going to the court.

The bank has increased its offer to almost two times from 43.2 pence to 82 pence per share for all the claimants of the class action suit. This news was revealed by some internal sources at the bank.

Ross McEwan who is the Chief Executive Officer is said for stepping in personally for intervening the suit because the suit could lead to Fred Goodwin who was the former CEO of the bank to be present as a witness.

A lawyer for the investors named as Jonathan Nash said that the new improved offer made both the sides hopeful for a satisfactory result. As a result of which, the trial date was delayed for a few more days by the judge. Initially, the trial was scheduled to start from 22nd of May this year.

Sky News

The legal class action suit was filed first in March 2013, and it includes more than 27000 claimants who asked for 4 billion pounds as settlement money. It is to be noted that the bank has kept aside an amount of 800 million pounds for the settlement. Some investors groups agreed to the settlement offers made in 2016, but others have held out including one of which who has demanded a whopping sum of 520 million pounds. Last month, one group accepted the offer of RBS for 43.2 pence per share while another group accepted it for 41.2 pence per share back in December last year.

According to the investors, Goodwin who led the bank back then had misled them about the overall health of the bank ahead of 12 billion pounds rights issue before the financial crisis in 2008. The investment of the shareholders got wiped out after the government bailed out because of the subsequent collapse of the bank.

Goodwin along with many top officials of the bank have to appear before the court when the trial starts. According to the bank, necessary information was available in the prospectus, and it did not cover up related to the rights issue. It holds that the claimants did not consider market volatility back in 2008.

The trail can be a massive embarrassment for Royal Bank of Scotland because the former executives’ action would come into the spotlight during the financial crises. It is a common tactic to offer a last minute offer because the bank wants to prevent undue negative publicity. To settle with Libyan Investment Authority, Societe Generale SA has agreed to pay a whopping sum of 963 million euros earlier this month.

As per the sources close to the group of investors, they are on the verge of agreeing to the latest offer of Royal Bank of Scotland.

Steven Rudford

Steven Rudford

Hello, my name is Steven Rudford. Welcome to Top10FX.net. Follow my website for the most trustworthy Forex broker reviews and last minute financial trading news.


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