Royal Bank of Scotland could be in for a bruising legal battle with angry shareholders according to several reports on Monday.
According to the Times, a group known as the RBoS Shareholders Action Group is gearing up to sue the bank as well as its former Chief Executive Fred Goodwin and former Chairman Tom McKillop.
The shareholders will argue that senior management misled them during a crucial rights issue in 2008 over the fragility of RBS's balance sheet.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Since the time of the rights issue, when RBS shares went for £20, they have fallen by around 90% to 226p.
The newspaper claims the shareholders need to raise £15m to pay for a possible defeat in court; but with the likes of HSBC and Deutsche Bank said to be interested in taking part, achieving that figure seems likely.
The action raises the tantalising prospect of Fred "the shred" Goodwin taking the stand to defend the actions that led to the £45.5bn government led bailout, the biggest bank rescue in world history.
BS
-
Nationwide Building Society launches £175 switching deal – who is eligible?Nationwide Building Society has launched a new current account switching deal. We look at whether you are eligible, and how to get the free cash.
-
Barclays launches £500 cashback offer for ISAs - but there's a catch. Here's how it worksBarclays is looking to attract savers to its cash ISA range but you need a lot of money to get the full reward
