A £4-billion shareholder lawsuit against Royal Bank of Scotland (LON:RBS) has continued in High Court this month. The blue-chip lender is being sued by thousands of shareholders over its controversial £12-billion rights issue in 2008.
RBS’ share price shed 0.77 percent to close at 323.50p yesterday, slightly underperforming the benchmark FTSE 100 index. The shares have lost some six percent of their value over the past year.
The Financial Timesreported last night that emails and texts sent by former RBS chief executive Fred Goodwin and other former executives at the bank had been handed over as part of 639,000 documents disclosed by the bank. Shareholders, suing the bank for about £4 billion,claim they were misled into signing up to the £12 billion rights issue launched by RBS in April 2008, just a few months before the bank’s 45.5-billion taxpayer-funded bailout.
Investors involved in the case want the lawsuit to shine a spotlight on events at RBS in the months before its near-collapse. They would also like to see a civil trial where the bailed-out lender and its former executives have to defend their actions on the witness stand.
The lawsuit, however, comes at a sensitive time for RBS, with the UK government looking to sell down its stake in the bailed-out lender. The Treasury started offloading shares in the bank this summer, selling 5.4 percent of its holding. The FT notes that many lawyers believe that RBS might decide that having big institutional investors and retail shareholders suing it over the 2008 rights issue does not sit well with its objective of selling off shares to the same people.
“It’s possible they may pick key shareholders off one by one and do a deal with them or do a deal with retail shareholders,” one lawyer told the newspaper.