RBS share price: ‘Diehard’ investors determined to see former boss in court

on May 26, 2017
Updated: Oct 21, 2019

A group of ‘diehard’ Royal Bank of Scotland (LON:RBS) investors are determined to see the lender’s former chief executive Fred Goodwin in court, the Financial Times has reported. The group is leading resistance to a settlement, with the bailed-out bank hoping to reach an out-of-court deal with shareholders suing the group over its disastrous cash call during the financial crisis.

RBS’ share price has fallen deep into the red in today’s session, having lost 1.73 percent to 261.40p as of 10:12 BST, underperforming the benchmark FTSE 100 index which has climbed marginally higher and is currently 0.13 percent better off at 7,527.18 points. The group’s shares have added more than five percent to their value over the past year, and are up by some 16 percent in the year-to-date.

The FT reported yesterday that a faction of investors within the 9,000-strong shareholder action group which still has to settle with RBS, insisted they would rather see Goodwin held to account than accept the current offer of 82p per share from the bailed-out lender. A source with knowledge of the matter told the newspaper that the resistance group included about 4,500 current and former employees who were holding out for a higher price.

RBS is being sued by shareholders who claim that they were misled about the financial health of the lender in the group’s rights issue in 2008, just a few months before the company had to be rescued by the British taxpayer. Earlier this week, a High Court judge adjourned the case until June 7, giving the lender an opportunity to reach an out-of-court settlement with investors.
The FT quoted Rob MacGregor, a national officer for trade union Unite, as saying that there was a small group of investors who “want to have their day in court”, given they “haven’t heard from Goodwin”.
The lender’s former, who was stripped of his knighthood after RBS’ £45.5-billion bailout, was due to take the stand on the day of the General Election, June 8. He has never spoken publicly about the events leading up to the rescue.
As of 10:43 BST, Friday, 26 May, Royal Bank of Scotland Group share price is 261.05p.

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