Call to end 'sickening greed' of lawyers
Shareholder believes RBS ‘softening’ over 2008 legal action
A shareholder involved in the long-running battle with Royal Bank of Scotland over the legality of its 2008 rights issue said tonight that he was encouraged by an apparent softening in the bank’s position.
Edinburgh-based financier Peter de Vink today appealed to the board’s chairman Sir Howard Davies on behalf of more than 32,000 shareholders for an out of court settlement to bring a halt to what he claimed is a “gross injustice”.
After the annual general meeting, and a private discussion with chief executive Ross McEwan, he told Daily Business the board seemed to be taking a more conciliatory approach and will consider what he had said.
“They have always been in denial. Today they were not in denial,” said Mr de Vink who, during questions and answers at the AGM, said the bank should avoid further delay and expense by reaching an agreement with small shareholders.
They believe the bank’s prospectus for the cash call in 2008 failed to state its true financial position. Only months later, and after buying the Dutch bank ABN Amro, RBS was kept alive only when the Treasury stepped in with a £45 billion rescue fund.
Those who invested in the rights issue are now suing the bank and an action is due to begin in the High Court in London next March.
But Mr de Vink said the board could avoid more suffering by individual shareholders, 4,000 of whom are current or former RBS employees.
He said the only winners from the action were the lawyers who have no interest in settling the case as their fees for RBS alone will be in excess of £90 million. The action group is facing legal fees of more than £15m which the shareholders have raised themselves.
He said that when the case was briefly in court in October the bank was represented by four QCs and 14 other lawyers, each earning an average of £1,000 an hour.
Addressing Sir Howard from the floor, he said: “Will you please use all the power at your command to settle this dreadful draining litigation? While the lawyers make many millions, the small people suffer.
“This is just not right. It is a gross injustice. It is a terrible stain on this bank’s reputation. Institutions can write down their losses – grandparents, trustees and the people who actually trusted the bank can only shiver as their monies are lost forever to the eye-watering, never-ending fees of London lawyers.”
He said the action group members are dying at the rate of eight to ten per week. “They will never see an outcome. You owe them a fair and speedy solution to put right the misdeeds and deceptions of the past.
“At one stroke, if you settle this case you will make this bank the people’s bank and put it back where it belongs at the very peak of Scottish and British economic life.
“This board could be banking heroes. I urge you to take charge, put a leash on the sickening greed of your lawyers.”
Mr McEwan said afterwards that the bank would consider Mr de Vink’s comments.