Bank wants to head off legal action
RBS offers £800m to settle rights issue legal claim
Royal Bank of Scotland has this morning announced an £800 million offer to finally settle with shareholder groups over the controversial 2008 rights issue.
The bank has reached a “full and final settlement” with three of the five groups representing 77% of shareholders and hopes the remaining claimants will accept the offer.
It said the offer will avoid further costly and time-consuming legal battles with shareholders who claimed they had been misled over the £12bn fund-raising which the bank instigated just months before it had to be bailed out by the taxpayer.
Shareholders claimed they had been misled over the state of the bank’s balance sheet. The bank, despite making the settlement offer, has not accepted wrongdoing.
In a statement issued this morning, RBS said: “In order to minimise further material litigation expense and management distraction and without any admission of liability, RBS has concluded a full and final settlement with three out of the five shareholder groups representing 77% of the claims by value in the 2008 Shareholder Rights Issue litigation.
“In total, RBS is willing to make available settlement sums of up to £800 million assuming settlement of all claims, to be split among all five shareholder groups, subject to agreement and claim validation.
“RBS will now seek to agree finalised terms with members of the remaining two groups whose claims are presently continuing. Any claims for which settlement is not achieved will, however, continue to be vigorously defended. The trial for such claims is due to commence in March 2017.
Ross McEwan, CEO of RBS said: “We have been very clear that we wanted to deal with as many of our legacy litigation issues as possible during 2015 and 2016.
“We are pleased to have reached this agreement and hope that it will be accepted by the remaining claimant group(s) so that this long course of complex and costly litigation can now be concluded.”
The total settlement amount of up to £800 million is covered by existing provisions.
more to follow…