LONDON: Shareholders who brought a multimillion-pound High Court action against Royal Bank of Scotland (RBS) have settled their claim against the lender, sources have said.
The RBS Shareholder Action Group, which brought the £700 million lawsuit and represents 9,000 retail investors and 18 institutions, is understood to have informed the judge that they have accepted an 82p-per-share deal.
It means the disgraced former RBS chief executive Fred Goodwin – who was stripped of his knighthood following the bank’s near-collapse – is likely to escape having to answer questions over the events leading up to the Government’s £45.5 billion bailout nine years ago.
The legal action centres on a rights issue overseen by Mr Goodwin in April 2008 when RBS asked existing shareholders to pump £12 billion into the bank after leading a consortium that spent £49 billion on Dutch lender ABN Amro.
Investors claim they were left nursing hefty losses following the cash call after RBS shares plunged 90% and the Government was forced to step in when the deal turned toxic.
However, directors of the action group moved to settle the claim after taking advice from its lawyers.
It is understood the decision was taken because there was risk that if the trial went ahead the action group might not achieve the amount being offered by the bank.
The civil case was due to begin on Monday May 22 and last for 14 weeks, but the judge overseeing the action had granted a series of adjournments to allow settlement discussions to continue between investors and the bank.