Royal Bank of Scotland has been told by a group of private investors that it will be taken to court over a £1.25bn claim related to its 2008 cash call.
The RBoS Shareholder Action Group, which represents 27,000 retail investors, issued its warning after a report that other shareholders were considering settling out of court.
The group, one of at least three bringing claims related to the rights issue in 2008, said: “We look forward to seeing Fred Goodwin and RBS in court in March.”
The group said it was the only one suing Goodwin, who was chief executive of RBS at the time of its £45bn taxpayer bailout, and three of the bank’s former executives.
The legal action is said to be “on behalf of thousands of investors, both private and institutional, who lost money by subscribing for shares during the 2008 RBS rights issue”.
The announcement was made ahead of RBS’s third-quarter results, which will be scrutinised for any further provisions relating to the case. In August, RBS set aside £700m for the case after an attempt at mediation talks in July failed to reach a settlement.
The total claim by all the investors involved comes to £4bn.
The court action by disgruntled investors is one of many factors that could feature in the bank’s results on Friday, when it is expected to pile up more losses on top of £52bn already incurred since the bailout.
An update on the potential spin-out of 300 branches – which were going to be rebranded Williams & Glyn – is expected, while the bank is also likely to face questions about the alleged mistreatment of small-business customers.
RBS has also told investors it faces a hard-to-quantify settlement with the US Department of Justice (DoJ) over the way mortgage bonds were sold in the run-up to the 2008 financial crisis.
Philip Hammond, the chancellor, said earlier this month that he could not sell off any of the 73% taxpayer stake for now. “It’s clear that the disposal of RBS shares at a price that recovers taxpayers’ investment is not practical at the moment,” he said at the time, citing the problems over the spin-out of Williams & Glyn and the ongoing case with the DoJ.
RBS shares trade at about 190p, below the 502p average price paid by taxpayers during the financial crisis.
