ROYAL Bank of Scotland shareholders are launching a £2.4 billion legal action against former chief executive Fred Goodwin and his ex-boardroom colleagues.
The former RBS bosses are being accused of misleading thousands of shareholders into investing £12bn shortly before the bank’s near-collapse.
Letters warning of the legal action were being delivered today to Mr Goodwin, former RBS chairman Sir Tom McKillop, former head of investment banking Johnny Cameron, former finance director Guy Whittaker and 15 other former directors.
The claim by RBS Shareholders’ Action Group alleges “misleading statements” and “critical omissions” made by RBS and its former directors in April and May 2008 gave a deliberately false picture of the bank’s financial health.
It also alleges that this misled shareholders into pumping £12bn into a rights issue just five months before the crisis which saw Gordon Brown’s Labour Government step in to rescue the bank with a £20bn bail-out.
Hundreds of middle-ranking former RBS employees are among the 7400 individual investors taking part in the legal action, which also includes 80 institutions.
More shareholders are expected to join the action as it progresses.
Mr Goodwin and his former colleagues have 90 days to contest the allegations.
Mike Neill, from the action group, said they had decided to launch the legal claim because of “extreme disappointment” with the report by the Financial Service Authority into RBS.
The shareholders claim RBS presented the acquisition of Dutch bank ABN Amro – later admitted to be worthless – in “glowing terms” in public statements.
It also alleges RBS failed to disclose it had borrowed billions of dollars in emergency funding from the US Federal Reserve. Meanwhile, former chancellor Alistair Darling, MP for Edinburgh South West, today said First Minister Alex Salmond was “a complete fool” if he thought the takeover of ABN Amro was good for Scotland.
Mr Salmond wrote to Mr Goodwin at the time of the deal giving his backing for it.
But Mr Darling said: “If he honestly thought it was good for Scotland, he’s a complete fool because it brought the entire RBS edifice crashing down.”
A spokesman for RBS said: “The group considers that it has substantial and credible legal and factual defences to the remaining and prospective claims and will defend itself vigorously.”