Dec 5, 2016
RBS offers £800m to shareholders, but legal battle is not over
Bank reaches settlement with three of five groups over 2008 rescue deal – but remaining investors demand £4bn
Royal Bank of Scotland has agreed a multimillion-pound settlement with a
number of large investors over its ill-fated £12bn rights issue in
However, it still faces a battle with two shareholder groups, one representing more than 27,000 retail investors, who are demanding as much as £4bn in compensation.
At issue is the prospectus RBS issued before the fundraising at the height of the financial crisis, which five groups of investors claim was misleading about the bank's finances. Months after shareholders pumped £12bn into RBS, the government was forced to bail it out to the tune of £45bn and the share price tumbled, inflicting huge losses on those who participated in the supposed rescue.
The bank has now agreed a "full and final settlement" worth 41p per share with three of the groups, including large institutions such as pension funds and insurers, says the Financial Times. If all five agree to the terms, RBS will provide as much as £800m in compensation, bosses have confirmed.
However, the remaining groups, representing "the likes of Societe Generale, Abbey Life, Aberdeen Asset Management and Axa", as well as tens of thousands of ordinary shareholders, say the compensation is not enough and they will fight on, says The Times.