Royal Bank of Scotland seeks to avoid High Court action by shareholders
27 May 2017
The £700 million court case brought by the Royal Bank of Scotland (RBS) Shareholders Action Group has been adjourned for a third time.
This is supposedly to give RBS two more weeks to persuade shareholders to accept an improved offer. The most important effect of the suspension is that it prevents the disgraced Fred Goodwin, the former RBS chief executive, having to appear in court on June 8, the day of the general election.
Preceded by other executives taking the stand, this would have opened a can of worms—not just for RBS and other financial institutions rocked by the 2008 global financial crisis, but also the Labour and then Conservative governments in allowing, encouraging and then concealing the criminal practices of Britain’s banks.
This would take place under conditions where anger among workers and youth over the austerity measures—imposed to pay for the bailout of the banks and further enrich the financial elite—is gathering pace and taking on political dimensions, that even threaten a shock defeat for Theresa May’s Tory government.
Former senior RBS executives have never had to make a public account of the events leading up to the bank’s collapse in 2008, when it was rescued by then Labour Prime Minister Gordon Brown.
Shareholders are suing RBS for £520 million over its £12 billion cash call in April 2008, just months before its collapse, claiming they were misled about the lender’s financial health. RBS, 71 percent of whose shares are owned by the government following its £45 billion bailout—the largest in British history—is desperate to secure a settlement with its shareholders to prevent “Fred the Shred” Goodman and company having to…