Ex-RBS boss Fred Goodwin under scrutiny in court hearing

Former Royal Bank of Scotland boss Fred Goodwin is set to come under scrutiny in court for the first time since the bank’s near-collapse in 2008.

Some 9,000 people who lost money on shares are demanding £520m in compensation from the bank and four former directors, including Mr Goodwin.

They say they were misled over the bank’s financial health in the run up to its £45bn government bailout.

The bank and former directors deny any wrongdoing.

Mr Goodwin, who was stripped of his knighthood in 2012, oversaw the multi-billion-pound deal to buy Dutch rival ABN Amro at the height of the financial crisis in 2007, which led to the RBS bailout.

The case at London’s High Court is expected to last 14 weeks and centres on the rights issue aimed at funding the deal which asked existing shareholders to pump £12bn into the bank in exchange for discounted extra shares.

Goodwin ‘sorry’

The bank has already settled the majority of claims over the issue, but has not admitted liability.

The case is being heard by a High Court judge without a jury and will involve the remaining 9,000 individuals and 18 institutions. If they are successful, the final payment could be up to £700m if interest is added.

Mr Goodwin is due to be cross-examined on 8 June, the day of the general election. It will be the first time he has spoken about his role at RBS since 2009 when he told MPs on the Treasury select committee that he “could not be more sorry” for what had happened.

RBS has been loss-making ever since its £45.5bn bailout at the height of the crisis and remains 72% taxpayer-owned.

In February, the bank reported a £7bn annual loss for 2016.

The bank is also yet to settle with the US Department of Justice over claims it mis-sold toxic residential mortgage-backed securities.

In April, Chancellor Philip Hammond said the government was prepared to sell its stake at a loss.

Posted on by CCKeith in Uncategorized
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