British ministry may join investor suit against state-owned RBS


Reuters

* Lawsuit alleges RBS misled investors over 2008 cash call
    * Government official represents some shareholders
    * Former RBS CEO Goodwin to testify in trial starting May

    By Lawrence WhiteLONDON, April 21 (Reuters) - A British government department
has applied to join a class action suit to represent some
shareholders who are among those state-owned Royal Bank of
Scotland <RBS.L> is alleged to have misled in 2008, a document
seen by Reuters shows.
    The Ministry of Justice's move ahead of next month's trial,
at which former RBS chief executive Fred Goodwin is due to
testify, is the latest twist in one of the costliest cases in
British legal history.
    The civil lawsuit is being brought by RBS investors,
including former and current employees and around 100
institutions, who bought shares during a 12 billion pound
($15.35 billion) rights issue. They allege RBS, which later had
to be rescued in a 45 billion pound bailout, and four of its
former directors, concealed the extent of its financial woes.
    The Accountant General of the Senior Court has applied to
join the RBoS Shareholder Action Group to represent those such
as children and the estates of people who have died intestate
and might not otherwise be able to pursue claims, sources
familiar with the case told Reuters.
    The Ministry of Justice declined to comment on the
application, which follows a similar move in February by senior
businessmen including former RBS vice-chairman Angus Grossart.
[nL4N1FV4YF]
    Goodwin could not be reached for comment. RBS said it
believes the bank, Goodwin and three other former executives
named as defendants, have a strong case.
    Claimants in such cases are typically restricted by a time
limit of six years from the date when they could reasonably have
found out about the offence, lawyers said, raising the question
of whether new joiners to the suit will be allowed.
    "We consider all new claims issued to be time barred and we
will vigorously defend the claims on that basis," an RBS
spokeswoman told Reuters when asked about the application.
    The case has already led to out-of-court settlements by RBS
totalling hundreds of millions of pounds, with four of five
groups originally suing the bank. [nL4N1FV4YF]
    RBS has had to disclose more than 25 million pieces of
information, including private emails and other messages sent by
senior executives, to lawyers who allege RBS management at the
time deliberately hid evidence of its deteriorating health
before shareholders, who subsequently lost 80 percent of their
investment, were tapped for cash.
    RBS raised its settlement offer to the RBoS Shareholder
Action Group, which includes institutions such as Bank of
America Merrill Lynch, Axa and Aberdeen Asset Management, as
well as businessman Trevor Hemmings, by 2 pence to 43.5 pence
per share in March. [nL5N1H52LJ]
($1 = 0.7798 pounds)

 (Additional reporting by Kirstin Ridley and Andrew MacAskill;
editing by Alexander Smith)
 ((lawrence.white@thomsonreuters.com; +44 207 542 6137; Reuters
Messaging: lawrence.white.thomsonreuters@reuters.net))

Keywords: RBS LAWSUIT/



This article appears in: World Markets , Stocks , Economy , Banking and Loans
Referenced Symbols: RBS


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