LONDON Dec 30 More than 160 investors in Royal
Bank of Scotland have asked the bank to create a
committee of shareholders to improve its corporate governance
and help avoid a repeat of mistakes that led to its 45 billion
pound ($55 billion) bailout.
ShareSoc and UKSA, two shareholder groups, will submit the
proposal at the bank's next annual meeting in May, with the aim
of improving the lot of long-term investors who have seen RBS
shares fall more than 95 percent since their 2007 peak.
The shareholders said their aims were to improve the
representation of individual retail investors in how the bank is
run and to avoid a repeat of past mistakes.
"A dominant CEO; concealing the true financial position of
the company from investors; proceeding with a reckless
acquisition; and then publishing a rights prospectus which
concealed the problems faced by the company," Mark Northway,
Sharesoc Chairman, said in describing those mistakes.
RBS could not immediately be reached for comment.
For the resolution to pass, it would need at least 75
percent of shareholder votes cast at the meeting. That means the
government, which holds 71 percent of shares in the bank, would
need to support it or abstain for it to go through.
A spokesman for UKFI, which manages the government stake,
declined to comment on how UKFI might vote.
Shareholder committees are largely unheard of in Britain,
though are a staple of corporate governance in Sweden, where
they nominate who should sit on a company's board.
RBS is still in the throes of a restructuring, which
includes asset sales, job cuts and tackling multi-billion dollar
charges to settle litigation and pay regulatory fines for past
The bank said this month it will pay more than 800 million
pounds to settle claims by four investor groups that the bank
misled them during a 12 billion pound fundraising at the height
of the financial crisis in 2008.
RBS along with other banks also faces an investigation by
the United States Department of Justice over its sale and
pooling of toxic mortgage securities in the run-up to the crisis
($1 = 0.8129 pounds)
(Reporting By Lawrence White; Editing by Rachel Armstrong)