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UPDATE 1-RBS settles with more investors over 2008 cash call lawsuit
April 27, 2017 / 4:14 PM / 8 months ago

UPDATE 1-RBS settles with more investors over 2008 cash call lawsuit

(Adds claimant statement, source material)

By Kirstin Ridley and Anjuli Davies

LONDON, April 27 (Reuters) - Royal Bank of Scotland has reached an out-of-court settlement with another batch of shareholders who alleged they were misled during a 12 billion-pound ($15.5 billion) cash call in 2008, the state-owned bank said on Thursday.

The latest settlement, which follows a similar deal struck with four other investor groups last year, leaves a rump party of investors claiming damages of around 520 million pounds, excluding interest and costs, weeks before a trial is scheduled, one source familiar with talks said.

The deal has splintered the vast RBoS Shareholder Action Group, with 40 percent of the value of the original claimants now settled.

“We are pleased that some members of our group have been able to come to an agreement with the bank,” said the shareholder group, which still represents around 27,000 retail investors and around 20 institutions.

“However, we remain resolute in our fight for justice for retail shareholders and the numerous institutions that remain in this litigation,” said the group, which represents thousands of current and former RBS shareholders.

Shareholders lost around 80 percent of their investment after buying into RBS’s rights issue as the credit crisis raged in 2008, shortly before the bank almost collapsed and received a 45 billion-pound government bailout.

Edinburgh-based RBS said it had now reached a full and final settlement with shareholders representing 87 percent of the original claims by value in the litigation - without any admission of liability.

“We are pleased to have reached this agreement,” Ross McEwan, chief executive of RBS said in a statement.

“We will continue to explore the possibility of settlement with the remaining claimants but if we cannot settle on agreeable terms we will defend the claims at trial.”

RBS last year set aside 800 million pounds to settle investor claims totalling around 4 billion pounds from five investor groups in an unprecedented lawsuit over alleged omissions and misrepresentations about its financial strength when it launched the rights issue during the credit crisis.

After four groups settled the bank nudged up a 41.5 pence per share offer to 43.5 pence per share in March in the hope of avoiding a trial that will rake over the facts of its near collapse and state bailout and call former CEO Fred Goodwin to court.

One source said the RBoS Action Group members who settled their case on Thursday had accepted the 43.5p per share offer. ($1 = 0.7756 pounds) (Additional reporting by Lawrence White, Editing by Rachel Armstrong, Greg Mahlich)

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