Third legal action launched against RBS

Fred Goodwins board sparked cash call prior to RBS collapse. Picture: Ian Rutherford

THOUSANDS of small shareholders in Royal Bank of Scotland yesterday launched a £20 million legal action against the bank alleging they were misled as to its financial strength at the £12 billion rights issue in 2008.

The RBS Rights Issue Action Group, represented by Leon Kaye Solicitors, said the proceedings were on behalf of 3,500 private investors.

Leon Kaye said: “Although the RBS Rights Issue Action Group has from the outset primarily represented the interests of small and medium sized investors, proceedings have been issued on behalf of investors ranging from holdings of 100 shares up to 100,000 shares.”

RBS, whose then-chief executive Fred Goodwin and other former directors led the cash call prior to the bank’s collapse, vigorously contests the claim.

Two legal actions had previously been launched on the issue, one by the RBoS Shareholders Action Group, and another representing institutional investors.