Published: Wed, May 24, 2017
Money | By Armando Alvarado

RBS struggles to seal deal over 2008 cash call dispute

RBS struggles to seal deal over 2008 cash call dispute

Legal action by thousands of shareholders against Royal Bank of Scotland has been further delayed. "The present position is that the majority of claimants have indicated their willingness to accept the latest offer from the defendant", Jonathan Nash QC, for the claimants, told the judge, according to the BBC.

RBS had doubled its offer to investors as CEO Ross McEwan staged an 11th-hour personal intervention at the weekend, a person with knowledge of the matter has said.

The high-profile trial was due to start on Monday but has not got off the ground because of progress being made in on-going negotiations between the claimants and the bank.

The offer made to the 9,000-strong shareholder group was raised to 82p a share.

The bank has previously settled compensation claims brought against it by other shareholder groups in connection with the 2008 rights issue.

Judge Robert Hildyard criticized RBS for its "extraordinary" spending on lawyers.

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The judge allowed the adjournment but warned: "There will come a time when the claimants must simply realise that it is incumbent on them to make up their minds whether to continue with the litigation".

"They (settlement talks) haven't gone as expected", one said.

RBS nearly doubled its out-of-court offer to investors on Sunday from around 43.1 pence to 82 pence per share, sources have told Reuters, in an effort to avert a trial that will rake over events that led to its near collapse and a state bailout at the height of the credit crisis.

The legal action centres on a rights issue overseen by former boss Fred Goodwin in April 2008 when RBS asked existing shareholders to pump £12 billion into the bank after leading a consortium that spent £49 billion on Dutch lender ABN Amro.

Just months later, the government was forced to step in with a 45.8 billion pound taxpayer-funded bailout, the largest bank rescue in history.

RBS, which remains more than 70 percent state owned, denies any wrongdoing and says its former executives did not act illegally. Shareholders lost around 80 percent of their investments.

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