By Andrew MacAskill
LONDON A judge on Thursday ordered legal representatives of thousands of shareholders suing Royal Bank of Scotland (RBS.L) over a 12 billion pound ($15 billion) cash call to prove they have insurance to meet the hefty risks of a trial.RBoS Shareholder Action Group, a 27,000-strong group of retail shareholders backed by around 100 institutions, was told to be more transparent about its ability to cover legal expenses if they lose the case, dating back to 2008, according to court documents. The trial is due to start in May.High Court Judge Robert Hildyard said he was "troubled by the inconsistency of statements" by legal representatives of the group. At least one statement was inaccurate and had been made without the knowledge of the claimants' solicitors, he said. "I have also become concerned whether there is sufficient funding," Hildyard said. "In light of the concerns I have expressed, I think it appropriate and necessary that there should be more transparency as to the funding position."
State-backed RBS has run up a legal bill of well over 100 million pounds so far in the case and expects to spend another 25 million pounds to the end of the first trial.The RBoS shareholder group has so far exceeded 20 million pounds in costs, the judge said.The bank had sought to push the claimants to reveal details of its funding because of what the judge called "the magnitude of the claimants' exposure."
RBoS Shareholder Action Group and the bank declined to comment.The civil lawsuit has been brought by investors who bought shares in a 2008 cash call and lost most of their money when the bank collapsed a few months later. RBS was rescued by the U.K. government with a bailout that ended up costing 45.5 billion pounds.
The investors are suing for compensation, alleging RBS did not give a proper picture of its finances at the time of the cash call. RBS denies the allegations that it misled investors.Four claimant groups accepted RBS's offer of 800 million pounds last year to draw a line under the allegations, leaving the shareholder group as the last to take the case to trial. ($1 = 0.8230 pounds) (Reporting by Andrew MacAskill; Editing by Ruth Pitchford)
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Published Date: Mar 10, 2017 01:15 AM | Updated Date: Mar 10, 2017 01:15 AM