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Former RBS vice-chairman among investors seeking to join rights issue case
February 10, 2017 / 7:09 PM / 6 months ago

Former RBS vice-chairman among investors seeking to join rights issue case

LONDON (Reuters) - A group of senior businessmen are among investors seeking to join a lawsuit against Royal Bank of Scotland (RBS.L) saying they were misled over its massive rights issue in 2008, according to sources and court documents.

Angus Grossart, a former vice-chairman of the bank, and Brian Souter, the founder of transport firm Stagecoach, have applied to join the case seeking about 200,000 pounds ($249,920) in damages, the documents filed at a London court show.

The civil lawsuit, due to start in May, has been brought by thousands of 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 UK 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.

The new group of shareholders are seeking to join the lawsuit even though it is almost three years after the six-year anniversary of the RBS share sale -- the cut-off point under English law after which damages claims can no longer be accepted.

Grossart and Souter did not immediately respond to requests for comment.

A separate group representing hundreds of investors are also seeking to join the lawsuit, according to sources familiar with the case.

RBS said on Friday it planned to resist the investors' request to join the case.

"RBS's consistent position has been that shareholders that have issued claims after the June 2014 limitation date are not eligible to claim and that it will defend all such claims on that basis," the bank said in a statement.

The state-controlled bank at the end of last year struck a deal with four parties of investors, who were among five separate claimant groups suing RBS for more than 4 billion pounds for alleged omissions and misstatements.

RBoS Action Group, a 27,000-strong group of retail shareholders backed by around 100 institutions, has said it plans to pursue the case to trial.

Reporting by Andrew MacAskill; editing by Susan Thomas

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