LONDON (Reuters) - More than 160 investors in Royal Bank of Scotland (RBS.L) have asked the bank to create a committee of shareholders to improve its corporate governance and help avoid a repeat of mistakes that led to its 45 billion pound ($55 billion) bailout.
ShareSoc and UKSA, two shareholder groups, will submit the proposal at the bank’s next annual meeting in May, with the aim of improving the lot of long-term investors who have seen RBS shares fall more than 95 percent since their 2007 peak.
The shareholders said their aims were to improve the representation of individual retail investors in how the bank is run and to avoid a repeat of past mistakes.
“A dominant CEO; concealing the true financial position of the company from investors; proceeding with a reckless acquisition; and then publishing a rights prospectus which concealed the problems faced by the company,” Mark Northway, Sharesoc Chairman, said in describing those mistakes.
RBS could not immediately be reached for comment.
For the resolution to pass, it would need at least 75 percent of shareholder votes cast at the meeting. That means the government, which holds 71 percent of shares in the bank, would need to support it or abstain for it to go through.
A spokesman for UKFI, which manages the government stake, declined to comment on how UKFI might vote.
Shareholder committees are largely unheard of in Britain, though are a staple of corporate governance in Sweden, where they nominate who should sit on a company’s board.
RBS is still in the throes of a restructuring, which includes asset sales, job cuts and tackling multi-billion dollar charges to settle litigation and pay regulatory fines for past misconduct.
The bank said this month it will pay more than 800 million pounds to settle claims by four investor groups that the bank misled them during a 12 billion pound fundraising at the height of the financial crisis in 2008.
RBS along with other banks also faces an investigation by the United States Department of Justice over its sale and pooling of toxic mortgage securities in the run-up to the crisis.
Reporting By Lawrence White; Editing by Rachel Armstrong