Former business secretary Vince Cable slams "obscene in the extreme" RBS legal defence costs in shareholder group action

William Turvill
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Liberal Democrat Spring Conference
Vince Cable is seeking re-election in when the UK goes to the polls on 8 June (Source: Getty)

Former business secretary Vince Cable has slammed “obscene in the extreme” legal costs of defending former RBS executives in a case brought by shareholders.

The bank, which is still more than 70 per cent owned by the taxpayer, is set to rack up legal costs of more than £125m on the case. And at least £6.5m will go towards defending four former execs, including disgraced banker Fred Goodwin.

Read more: Former RBS boss Goodwin to appear in court

“The cost of defending Fred Goodwin and his associates is shocking,” said Cable, who this week announced his intention to run for parliament once more.

“The government should not be allowing a state-backed bank to spend what is therefore majority taxpayer money on defending one of the architects of the credit crunch and financial crisis.

“RBS’ legal expenditure is obscene in the extreme. Such heavy spending wreaks of trying to steamroll over opponents.

“The government must intervene and warn the institution it owns that there remain consequences to be had from the worst excesses of this dreadful era in RBS’ history.”

Read more: RBS' legal costs are about to hit £125m

The legal claim is being brought by the RBS Shareholder Action Group, which represents several institutions as well as 27,000 retail shareholders, including 4,000 RBS employees.

They are suing the bank and its former management for allegedly misleading them ahead of a £12bn fundraising in 2008. Most of the bank’s share value was subsequently eliminated after a £45bn taxpayer rescue.

An RBS spokesman said: “We believe we have strong defences to this claim and will defend ourselves vigorously in court.

"It is normal practice under company law that directors would be indemnified in relation to any third party legal action arising from their tenure at the bank."

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