FORMER RBS chief executive Fred Goodwin could be sued personally by a shareholder activist group if campaigners successfully raise enough money to launch their suit, it emerged yesterday.
The RBoS Shareholders Action Group plans to begin legal proceedings in the next month, accusing RBS and several key bosses at the bank of misleading them about the strength of the bank during a £12bn rights issue in 2008.
Shortly after the cash call the bank needed bailing out by the government, and shareholders were left out of pocket.
The £3.3bn lawsuit will begin if the shareholders can find roughly £15m to buy insurance against losing the case.
RBS believes there are “substantial and credible legal and factual defences to the claim”, pledging to “defend itself vigorously” from the suit.
The claimants expect the case to cost tens of million of pounds in legal fees, as the bank has pledged to fight the claims.
But although Goodwin, as well as former RBS chairman Sir Tom McKillop and ex-investment banking head Johnny Cameron, are being targeted personally, they should not have to pay out individually if the case does find them to have been in the wrong.
As directors of a major company they are covered by insurance against such an eventuality, giving them and the bank protection against the claims.