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RBS shareholders can join legal action

Aggrieved shareholders in Royal Bank of Scotland have been told they still have an opportunity to join the legal action being brought against the bank in London.

But key institutions including Standard Life have still to decide whether to participate in the action.

The High Court has now approved a Group Litigation Order (GLO) dealing with all claims by shareholders or former shareholders in RBS who took up shares in the rights issue of April-June 2008.

The RBoS Shareholders Action Group said the GLO "provides that any individual or entity that issues a claim under the RBS Rights Issue Litigation must do so in the management court and that all claims will be entered on a Group Register ... kept at the offices of Bird & Bird LLP".

A cut-off point for new claims of April 15 is likely to be enforced by the court.

The action group has lodged a £4 billion claim against four former RBS directors on behalf of 12,000 small investors and 100 large shareholders including local authority pension funds, churches, charities, and several major Scottish institutions.

The Stewarts Law group has lodged a second action on behalf of institutional shareholders.

However, Standard Life, Prudential, Legal & General, and the Universities Superannuation Scheme, which are represented by US law firm Quinn Emanuel Urquhart and Sullivan, have still not committed to join the action, in common with the 8000-strong RBS Rights Issue Action Group represented by Leon Kaye.

The four institutions mopped up 10% of the new shares issued in 2008 at 200p, which (with RBS shares at 361p yesterday, equivalent to 36.1p) means their current paper losses on those shares would be 82% or almost £1bn.

The groups claim RBS's rights issue prospectus was misleading and omitted material information on the bank's capital position.

The bank says it has substantial and credible legal and factual defences.

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