RBS drama to intensify

Sunday 1 July 2012

Ian Fraser's scoop last week in The Herald about City lawyers Herbert Smith's defence of Fred Goodwin, Sir Tom McKillop and Johnny Cameron, and RBS v the RBoS Shareholders Action Group, has whetted appetites for what might – if it goes to court – be the cathartic investigation that politicians and regulators have avoided so far.

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Herbert Smith will attempt to show that there is no proof that Fred & Co knew how bad things were with ABN Amro when they solicited shareholders' cash in April 2008 for the UK's largest rights issue (£12 billion). The shareholders, represented by Bird & Bird, are expected to call high-level former RBS executives as witnesses who will claim to have discovered the extent of the financial carnage wrought by synthetic credit derivatives and other toxic treasures in ABN's Amsterdam and New York vaults after the fateful deal, but before the rights issue. The group intends to "issue proceedings against RBS by its half year results on August 3".

One interesting aspect of any courtroom drama will be the fact the above named trio will be jointly defending the action alongside the current regime, headed by Stephen Hester who employed a deliberate "blame-Fred" policy after becoming chief executive in November 2008. As Goodwin presumably owes his successor no favours, Hester's current problems may get worse. While Fred and Co have given Scottish business a bad name, Kelvingrove Art Gallery and Museum's 500 Years of Italian Art (until August 12) is a reminder that in terms of relations between commerce and public, things might be said to be going backwards. Glasgow's Italian collection was the first in the UK to be collected with commercial rather than landed wealth, that of the Glasgow coach builder Archibald McLellan (1795-1854), supplemented 100 years later by the shipping magnate Sir William Burrell (1861-1958). Of course, its impressive presentation in these surroundings was made possible by the old-style public-spiritedness of packaging, finance and drinks magnate, Lord Macfarlane of Bearsden (born 1926).

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RBS drama to intensify

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