RETIRED bank workers involved in a multimillion-pound legal claim against the Royal Bank of Scotland and former directors have told how their retirement pots have plummeted after they bought into a rights issue before the bank's near-collapse.
Members of the RBS Shareholders' Action Group claimed retirement incomes have been damaged after being allegedly misled by RBS into investing £12 billion in a rights issue, five months before it was bailed out with £20bn of public funds in late 2008.
It came as warnings of legal action in the form of letters of claim were delivered to former RBS chief executive Fred Goodwin, former chairman Sir Tom McKillop, its former head of investment banking Johnny Cameron and 16 other ex-directors as revealed by The Herald yesterday. The bank was also due to receive a copy of the 50- page-plus document from the group representing some 7400 shareholders, 80 institutional investors, including Deutsche Bank and Collins Stewart. It is part of preparations for a potential £3bn challenge at the High Court in London.
Peter Hoare, 68, a former administration manager at NatWest –which was bought by RBS in 2000 – bought £17,000 worth of shares in the Edinburgh-based bank over his career. He purchased another £10,000 worth after hearing Goodwin address a pensioners' lunch about the share issue. They have plunged in value from £6 each then to just 27p.
Mr Hoare, from Hertfordshire, said: "He was a very persuasive man, very charismatic and it was based on hearing him talk that I made the further investment. I thought it was something I had to do to protect the value of what I already have. Basically they are all worthless now and I feel we were duped."
Former NatWest secretary Jean Birchall, 72, bought an extra £4000 of shares after receiving a letter about the rights issue. It brought her total investment in the bank to around £19,000. The shares are now worth approximately £2000.
Mr Birchall, of Dartford, Kent, said: "It felt a bit like blackmail. The overall feel of the letter was 'if you don't take part, you will lose out in the future'. Obviously I have lost out a fair deal. We haven't got a lot of money but we did save so we could have a decent retirement."
It is the third shareholder civil action to be raised against RBS with legal proceedings ongoing in the earlier cases.
RBS said it had "substantial, credible and factual" defences to the claim..
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