Angry bank shareholders meet to discuss legal action
Angry shareholders from banks nationalised during the financial crisis were meeting today to discuss plans to recoup their "confiscated property".
Investors in Royal Bank of Scotland were gathering to consider possible legal action against the former directors of the now partly state-owned institution.
At the same central London venue, Bradford and Bingley shareholders were holding talks over compensation claims against the Government.
RBS is now 70 per cent owned by the taxpayer following a Government bailout a year ago and lost a UK record £24.1 billion in 2008.
The RBS action group's potential claim will focus on "significant errors and omissions" made at the time of its £12 billion rights issue in April last year, six months before the crisis.
RBS - whose balance sheet was fatally weakened by its acquisition of Dutch bank ABN Amro under former boss Sir Fred Goodwin - made the then-record call for funds from investors to strengthen its finances.
Shareholders were asked to buy new shares at 200p each, with 95 per cent of the stock being bought up.
But shares were hammered in the wake of the Lehman Brothers collapse and the Government rescue, while the bank's stock fell to an all-time low of 10p in January.
Spokesman Roger Lawson said the action group would be looking to raise funds for legal advice on the strength of a potential claim.
He believed the prospectus issued with the rights issue underestimated the risks facing the group and "substantially misled" shareholders.
Although the justification for the rights issue was to boost its finances, Mr Lawson described it as a "bailout to fund (the bank's) past mistakes".
Meanwhile, B&B shareholders, who claim they have not been offered an explanation for the company's nationalisation, were hearing from Peter Clokey, an independent valuer for the Government, as well as Liberal Democrat MP Susan Kramer at the meeting at St Columba's Church, Pont Street.
The firm was believed to be hoping to stave off eventual closure by turning itself into a mortgage services firm.
B&B has seen staff numbers fall from around 1,400 to 1,000 in the past year through redundancies and natural wastage.
The group's savings business was sold to Abbey and Alliance & Leicester owner Santander a year ago.
B&B posted a pre-tax loss of £160 million for the six months to the end of June, up from £26.7 million a year earlier.
Although the lender predicted increasing repossessions this year, it said the proportion of its mortgages in arrears had risen more slowly than expected so far.
Possessions and loans more than three months in arrears rose to 5.88 per cent in the first half of 2009, but edged downward to 5.82 per cent at the end of July amid signs of stabilisation.
B&B traces its history back to 1851 but it was formed in the 1964 merger which amalgamated the Bradford Equitable Building Society and the Bingley Building Society.
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