Cahal Milmo: 'Fred the Shred' thought the bad headlines had gone away. He was wrong

Our writer reports on yet another public humiliation for the former RBS chief

Related Topics

When militant activists staged an attack in 2009 on Sir Fred Goodwin's Edinburgh villa, he may have consoled himself with the thought he could sink no lower in the public estimation.

But a new nadir beckons in the life story of the man widely dubbed "the world's worst banker" for his role in running up losses of £24bn at the Royal Bank of Scotland after it was revealed that the super-injunction granted to him had the purpose of concealing an alleged extra-marital affair with a former colleague.

The gagging order, which had had the curious side-effect of forbidding anyone from referring to the former RBS chief executive as a "banker", was partially lifted after the naming of Sir Fred by a Liberal Democrat peer in the House of Lords rendered farcical any attempt to mask him.

The ruling still prevents the disclosure of the name of Sir Fred's lover and details of their relationship. But questions were soon asked about whether the alleged affair played any role in the events which led to the largest single loss in UK corporate history and his resignation in 2008.

Lawyers for Sir Fred insisted last night that he had never done "anything improper" in his conduct of business at RBS. But the draconian nature of super-injunctions, whose existence cannot be reported, has led to debate about their ability not only to frustrate the desire of the media to publish personal information, but also inquiries by regulatory and even law-enforcement bodies.

Until yesterday, the terms of the court order obtained by Sir Fred were so strict they raised questions about whether the Financial Services Authority, which is preparing a definitive report into how the banking crisis happened, might be unable to use the information contained within the injunction to conduct its inquiries.

The debate is an indication of just how far Sir Fred – dubbed Fred the Shred for the supposed relish with which he cut costs – has fallen since the days when he was welcomed into 11 Downing Street by Gordon Brown, and he presided over the transformation of a finance minnow into the fifth-largest bank on earth.

Raised in Paisley, Sir Fred prided himself on his image as a self-made banking plutocrat. The son of an engineer, he was the first member of his family to go to university and by 29 was made a partner in the accountancy giant, Touche Ross. His reputation for cutting jobs and costs led to him being poached in 2000 as the chief executive of RBS, grande dame of Scottish banking, founded in 1727. With the blessing of his board, Sir Fred embarked on a strategy to expand RBS – making 26 acquisitions at a cost of more than £35bn, including a £23.6bn hostile takeover of NatWest, a rival three times its size. It was the final spurt in this buying spree – a £55bn buy-up of the Dutch bank ABN Amro in 2007 – which ultimately proved to be Sir Fred's (and RBS's) undoing.

The bank was the most high-profile victim of the 2008 liquidity crisis and had to be nationalised at huge cost to the taxpayer. Suddenly, what had seemed like statements of the success of a global finance powerhouse (a new £350m RBS headquarters opened in 2005 by the Queen and described as "comically expensive", a company jet and £200m spent on corporate sponsorship) were held up as examples of a hubristic excess personified by Sir Fred, a vintage car enthusiast. The banking boss found himself carrying the can for the collapse of RBS and did nothing to elicit public sympathy when it emerged he had left his job with a £3m nest egg and an annual pension of £703,000. Only after a huge outcry was it reduced to £342,000.

Faced with his new status as the Ozymandias of global banking, Sir Fred disappeared from public view in a friend's French villa, while his most aggressive detractors, calling themselves Bank Bosses Are Criminals, threw bricks through his windows.

Such a humiliation might have persuaded lesser mortals to seek anonymity. But Sir Fred, whose friends have stated repeatedly that he has been demonised unfairly, had engineered something of a comeback.

After his purchase last year of a £3.5m mansion outside Edinburgh the former banker has accepted a £100,000 consultancy role with a leading architecture firm, RMJM.

One way or another, it would seem, the British public have not heard the last of Sir Fred Goodwin.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

Read Next

Election catch-up: I’m not saying the Ed stone is bad – it is so terrible I am lost for words

John Rentoul

Election 2015: The SNP and an SMC (Salmond-Murdoch Conspiracy)

Matthew Norman
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living