LONDON: Royal Bank of Scotland said on Monday that it had settled legalclaims with the majority of shareholders who had alleged they were misled whenthey took part in the bank's 2008 12 billion pound ($15.23 billion) rightsissue.
The state-backed bank said it hasreached a full and final settlement with three of the five groups of investorswho were pursuing lawsuits against it over the ill-fated cash call. RBS is nowtrying to reach an agreement with the other two groups in order to avoid thecase coming to trial in March 2017.
The bank said it was willing to makeavailable a sum of up to 800 million pounds to be split across all fiveshareholder groups to bring an end to the legal action.
RBS raised 12 billion pounds in April2008 but six months later it had to be rescued in a 45.5 billion poundgovernment bailout and has since failed to post an annual profit. The sharesissued in the rights issue have lost around 90 percent of their value.
More than 35,000 shareholders who tookpart in the cash call, including some of Britain'sbiggest institutional investors and public pension funds, allege RBSdeliberately concealed the extent of its financial problems when it raised themoney.
The legacy of the drawn-out case hascast a shadow over the Edinburgh-based bank, which is still 73 percentstate-owned.
Itfailed the UK's annual bank stress tests last week, forcing it to bolster itscapital position as it prepares for misconduct fines and lawsuits that analystsand lawyers have estimated could cost the bank up to $27 billion. .
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