Pension funds target mission RBS millions – Public Sector finance chiefs set to join class action against bank over huge losses
2 March 2009, 3:03 pmRoyal Bank of Scotland faces legal action from three of the country’s big local authority pension funds to reclaim some of the millions they have lost in the near-collapse of the bank.
The trio include Strathclyde Pension Fund, Scotland’s biggest, which estimates RBS’s woes have cost it about £50 million. It has more than 180,000 members, including staff at 12 councils. The Falkirk and Highland pension funds have also told The Scotsman they are watching closely an attempt to launch a “class action” against RBS in the United States courts.
The action is being led by Cherie Booth, QC, the wife of former prime minister Tony Blair. If it gets the go-ahead, a New York court will hear a claim the bank and Sir Fred Goodwin, its former chief executive, are liable for “massive losses” incurred by pension funds as a result of false information allegedly provided by RBS.
The case revolves around an allegation that RBS failed to inform prospective investors of the dire state of its balance sheet, in the aftermath of the takeover of parts of Dutch bank ABN Amro, when it mounted a £12 billion shares issue last year.
In Scotland, there are 11 public sector pension funds, loosely based on the old system of regional councils. Most are thought to hold shares, or to have sold shares, in RBS.
The Scotsman
