Royal Bank of Scotland is being sued for misleading investors during its £12bn emergency fundraising in 2008, in a landmark joint claim brought by Dutch bank ING and pension funds for British coal miners.
The suit, which could see former RBS chief executive Fred Goodwin summoned to give evidence in court, was filed at the high court in London on behalf of 21 separate claimants.
They invested a combined £130m at the peak of the financial crisis, when RBS propped up its balance sheet by selling shares at £2 apiece, only four months before it announced the second largest banking loss in UK corporate history.
A number of attempts to sue RBS have hit the buffers in the US, but this is the first claim to have been filed against the bank in the UK and others could join the action.
"This is just the beginning," said Clive Zietman, whose firm Stewarts Law is co-ordinating the claim. "What we've got is a small selection of those who invested in the rights issue. It's quite possible others may join our claim, and others may start their own claims."
Among those bringing the suit are the Coal Staff Superannuation Scheme, the Mineworkers' Pension Scheme, pension schemes for electricity workers in the UK, a number of ING funds and the teachers' retirement system of the state of Illinois.
In an eight-page document, they argue that the prospectus given to shareholders during the rights issue of April 2008 contained "material mis-statements" and "omissions". They claim that under the Financial Services and Markets Act the bank is liable to pay compensation amounting to the difference between what was paid for the shares and their actual value.
Their view is that the difference was in fact the whole or a substantial part of the price they paid, given the slide in RBS's shares, which would be worth 28p today were it not for changes to the way the bank calculates its market value.
In a statement, the claimants said: "Although the prospectus portrayed an image of the bank being in a state of financial good health and stability, the reality was very different and had the truth been known, the take up of shares under the rights issue would have been severely impacted."
RBS declined to comment.
The suit is the first to be brought using the relevant section 90 of the FSMA, and if successful could lead to new actions against failed banks.
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