Disgruntled investors in Royal Bank of Scotland will gather today to consider a possible legal action against the former directors of the part-nationalised bank.
An action group working on behalf of around 7,000 private shareholders will lay out their potential case at a meeting in London today.
RBS is now 70% owned by the taxpayer following a Government bailout a year ago and lost a UK record £24.1bn in 2008.
The action group’s potential claim will focus on “significant errors and omissions” made at the time of its £12bn 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% 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 believes 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”.