Shareholders threaten multi-billion-pound legal action against RBS

Shareholders have threatened to launch a multi-billion-pound legal action against Royal Bank of Scotland and its former boss Fred ‘The Shred’ Goodwin.

Former RBS directors are accused of wrongly encouraging thousands of shareholders to invest in the bank just before it was saved by a £20 billion taxpayer bail out.

Lawyers for the group of shareholders claimed that a rights issue which the bank undertook in 2008 was promoted on a ”misleading basis”.

The rights issue eventually raised £12bn for RBS.

The RBS Shareholders’ Action Group, members of whom lost out when the bank’s share price collapsed, have issued letters warning of potential legal action to a small group of former directors, including Mr Goodwin.

RBS chiefs have denied any suggestion they misled shareholders and have vowed to defend the company ”vigorously”.

In a statement, RBS said it had ”substantial and credible” legal and factual defences to any claims.