Pensions funds to pursue the Royal Bank of Scotland
Two local government funds are to sue Royal Bank of Scotland (RBS) for compensation for "massive losses" incurred when the bank had to be bailed out, according to media reports. RBS took 20 billion pounds of government funds.
Issued on: Modified:
AFP - British pension funds are to sue Royal Bank of Scotland (RBS) for compensation for "massive losses" incurred when the bank had to be bailed out and the share price collapsed, it was reported Monday.
Two local government funds claim that RBS and former chief executive Fred Goodwin "falsely reassured" investors the bank was in good health when it was "effectively insolvent" because of bad loans, The Times said.
RBS is 70 percent state-owned after taking 20 billion pounds of government funds as it struggled to cope with the global financial crisis. Last month it posted Britain's biggest ever corporate loss.
The Times reported that the two funds had hired Cherie Blair, the lawyer wife of former British premier Tony Blair who works under the name Cherie Booth, to file the lawsuit in a New York court.
She told the paper she had agreed to take on the case because of the "massive losses inflicted on local authority pension schemes and other UK institutions who were the largest investors in RBS".
Daily newsletterReceive essential international news every morningSubscribe