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On the
responses we get to our mailings to shareholders there are a number of
common questions. The answers to these are as follows:
A – Does it
matter that I have subsequently sold my RBS shares, or some of them? No you
would still have an interest in regards to any legal action associated with
the rights issue.
B – Does it
matter that my shares (or some of them) were held in a nominee account? No,
as the beneficial owner of the shares your claim would not be prejudiced.
C – Will
shareholders who do not register their interest in our group still benefit
if a legal case is pursued and won? Not necessarily because these matters
often result in a “settlement” with the claimants and only those people who
have registered their interest would benefit from the settlement.
D – I did
not subscribe for the rights issue. Are you doing anything to recover losses
on other RBS shares that I held? We will look at the other issues associated
with this company at a later date but our short term priority is the rights
issue and disclosures that will result from any action on that matter may
provide the necessary further information required.
E -
Who would the legal
action be against? The action would be probably against one or more of the
following: the
directors of the company at the time, the organisations who attached their
name to the prospectus or acted as promoters of it, the auditors who audited
and signed off the published accounts, and the company. We might of course
have to rely on the insurers of some of that list to receive any substantial
settlement because the directors would certainly not have sufficient assets
to meet the likely size of the claim for example. As regards the last of
that list (the company), yes it may be unwise for shareholders to sue their
own company and we would have to look carefully at that issue. For this
reason it is important for shareholders to have control of this action.
F – Are you
connected in any way with other groups that have formed to pursue legal
actions against RBS? No we are not. We have had some discussions with other
groups but we are not likely to merge our interests with them in the short
term although we may be willing to co-operate on any legal actions. We
recognise that duplication of effort is never a good thing but there are
significant differences between our group and others in terms of who is
controlling the group, the arrangements they have with legal advisors and
the costs they are likely to incur.
Our group has a democratic structure and is controlled by the affected
shareholders who support the group financially.
G - How can we be assured
that we will receive information on what the group is doing and where our
money has been spent? As a "company limited by guarantee" we have to file
some "Report & Accounts" with Companies House annually and these will be
made available to all members. In addition a general meeting of all members
must be held to approve those accounts, re-elect directors and deal with
other business and members will of course be able to ask questions at that
meeting. We will also be issuing newsletters on a regular basis concerning
the activities of the organisation and the status of the campaign.
H - If I am an employee or
pensioner of RBS, can I join the Action Group? There is no reason why you
cannot and we would not disclose your membership of this group without your
specific permission (although it may not be practical to conceal this if you
ultimately are a beneficiary of any legal action of settlement).
I - What are the possible
routes to compensation? In essence an action claiming compensation for a
false prospectus would be an expensive and long-winded High Court case in
the UK and would rely probably on the requirements for a prospectus to be a
fair statement of the position of the company and its prospects as required
by the Financial Services and Market Act (which reflects European Prospectus
Directives). It is not necessary to prove deliberate fraud. However these
kind of cases tend to get settled by agreement between the parties prior to
them getting to court - once the facts have been established and a close
study of the law made, it is often clear who has the stronger case.
J - What are the chances
of success? At this stage this is an almost impossible question to answer
and it would be unwise for us to attempt to do so. All lawyers will tell you
that legal actions are always uncertain. However, we would not be pursuing
the matter if we did not believe there was a strong case to be investigated.
We will not commence any court action or pursue any claim unless our legal
advisors indicate that it is worthwhile to do so.
K – Are you
running campaigns on other banks that have suffered from Government
“recapitalisation” of the banking sector or nationalisation. Not at present
although our constitution would permit us to do so, but the UK Shareholders
Association (UKSA – see
www.uksa.org.uk) has several campaigns running which includes campaigns
to support shareholders in Lloyds Banking Group, Bradford & Bingley and
Northern Rock.
L – If I
have other questions can I contact you? Many people write in questions on
the response forms they send us, often including lengthy comments which
invite a response. It is unfortunately not possible for us to respond in
writing to these missives or other letters of a general nature because we
have limited resources and it would cost us too much to do so (there are
over 100,000 shareholders who subscribed for the rights issue and we are
keen to control the costs of this campaign). However if you have any
questions we will try and answer them verbally – please call Vicky Cappin on
020-7286-4161 for assistance. But please review the material on our web site
first.
M – Can I
help in other ways to support this group? We would be glad to hear from
anyone who is willing to assist in organising meetings for shareholders and
otherwise promoting our activities. Please send an email to
info@rbosaction.org if you wish to
assist.
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