RBS court case adjourned as bank makes last-ditch attempt to settle with thousands of investors

The plaintiffs allege that RBS management gave a false impression of the financial health of the bank ahead of a £12bn cash call in 2008

Morning commuters rush past a branch of the Royal Bank of Scotland (RBS) in London (Reuters)

A High Court trial pitting Royal Bank of Scotland against thousands of shareholders has been adjourned after the bank offered a last-minute settlement.

The group of investors allege that the lender misled them over a 2008 cash call. The taxpayer-owned bank has almost doubled its settlement offer to 82p per share as it attempts to avoid a potentially embarrassing court battle.

The trial was due to open on Monday, with the claimants alleging that the bank’s former executives deliberately made RBS appear more healthy than it was before it asked shareholders for £12bn cash in 2008.

Just months later, RBS was bailed out by the Government with £45.8bn of public money as the bank came close to collapse .

RBS has already settled with 87 per cent of the claimants for 41p per share but the remaining group of around 9,000 investors have rejected the bank’s offers and pledged to take their fight to the courts.

Last month RBS raised its offer to 43p per share but the investors are understood to have been holding out for closer to 100p.

Sources familiar with the case said that Ross McEwan, the RBS chief executive, was directly involved in negotiations over the weekend, Reuters reports.

The bank has already spent £100m preparing for the case and would rack up further bills over the course of the trial, which is expected to take 14 weeks if it goes ahead.

It is not yet clear whether any of the investors have accepted the offer.

RBS, which remains more than 70 per cent state-owned, denies any wrongdoing over the 2008 rights issue and says that its former bosses did not act illegally.

Additional reporting by Reuters