Royal Bank of Scotland has been forced to defend its practice of holding unminuted dinners before board meetings during the financial crisis.
The lender is locked in a legal dispute with investors who claim they were misled into taking part in its £12bn cash call just months before the bank, which was helmed by disgraced former chief executive Fred Goodwin, succumbed to a £46bn bailout.
Three groups of shareholders settled with the state-backed bank last week but two other claimants, including the RBS Shareholder Action Group, which represents 27,000 retail investors, rejected the £800m offer made by the lender.
It means the bank and Mr Goodwin still face the prospect of going to court in March.
As part of their claim, the investors alleged that RBS’s board, which at the time was led by chairman Tom McKillop, “typically met the evening before a board meeting and discussed and agreed agenda items over an unminuted dinner.”
RBS has admitted that gatherings were held and that minutes were not kept. However, in its defence documents, the bank “denied that agenda items were agreed at those dinners”.
It said: “The purpose was not to pre-empt the formal meeting the following day. Rather, they provided a forum for the directors to interact outside the formal board meetings and to discuss relevant matters”.
As well as Mr Goodwin, Mr McKillop would also have to appear in court if RBS fails to settle with its remaining claimants.
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