DISGRACED banker “Fred the Shred” Goodwin and his former colleagues at Royal Bank of Scotland (RBS) will not face criminal charges over the near-collapse of the bank eight years ago, after the Crown Office said there was “insufficient evidence”.
Prosecutors had been investigating the bank for five years following its near-collapse in 2008 – dubbed the biggest corporate disaster in British history – and the government’s £45 billion bailout.
Paisley-born Goodwin was in charge of RBS through the crisis and came under fire for his part in it. He was eventually stripped of his knighthood in 2012 because of the “scale and severity of the impact of his actions”.
However, the Unite union has criticised the Crown Office decision and has called for a public inquiry.
Its national officer for finance, Rob MacGregor, said: “It is staggering that eight years after the near implosion of RBS no one has faced criminal charges.
“Instead it is our members and the bank’s customers who have been left to deal with the fallout.
“Unite will be calling for a full public inquiry, not only into RBS, but into the collapse of the entire banking sector in 2008.
“Those responsible must be called to account for their actions.”
In a statement, a Crown Office spokesman said: “The failure of RBS is an issue of great public concern. The Crown undertook a thorough, independent investigation following publication of the FSA report in December 2011.
“The Crown’s investigation focused on the rights issue of April-June 2008, and involved detailed consideration of whether there was any evidence of criminal conduct associated with the rights issue.
“If there were such evidence those responsible would face prosecution. If not, the public in Scotland could be reassured that the matter had been properly investigated.”
He added: “Following careful examination of all the evidence seen to date, Crown Counsel have decided that there is insufficient evidence in law of criminal conduct either in relation to RBS as an institution or any directors or other senior management involved in the rights issue.”
The rights issue asked RBS shareholders to inject £12bn into the bank to strengthen its reserves, after Goodwin had led it on an acquisition trail and splurged £49bn acquiring the Dutch bank ABN Amro.
However, the deal proved toxic and, just months later, the value of RBS shares plunged by 90 per cent and the government had to step in to prevent its total collapse.
RBS is still 73 per cent owned by the taxpayer and some shareholders are engaged in a multibillion-pound civil action against the bank over the rights issue. Goodwin and others may yet be called to account when that action concludes.
The Crown Office spokesman continued: “If any further evidence comes to light which is relevant to this inquiry it will be considered by the Crown and we reserve the right to make further inquiry, if considered appropriate.”
He said the investigation into the rights issue had been “extremely complex” and included a team of forensic accountants and banking experts examining more than 160,000 documents.
“The investigation involved close co-operation with a range of financial regulators and banking institutions, including the Financial Conduct Authority, the Prudential Regulation Authority, the Federal Reserve Bank of New York, the Serious Fraud Office and the Financial Reporting Council,” said the spokesman.
Goodwin became a public hate figure. He had joined RBS in 1998, and became CEO in 2001 at the age of 42 after his work in the takeover of NatWest. In that deal he earned his reputation as “Fred the Shred”, and cut 18,000 jobs by merging parts of RBS and NatWest’s operations.
Profits soared during a period of rapid expansion and Goodwin was credited with transforming RBS into a worldwide force, but some shareholders criticised him for putting global growth over short-term returns.
He spent £350 million on a new headquarters in Edinburgh, but the bank went on to post a £24.9bn loss in 2009, then the biggest in corporate history. Many experts said Goodwin was one of the central figures responsible for the financial crisis.
There was further anger when it emerged he had left RBS with a £700,000 pension, and his Edinburgh home was vandalised by protesters.
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