Just hours before Royal Bank of Scotland launched a massive cash call in 2008 to shore up its capital, the bank's senior advisers were still discussing whether its financial figures were potentially misleading for investors, court documents allege, Reuters reported yesterday. Late into the night, adviser Goldman Sachs, auditor Deloitte and a lawyer for RBS exchanged emails discussing the writedowns on troubled assets that RBS was about to publish, according to the "particulars of claim" filed by lawyers acting for shareholders now suing the bank. Goldman Sachs and Deloitte feared that some figures in the prospectus for the RBS cash call were vulnerable to misinterpretation, according to the particulars of claim. The advisers thought investors might conclude RBS's ability to withstand losses was stronger than it actually was, the claimants' filings, seen by Reuters, allege. The late-night emails were part of a series of warnings from outside advisers that were rejected by senior RBS executives as the bank sought to raise 12 billion pounds ($15 billion), according to court documents. RBS denies the allegations that it misled investors. Lawyers for RBS say in court documents that the valuation figures were reasonable and composed to help the bank decide an appropriate size for its cash call, not to guide investors on losses on the bank's assets. Read more.
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