Monday, January 19, 2009

The victims of RBS

I have two relatives, getting on in their years, both of whom have holdings of shares in RBS - one of them a rather large holding.

One of them had taken comfort in the charity they intended to leave the money to as a legacy.

Both of them were given the shares in inheritance, and can't bring themselves to sell because of the memory of the people who help them before.

And anyway they used to be worth a lot and banks are such respectable businesses, surely its just a matter of holding on to them.

Over Christmas I tried to explain to both that share prices can go to zero, and I would just sell now.

But these people trusted RBS and its board. One even bought more shares when the company asked for support with its rights issue.

Now instead of a legacy and maybe some small inheritance to pass down the family there will be massive debt and taxes for their grand children to pay because the likes of RBS over paid for ABN/Amro and let a Russian oligarch make of with billions of pounds.

Today its apparent that some in RBS are still drawing salaries in the £700k/yr range.

People are no where near angry enough about this.

PS Don't think I'm letting Brown of the hook here. He's got a tremendous amount to answer for in the way RBS has been 'saved'. But just for now lets ask why there isn't more action, restructuring and general humility from RBS for how it has betrayed its share holders.

{ I suspect it may be a ploy from Labour to use the board of one or two banks as scape goats later on in this crisis. }

See also The DT is talking about the plight of small RBS shareholders here.


Anonymous said...

Not only did the RBS executive and board of directors betray its shareholders it managed to hoodwink its loyal staff to subscribe to the rights issue.

Many staff supported the Bank to the hilt following this appeal to raise capital.

The board of directors and Sir Fred Goodwin should face criminal charges for what can at best be descibed as gross incompetence but more like fraud and deception.

Anonymous said...

humiliation for the Scots, in tonight's news in Australia they are calling them the Royal boo boo bank of scotland.
I feel very sorry for the problems this is causing your aged relatives.A national disgrace.

Man in a Shed said...

Anon - yes I know RBS staff also ( well one of the banks they swallowed ). They have lost the value of the shares they were issued as bonuses etc. ( These are counter staff rather than big city traders ).

I think the betrayal of trust issue hasn't been explored anywhere near enough.

NatWest's management where sidelined by the gun hoe RBS board in their leveraged take over and now they are all suffering.