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Court fight over RBS 'insolvency' Court fight over RBS 'insolvency'
(about 2 hours later)
A former QC has raised a civil court case against Royal Bank of Scotland, claiming it concealed the true state of its finances when it sold him shares.A former QC has raised a civil court case against Royal Bank of Scotland, claiming it concealed the true state of its finances when it sold him shares.
Ian Hamilton, 83, alleged RBS was already insolvent when it launched a £12bn rights issue in April last year.Ian Hamilton, 83, alleged RBS was already insolvent when it launched a £12bn rights issue in April last year.
Mr Hamilton, one of a group which took the Stone of Destiny from Westminster Abbey in 1950, raised the case at Oban Sheriff Court's small claims court.Mr Hamilton, one of a group which took the Stone of Destiny from Westminster Abbey in 1950, raised the case at Oban Sheriff Court's small claims court.
Lawyers for the bank argued that the case should be held in a higher court.Lawyers for the bank argued that the case should be held in a higher court.
They said it was an action of "exceptional complexity".They said it was an action of "exceptional complexity".
Mr Hamilton believes the action should remain in the small claims court and has said he will abandon the case if it is moved to the higher court, such as the sheriff court.Mr Hamilton believes the action should remain in the small claims court and has said he will abandon the case if it is moved to the higher court, such as the sheriff court.
The case continues. The pensioner said he was "sheltering under the rule" that in the small claims court expenses were limited to £150.
Mr Hamilton, from North Connel, Argyll and Bute, bought 640 shares at £2 per share in April's rights issue. The shares are now valued at less than 20p.Mr Hamilton, from North Connel, Argyll and Bute, bought 640 shares at £2 per share in April's rights issue. The shares are now valued at less than 20p.
Bank's downfallBank's downfall
The bank recently came close to collapse and is now 68% owned by the taxpayer after being given £20bn of state support.The bank recently came close to collapse and is now 68% owned by the taxpayer after being given £20bn of state support.
In addition, RBS has said it will post a loss of about £28bn when it publishes its full-year results later this month.In addition, RBS has said it will post a loss of about £28bn when it publishes its full-year results later this month.
Mr Hamilton also hopes the case will answer some questions over the bank's downfall. Mr Hamilton alleges that the bank was "negligent in representing themselves as solvent at all material times when in fact they were insolvent".
"We've had a parliamentary committee inquiry, in which everyone has said they were terribly sorry but they didn't tell us what they had actually done," he said. At the beginning of the case Mr Hamilton withdrew an allegation of fraud against the bank which had previously been contained in the writ.
The pensioner said the writ he had lodged in court stated that the bank invited shareholders, including his wife, to invest in a rights issue and that he took up the offer on her behalf. He added: "I have come to the conclusion, with some reluctance, that what appears to have happened here was the officers of the bank dug a very big hole for themselves."
He alleged RBS induced him to invest his money by "concealing the true state of their finances". He added: "The chairman of the company has now admitted that the acquisition of ABN Amro was an error, leading to the defenders acquiring huge debts."
And he alleged the bank was "negligent in representing themselves as solvent at all material times when in fact they were insolvent". The court heard from Mr Hamilton that people were said to live in a democracy.
"If this is so, there must exist a court in which the members of that democracy can defend their little pieces of property against the big beasts which prowl about in our society," he added.
Solicitor advocate Joyce Cullen, representing RBS, said the action would include "detailed pleadings" and there was no provision for this in the small claims court.
Ms Cullen said the bank was denying all the claims made by Mr Hamilton.
She added that expert analysis of accounts would be relied upon and expert evidence would be required by the defender.
The court heard Mr Hamilton was opposing the motion to move the case because of his "age and frailty" and the fact it was likely to take some time to be heard.
But Ms Cullen said the RBS was happy for the case to remain in Oban and even if it did go to the Sheriff Court, it would be dealt with relatively swiftly.
Mr Hamilton is well-known for his exploits while he was a law student at Glasgow University.Mr Hamilton is well-known for his exploits while he was a law student at Glasgow University.
He and three friends broke into Westminster Abbey on Christmas Day 1950 and took the iconic stone on which Scottish kings were crowned.He and three friends broke into Westminster Abbey on Christmas Day 1950 and took the iconic stone on which Scottish kings were crowned.
It had been plundered from Scone Abbey in 1299 by Edward I of England. It was believed to have been plundered from Scone Abbey in 1299 by Edward I of England.
The students held on to it for a year before leaving it in Arbroath Abbey.The students held on to it for a year before leaving it in Arbroath Abbey.