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RBS seeks last ditch deal with Mills ahead of AIG showdown
by Danielle Levy on Nov 16, 2012 at 10:39
The chair of Royal Bank of Scotland (RBS) is seeking a last minute deal with Sir Keith Mills as the date draws closer for the entrepreneur to bring his case against Coutts to the High Court, according to reports.
Sir Philip Hampton is understood to have approached Sir Keith Mills within the last fortnight to discuss a settlement to compensate Mills for the mis-selling of the AIG Enhanced Variable Rate fund by RBS' subsidiary Coutts.
Mills, who set up the Nectar loyalty card scheme, had around £65 million of his personal fortune in funds invested in AIG bonds with another £8 million from a family trust.
A run on the AIG Enhanced Variable rate fund caused it to be suspended in 2008. At the time the remaining 247 clients who were still invested were given the option to withdraw 50% of their capital and have the remaining 50% transferred into the new AIG Protected Recovery fund to avoid a 13.5% haircut.
Lawyers for the two sides are expected to enter discussions about a multi-million pound out-of-court settlement over the coming days, according to Sky News, ahead of a trial that is due to begin at the end of the month.
If the case does go to trial, documents including internal emails and messages are expected to be read in court. While the sum Sir Keith is claiming in damages is unclear, reports estimate it could range from £5- £10 million.
The hearing would follow a four-year campaign for the entrepreneur, who has vowed to stick with the case.
Mills may have been offered compensation alongside other clients, who spent over three and a half years with their money parked in the AIG Protected Recovery fund, following the completion of an independent third party review, which was launched after the Financial Services Authority (FSA) imposed a £6.3 million fine on Coutts last year for failings in the way it sold the AIG Enhanced Variable Rate fund.
At the time a number of clients spoke of their frustrations with Coutts’ handling of the AIG compensation process, with one client offered less than 0.25% in lost interest over the period.
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