Mn Services to sue RBS in UK over sub-prime losses
EUROPE - The €69bn Dutch asset manager and pensions provider Mn Services says it will file a lawsuit against the Royal Bank of Scotland (RBS) for damages in wake of the sub-prime montage crash.
Mn Services claims it has suffered from the sharp decline in value of RBS shares, after the bank had understated its exposure to US sub-prime mortgages.
Between June 2007 and January 2009, the asset manager invested in RBS preference shares and other securities, which significantly decreased in value after the bank was subsequently bailed out by the UK Treasury.
According to Cecile Willems, spokeswoman for Mn Services, the lawsuit will be filed in the UK courts after a bid for a class action suit in the United States failed.
"The US judge granted the class action to a lead plaintiff who doesn't represent European interests.
"As we expected to miss out as a consequence, we have decided to proceed under British law," she explained.
Kris Douma, head of responsible investment at Mn Services, added that at least 20 other institutional investors in Europe will join the court case, but declined to provide further details.
A spokesman for APG, the asset manager for the €231bn civil service scheme ABP, said that APG was "closely watching the developments".
At the end of June, ABP's holdings in RBS were €14m, a breakdown of its holdings showed.
Mn Services will be represented by US law firm Coughlin Stoia Geller Rudman & Robbins, he said.
As a pensions provider for the large metal schemes PME and PMT, Mn Services is the asset manager and pension administrator for almost 2m participants at 35,000 affiliated companies.
RBS declined to comment.