RBS Banker Superinjuncted Affair, Says Lord
Staff Writer, CNBC.com
Sir Fred Goodwin, the former chief executive of the Royal Bank of Scotland (RBS), took out a super-injunction to stop newspapers publishing details of an affair with a colleague at RBS, a UK peer said in the House of Lords Thursday.
The banker, whose hefty pension caused public outcry after RBS had to be bailed out by the British taxpayer during his tenure, allegedly took out a super-injunction earlier this year.
He quit in January 2009, just before the bank announced the largest annual loss in UK corporate history in 2008 following its disastrous acquisition of ABN Amro at the height of the credit crisis.
Lord Stoneham of Droxford, a Liberal Democrat peer, used parliamentary privilege to say in the House of Lords: “Every taxpayer has a direct public interest in the events leading up to the collapse of the Royal Bank of Scotland, so how can it be right for a super-injunction to hide the alleged relationship between Sir Fred Goodwin and a senior colleague.
“If true, it would be a serious breach of cooperate governance and not even the Financial Services Authority would be allowed to know about it.”
Lord McNally, the Justice Minister, replied: “I do not think it is proper for me, from this dispatch box, to comment on individual cases, some of which are before the courts.”
The news came during a week when the business world faces a round of sex scandals, most notably the allegations against former IMF head Dominique Strauss-Kahn.
German insurer Munich Re has admitted it hired 20 prostitutes as a reward for around 100 of its top sales executives at a party hosted in Budapest in 2007.
A rash of superinjunctions have been granted by the British courts in recent months, the vast majority preventing journalists from publishing details about the sexual trysts of the rich and famous.
The increasing use of superinjunctions has led politicians to call for an official privacy law to be put in place.
The gagging orders first came under the spotlight in the UK in 2009, when oil trading firm Trafigura hired law firm Carter-Ruck to stop newspapers reporting allegations that it had dumped toxic waste in the Ivory Coast. That super-injunction was eventually overturned when a question was asked about the super-injunction in parliament.
Those who take out super-injunctions out are finding that, while traditional media outlets will not publish the claims covered in the gagging orders, social media is much harder to police.