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Tycoon to sue Coutts for ‘losing’ millions
Robert Lea19 Dec 2008
THE Queen's bankers Coutts could be sued by one of Britain's leading businessmen who fears the bank might have lost much of his £160million fortune in the financial crisis.
Sir Keith Mills, who helped to orchestrate London's 2012 Olympic bid, has launched a campaign in which he accuses Coutts of putting him into "safe" savings bonds marketed by deeply troubled financial institution AIG which had to be bailed out by the American government to the tune of $85 billion (£56 billion).
The tycoon is now lobbying other Coutts customers who are likely to be in the same position and has formed an action group which could be hugely embarrassing politically.
While it markets itself as a private bank to the nation's wealthy, Coutts is in fact a division of Royal Bank of Scotland - the high-street banking group which got itself in so much trouble the Government now owns a 57 per cent stake as part of the taxpayers' £500billion bail-out of Britain's banks.
Sir Keith made successive fortunes from founding the Air Miles airline travel loyalty scheme and then running Nectar, the loyalty scheme whose members include Sainsbury's and BP.
When Nectar was sold he is reckoned to have banked most of the personal £160 million proceeds with Coutts.
In an open letter to fellow Coutts customers on a website www.couttsaigactiongroup.org, Sir Keith said: "Coutts recommended to me and I assume many other customers that I place my money in AIG Life Premier Bonds as a way of protecting my capital.
"Coutts said my money would be safe as AIG was the largest insurance company in the world, AA rated, and that the bonds provided instant access to my money just like a deposit account. Later, given the negative press reports about the future of AIG I queried with Coutts in writing the safety of keeping my money with AIG but they replied that they did not have concerns about these bonds so I retained them.
"Then this September payouts from the bonds were frozen.
"Bondholders have now been forced to accept two choices. Firstly is we try to withdraw our cash now, we face the prospect of losing large sums of money. Or secondly we have our money tied up with AIG for three-and-a-half years with no certainty that our money will ever be returned."
Coutts says it did not mis-sell financial products and added: "It was made clear that the investment was low risk but not risk-free and that the value of the investment could go up as well as down."
It is reckoned British investors have a total exposure of £5 billion to AIG bonds. The bonds carry a minimum investment of £100,000 and until recently were offering to pay interest of 6.5 per cent - way above what was available in most savings accounts. It is understood that anyone attempting to get out off AIG bonds is being offered only 86.5p for every £1 invested.
Reader views (11)
I am inclined to feel little sympathy for someone who has hoarded wealth, is essentially well insulated from financial problems that will see many lose their jobs and homes, and did not have the sense to manage his own investments. He and all the other greedy Coutts fools are seeking to milk RBS, whilst all the time knowing that the money they take comes from taxpayers who bailed it out. That money is needed to maintain the businesses that we all depend on.
- Rondog, London, UK, 23/12/2008 17:57
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He thinks he is privileged, you got no chance, did not you read the small print.
It says quite clearly, we take no responsibility, if you have stuffed yourself, you must accept the consequences.
- Royston Amphlett, Bournemouth England., 20/12/2008 19:48
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Take the 86.5p on the £1 and run. Done well to only lose 15% in this market.
- Mark, Gibraltar, 20/12/2008 18:20
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happy to say that I still owe Couttes about 200 pounds, i was with them many years ago, and then lost my job.hahaha never did pay back the overdraft.
- Jaberwokie3, switzerland, 20/12/2008 16:04
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What planet is this guy from? Who on earth puts 100% of their portfolio in a single product with a single institution? Ever heard of portfolio theory, risk diversification/management and wealth preservation? Utter idiot! Coutts credibility has to be in shreds! They have been negligent in their advice as they failed to reasonably diversify the client assets. I wonder what the commission was from AIG? Bet it was way high!! Follow the cash and the truth will be revealed! Sue them!
- James Ritchie, new malden, 19/12/2008 18:42
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As he helped to orchestrate London's Olympic bid he should be stripped of his entire fortune to help pay for it.
- Dereck, London, England, 19/12/2008 14:02
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I'd have to agree with you there Neil. 'Wealthy tycoon loses money and sues private bank' hmm doesn't really compare with 'Woolwoths staff (to name but a few) lose jobs, homes, cars etc. However, they can't afford to sues anybody.
It's Sir Keiths mentality throughout the banking system that has caused alot of this mess.
- James, Berkshire, 19/12/2008 12:01
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If you gamble you must expect to win or lose surely. Is this not gambling. Also advice is just that advice. You dont have to take it do you! Who is at fault in these situations the advice giver or the advice taker! You make your decisions in life but these days the consequences always seem to be the fault of some one else.
- Pedro, Dubai UAE, 19/12/2008 11:52
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Has anyone on here got a spare tissue, to wipe the tears away i'm crying.
With laughter of course, shares can go up as well as down, welcome to the real world.
- P I Staker, London, 19/12/2008 11:30
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As long as all of the directors at Coutts keep their bonuses then I'm happy.
- Gerrard Buckley, London, 19/12/2008 11:22
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Stocks can go up as well as down.
As "one of Britain's leading businessmen" he should know this. Lesson learnt for next time eh?
- Neil, Notting Hill, 19/12/2008 11:00
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