FSA Says It Contacted RBS in Relation to Goodwin Allegations

The Financial Services Authority said it contacted Royal Bank of Scotland Group Plc (RBS) regarding allegations that former Chief Executive Officer Fred Goodwin had an affair with a senior colleague.

“We can confirm we contacted RBS in relation to this matter,” Joseph Eyre said in a phone interview today.

Goodwin yesterday withdrew part of an injunction barring newspapers from writing about a “sexual relationship,” hours after a lawmaker discussed details of the court order in Parliament.

“Every tax payer 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?” Ben Stoneham, a Liberal Democrat member of the House of Lords asked. “If true, it would be a serious breach of corporate governance and not even the Financial Services Authority would be allowed to know about it.”

The injunction was to prevent the publication of information about a sexual relationship that Mr. Goodwin had, Justice Michael Tugendhat said. Tugendhat said the media is still banned from naming the woman involved or giving any details about the affair.

“We are cooperating fully with the FSA,” RBS spokesman Michael Strachan said in an e-mail. “It would be inappropriate to comment further at this stage.”

RBS posted the biggest loss in U.K. corporate history in 2008 and required a bailout following the bank’s 73.3 billion- euro ($104 billion) acquisition of ABN Amro. Goodwin was cleared of responsibility in December in a report by the FSA on RBS’s 45.5 billion-pound ($74 billion) rescue.

Geraldine Proudler, a lawyer acting for Goodwin, didn’t immediately return a voice-mail message seeking comment.

To contact the reporters on this story: Ben Moshinsky in London at bmoshinsky@bloomberg.net;

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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