The Serious Fraud Office has confirmed it is making inquiries into last year's £12 billion rights issue by the Royal Bank of Scotland.  Politicians have called for an investigation into whether shareholders were misled when they were asked to put more money into the bank last April.   

Last April RBS put out what was at the time the biggest begging bowl in British corporate history as the credit crunch began to hit home. They asked shareholders to come up with an extra £12 billion to shore up its finances.

The shares were offered at 200 pence each. Now , less than a year later the shares are worth just 15 pence each.

RBS is now no longer the biggest company in Scotland, and it is 70% owned by the Government. Some politicians are calling for the police to investigate the bank.

They want to know whether RBS directors misled the public when they launched the rights issue - did they know the bank was actually in a far worse state than they were letting on?

Christine Grahame MSP said: "There are serious concerns on behalf of my constituents who've lost thousands and thousands of pounds in RBS share value.  These are just allegations, but I think there's sufficient out there for the police to launch an investigation."

Tavish Scott MSP, leader of the Scottish Lib Dems added: "We need to know whether the rights issue that RBS asked for and started last year was begun at a time when the bank was already failing. There are very big questions about what the bosses and the directors knew at that time."

Several agencies are now looking at this.

Christine Graham has complained to Lothian and Borders Police. They will be seeking directions from the serious fraud unit at the Crown Office, which will have to decide whether there should be a full police investigation.

The Serious Fraud Office in London is making inquiries as well.

RBS is already facing legal action from the lawyer Ian Hamilton QC - he bought shares for £1200 last April and they are now worth just £90.

The bank has declined to comment - but of all of this is another headache, another dose of bad publicity, when it is already enduring the most difficult period in its 300 year history.