The bank pushed good businesses under to make more profit claims a government report to be published tomorrow. If true, RBS could be guilty of “systematic fraud”.
RBS bank intentionally pushed good businesses into failure so it could take over their assets, claims a damning report due to be published tomorrow.
Lawrence Tomlinson was investigating RBS for the government as an independent advisor. What he found is “systematic fraud” that has ruined livelihoods and taken jobs out of the British economy, according to his own account.
“We’re really concerned that businesses that aren’t really struggling are pushed over the edge, and then these extra fees tip them over into administration,” said Mr Tomlinson speaking to Channel 4 News.
“Then you’ve got the loss of jobs and RBS owning the property.”
Business Secretary Vince Cable has referred the report to financial watchdogs including the Financial Conduct Authority (FCA) for investigation.
We should see people go to jail Lawrence Tomlinson
If Mr Tomlinson’s claims are proved true it could result in heavy penalties, Mr Tomlinson predicted:
“If it is proved that this is systemic and institutional fraud – and there is quite a lot of evidence from people within the bank that this is the case – then the relevant action should be taken. And if people have had their livelihoods stolen from them – we should see people go to jail.”
The allegations centre on loans that RBS made to small businesses – and the bank unfairly classing them as high risk. Classing them as high risk put the business into the hands of an RBS division called the Global Restructuring Group (GRG). Services from this group cost customers more. In some cases, that new cost may have tipped previously healthy businesses into trouble, and in Mr Tomlinson’s account, forced some to close, meaning the loss of jobs and livelihoods.
Mr Tomlinson’s point is that the bank was able to profit more from businesses in trouble – by charging higher fees and in the cases of failure, acquiring the business’s assets at a lowered price. He believes that RBS intentionally distressed businesses so this would happen.
An RBS spokesperson had this to say: “GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives. Not all businesses that encounter serious financial trouble can be saved.
“We are already committed to an inquiry to investigate how customers are treated by RBS when facing financial difficulties.”