Bankers close to the company said NatWest had held regular discussions with the Bank of England's head of industrial finance, Mike Smith, about its negotiations with other banks over the future of Lancer Boss, which was pushed into receivership this month.
The Bank confirmed it had been kept informed about developments but said that it was not 'actively involved'. Bankers close to the negotiations said that the Bank was effectively powerless to do anything to help in a case where the German banks had lent money to a subsidiary based in Germany.
One banker commented: 'A few years ago the Bank of England commanded much higher authority and might have been able to threaten the German banks with some sanction, but it seems to be in a much weaker position now.'
NatWest is believed to be owed about pounds 15m. It will be paid out of the proceeds from the sale of the UK operations of the group, which are unlikely to fetch anything like this. The receivers say that if they had been able to sell the UK and German operations together, they would have raised much more.
The relationship between the British and German banks supporting Lancer Boss began to go sour in January. The British group - NatWest, Standard Chartered and the London branch of Dresdner - was owed about pounds 20m by the UK operation, while a Bavarian consortium led by Bayerische HypoBank was owed a similar amount by the local subsidiary, Steinbock Boss.
At the insistence of the Germans, Ludwig Schneider was installed as chief executive of the whole group in October.
According to British bankers, he concentrated on trying to persuade Jungheinrich, the Hamburg-based forklift truck maker, to buy Lancer Boss. In January, Jungheinrich made an informal offer so low that it was rejected by all banks involved.
The British banks, backed by one member of the German banking consortium, demanded that the merchant bank, NatWest Markets, be brought in to find new buyers. Mr Schneider objected and was replaced by a British manager, Charles Whyte.
Early this month the German subsidiary, Steinbock Boss, called in an administrator, tipping the parent company in the UK into receivership, and leading to Steinbock's sale to Jungheinrich.
One banker said NatWest had been totally outmanoeuvred by the German banks. 'The UK parent company should be controlling what's happening overseas in these situations. Here it's been the other way around.'Reuse content