‘Horror stories’ pile up as another 450 firms complain about banks
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Thursday 26 December 2013
Lawrence Tomlinson, author of the inquiry which cited evidence that RBS had deliberately destroyed companies to make a profit, said on Thursday he has received another 450 cases since his report was published at the end of November. Mr Tomlinson, entrepreneur in residence at the Department for Business, Innovation and Skills, added that many of the new cases also related to RBS and its Global Restructuring Group (GRG).
The report found that many small business owners claimed they had good companies that were deliberately taken into GRG and then had their properties sold to the specialist property arm, West Register, to make profits. The implication was that these businesses were taken into GRG to generate revenue for the bank by charging fees, as well as aiding the purchase of devalued assets by West Register.
While removing a bad debt from a bank’s books is not unreasonable, particularly as lenders have been trying to move away from riskier assets, Mr Tomlinson said that many small business owners had the perception that their companies were being “purposefully distressed” and gave examples of mistreatment.
The Yorkshire businessman said he has yet to check the validity of the latest cases but will be passing on all information to the Financial Conduct Authority’s the City’s watchdog, and will be assisting with its investigation.
The FCA and the Prudential Regulation Authority are investigating about 200 earlier complaints, which formed the basis of his original inquiry, commissioned by Vince Cable’s business department. Mr Tomlinson’s report, which saw specific names redacted when it was published – has been sent in full to the regulators. Mr Tomlinson is also helping the RBS chief executive, Ross McEwan, with the bank’s own inquiry into the allegations. It has appointed City law firm Clifford Chance to review the report’s allegations. Mr Tomlinson said: “I remain very supportive of Ross. He seems intent on improving performance within the bank. It’s still early days, and in the FCA’s investigation, but it is clear that he is taking the issue seriously, which is refreshing.”
Mr Tomlinson began reviewing small business bank lending because he kept hearing stories from local suppliers that they were either finding it impossible to get access to finance. “At the same time, the big banks like RBS and Lloyd’s were always in the media saying that they were lending,” he said. “There was a disconnect and I wanted to find out what is really happening. I didn’t expect to discover such horror stories about companies being deliberately put out of business.”
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