RBS executives could face charges in the Enron scandal

Some senior executives at Royal Bank of Scotland could face criminal charges in the United States over their dealings with the collapsed energy giant Enron.

Ben Glisan, a former treasurer at Enron who is now a key prosecution witness, has told a court in Houston, Texas, that he thought a deal between RBS and Enron had been fraudulent.

Among the deals he was involved in and which he now says were illegal was a series of transactions between 1999 and 2001 which involved a power plant in Teesside. It is alleged that RBS bought the plant temporarily from Enron and sold it back a few months later as agreed, inflating the profits of the Texas-based energy trader. Enron collapsed three years ago after it emerged that it had fabricated profits and hidden debts using off-balance sheet transactions.

A report by Neal Batson, an examiner appointed by the US Bankruptcy Court, claims that the people involved in the deal included Iain Robertson, currently chairman of corporate banking and financial markets (CBFM) and a board member of RBS; Johnny Cameron, chief executive of CBFM; Tom Hardy, head of project and export finance; and Iain Houston, director of structured finance at the British bank.

The fourth report by Mr Batson, who delved into the Enron collapse, America's worst financial scandal, singled out RBS along with Credit Suisse First Boston and the Toronto-Dominion Bank for condemnation. The report concluded that "RBS aided and abetted certain Enron officers in breaching their fiduciary duties."

The US government has drawn up a secret list of 114 unindicted co-conspirators in the collapse of Enron. A US judge ruled this month that the names of about half of the alleged co-conspirators could be made public, but it turned out that those names had already been released. It is not known if RBS executives are on the list, but the bank's role is being scrutinised by the US Department of Justice.

A spokeswoman for RBS said yesterday the bank was just one of 114 that are being investigated in the US. She said: "We continue to cooperate fully with the appropriate authorities investigating Enron. As this is a very complicated matter, involving a large number of banks and legal actions, it would be wholly inappropriate for us to comment on any detailed matters. Enron was well known for using complex structured finance transactions and the accounting treatment of these was the responsibility of Enron and its auditors. We do not accept any responsibility for the actions of those parties and we will defend these proceedings vigorously."

Mr Batson said RBS was fully aware of Enron's accounting of the transactions related to the Teesside power plant and agreed to verbal assurances from the energy company. He quoted an internal RBS memo as saying: "We are therefore looking to verbal undertakings (they cannot be formally documented for accounting reasons) from Enron" that it would repay the equity.

Under new legislation which came into force in January and was designed to speed up the extradition of suspected terrorists, Britons can be extradited to America more quickly than before. Under the act, US authorities are not required to present a prima facie case, while UK authorities must do so when seeking extraditions from the US.

Three British former NatWest bankers are awaiting a decision from the Home Office on whether they can be extradited to face charges over their alleged involvement in a £4m fraud linked to the collapse of Enron. In October, a UK district judge ruled that Gary Mulgrew, David Bermingham and Giles Darby should be extradited. The Home Secretary is expected to announce his decision in February.

Douglas McNabb, a US criminal defence lawyer who has given evidence on behalf of the trio, plans to open an office in London as he believes there will be a flood of extradition cases.

The first criminal conviction against financiers associated with Enron was secured last month when executives at Merrill Lynch were convicted of fraud charges over a transaction involving Nigerian barges.

Start your day with The Independent, sign up for daily news emails
A daily miscellany of general election facts, figures, trivia and traditions
voicesThere's still time for someone to do something to make us care
Life and Style
Arts and Entertainment
Michael Corleone, played by Al Pacino, goes back to his family's Sicilian roots in the first 'Godfather' film
Kim Kardashian speaks on the Today show about her step-father's transition
Wenger and Mourinho square-up to each other earlier this season
sportAll the action from today's Premier League, including Everton vs Man Utd and Chelsea vs Arsenal
Tepper had a stunningly successful career as a songwriter
Arts and Entertainment
Len Blavatnik
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions