The Goodwin Effect: Enter Fred, exit staff and client

He shredded Royal Bank of Scotland – now his skillset is at work elsewhere

Still widely blamed for running one of the world's largest banking organisations into the ground, the curse of Fred the Shred appears to have struck again. An architectural firm which hired the former RBS banker Fred Goodwin as an adviser is now facing difficulties.

The Edinburgh-based RMJM, one of the world's largest international architectural practices responsible for landmark projects such as the Scottish Parliament, the Falkirk Wheel and Dubai's international conference centre, has suffered a series of troubling setbacks.

In the latest blow, a prestigious US university terminated its multi-million-dollar contract with the firm, apparently because of concerns over its finances and the numbers of staff leaving. The spokesman for West Virginia University was unavailable for comment yesterday, but the authoritative trade journal Building Design quoted Rossi Wiles, the university's legal adviser, confirming the contract had been terminated. He admitted to concern over numbers of people leaving the firm's New York office and that problems paying staff on time had a "bearing on the decision".

In a second setback, it was revealed last week that RMJM is facing a legal claim from 15 current and former employees in Hong Kong who allege that they are owed £100,000 in unpaid wages and other sums. The Hong Kong Labour Tribunal will hear the case next month.

The firm hired Mr Goodwin on a six-figure salary in January 2010, a year after his resignation from RBS and its bailout by taxpayers. At the time the company said Mr Goodwin was appointed as an adviser to work closely with their executive team. "Fred will be advising on our ongoing international strategy. He has a huge amount of international business experience. This is a rare [skill] set and one which is valuable and relevant to RMJM," a statement said.

One industry figure said the appointment had stunned the architectural world. "People were seriously astounded at Goodwin's hiring by the firm. That they would employ someone with such a toxic reputation was such a PR disaster."

That view was echoed last month by the award-winning architect Will Alsop, who worked for RMJM for two years before quitting last year. Mr Alsop said the appointment was "just stupid" and a "PR nightmare".

David Pringle, RMJM's former chief executive for Middle East and Asia business, who left last year, blamed Mr Goodwin's "ruthless" cash-management strategy at the time. Mr Pringle said he was forced to make up staff salaries out of his own pocket when wages were paid late.

"I felt forced to make up salary payments for the Asia region more than once out of my own money because managing staff in this part of the world is very difficult," Mr Pringle said. "Fred was deeply unpopular with most of the directors and staff that he came into contact with. A fantastic, lovely guy socially – but in work mode no empathy, very hard, making some very difficult decisions."

Other industry sources claim the company was in difficulties before Mr Goodwin was appointed.

A spokesman for the architects said: "It is a matter of profound regret when salaries are not paid on time but we take all possible steps to keep such delays to an absolute minimum." They declined to make any further comment.

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