Firms Collapse Claims

November 25, 2013 by  

Firms Collapse Claims, The Royal Bank of Scotland has hired a law firm to investigate allegations the bank deliberately drove small businesses to collapse for its own gain.

The claims are contained in a dossier, compiled by government adviser Lawrence Tomlinson, which has now been passed to City regulators by Business Secretary Vince Cable, as Sky News revealed at the weekend.

The report suggests RBS – the largest lender in the UK to small firms – drove businesses to collapse so it could buy back their assets at rock-bottom prices.

Chancellor George Osborne has described the allegations as “shocking”, but small business campaigners say anecdotal evidence suggests the practice was widespread.

A spokeswoman for RBS – 80% owned by the taxpayer – confirmed that it had now hired law firm Clifford Chance to look into the claims.

Mr Cable referred the claims to City watchdogs
Mr Tomlinson, who has been compiling the report independently for the past six months, focuses allegations on the turnaround division at RBS – its Global Restructuring Group (GRG).

The division handles loans classed as being risky and is understood to have the power to scrap loan deals, impose inflated interest rates and charge hefty penalties.

But the report alleges that firms not necessarily in immediate financial distress are “engineered” into GRG, sometimes through small technical breaches of loan terms, such as late filing of minor financial information.

They are then hit with exorbitant rates and fees, which in some cases cause them to collapse, allowing RBS to buy their property and assets on the cheap for the benefit of its West Register property arm, according to Mr Tomlinson.

His report claims that fees charged by GRG can run into hundreds of thousands of pounds.

One business that submitted evidence to Mr Tomlinson said that it forked out £256,000 in fees alone while in GRG.

Another said that RBS made them pay an immediate sum of £40,000 to continue borrowing terms with the group.

Mr Tomlinson said he was calling for “immediate action to stop this unscrupulous treatment of businesses”.

Report to Team

Please feel free to send if you have any questions regarding this post , you can contact on

Disclaimer: The views expressed on this site are that of the authors and not necessarily that of U.S.S.POST.


Comments are closed.