The row over Royal Bank Of Scotland’s (RBS) controversial GRG unit has taken a new turn with the leak of a full copy of a special report.
The bank had previously denied it had misled the Treasury Select Committee when giving evidence and claimed that cases of ‘mistreatment’ of small businesses had been ‘isolated,’ but the report said 92% of small businesses involved had received ‘inappropriate treatment.’
Only extracts of the report have been published so far, but now Labour MP Clive Lewis says he has read the report in full and said the bank’s behaviour had been ‘systemic.’
The report by the Financial Conduct Authority (FCA) concerns the activities of RBS’s Global Restructuring Group (GRG).
The unit has been accused of mistreating more than 12,000 companies who were referred to it for help in recovering from difficult financial circumstances.
The bank claimed the alleged mistreatment had not been widespread and, though errors had been made, it had only affected a few companies. They have set aside £400 million to resolve complaints and pay compensation. Around £115 million has been paid out so far.
Using parliamentary privilege, Mr Lewis, who is Labour’s Treasury spokesman, said: “I have received a full and unredacted copy of the Financial Conduct Authority’s investigation into RBS, which the FCA has so far refused to release, including to the Treasury Select Committee.
“Far from being isolated incidents of poor governance, as they claimed to the committee, this report explicitly states their behaviour was ‘systemic and widespread’.
“In one shocking passage of the report, out of hundreds, the bank boasted one family business was set to ‘lose their shirts’ so RBS could get a ‘chunky equity deal’ – meaning the bank would acquire its assets cheaply.
“Furthermore, it is clear the summary of the report the FCA has published is what I would politely describe as a sanitised version,” added Mr Lewis.
Treasury Select Committee chair, Nicky Morgan, said the FCA had consented to publish the report once it had completed its investigations into conduct at GRG.
“The committee expects these investigations to be completed swiftly and will ask the FCA to confirm its intention to do this at its evidence session tomorrow. The committee has the power to require the FCA to produce the report.
“The committee’s priority has always been to bring maximum transparency to events at GRG. In doing so, the committee must ensure that the information it receives is accurate and complete.
“For this reason, were it to decide to publish the report, it would generally look to the FCA, as the body that commissioned the GRG review, to provide it.”
An FCA spokesman said the summary of the report had been reviewed independently by Andrew Green QC, who was appointed by the Treasury committee and had ‘concluded that it was a fair and balanced account of the findings of the report and closely reflected its tone and narrative’.
A spokesman for RBS said it would ‘strongly deny’ it had misled MPs and added: “The evidence we provided to the Treasury committee accurately reflected the bank’s position.
“We are not clear on what basis the allegations are being made, but we would strongly deny the suggestion that we misled the committee.”
A spokesman for the GRG Business Action Group, which represents more than 500 businesses, said: “What Clive Lewis said in Parliament today is extremely worrying and surely makes immediate publication of the FCA report an urgent priority in the public interest.
“He described the FCA’s published summary as a ‘sanitised version’ of the actual report. In view of the FCA’s repeated assurances that it is not favouring RBS, this is a shocking allegation.”