It’s time the Crown Office reopened its Royal Bank inquiry

In Article Library by Ian Fraser

By Ian Fraser

Published: Daily Record

Date: 12 October 2016

Entrance to RBS head office, at 280 Bishopsgate. Photo: Ian Fraser

The former Lord Advocate, Frank Mulholland, said in May that, after a five-year probe, there was “insufficient evidence” to charge RBS executives over their stewardship of the bank. However, the Crown Office said its investigation could be reopened should fresh evidence emerge.

Well, the new Lord Advocate James Wolffe now has the perfect opportunity to do just that. On Monday, Buzzfeed News UK and BBC Newsnight published an investigation based thousands of internal documents that were leaked from inside RBS. They showed that, contrary to earlier denials, RBS did have a policy of crushing viable business customers for profit in order to save its own skin during and after the banking crisis. The process, dubbed project “Dash for Cash” in one internal memo, was revealed to have been systemic.

Businesses in certain sectors, many of which were viable firms, appear to have been cherry-picked for referral from across RBS’s branch network for referral to the bank’s global restructuring group. They were advised the unit was there to help them weather the economic storm. However for many such firms, GRG  turned out to be more akin to an abattoir than an intensive care ward.

The documents leaked to Buzzfeed and the BBC revealed that executives in GRG were incentivised to asset strip. They milked businesses that came their way for cash through huge fees and penal rates of interest, before driving them into bankruptcy ahead of asset-strippings, often using shadowy off-balance-sheet vehicles of the bank including the property group West Register and private equity division Strategic Investment Group. Tens of thousands of UK firms were damaged or extinguished as a results the state-rescued bank’s behaviour, and their owner/managers deeply traumatised.

The scandal, which labour MP and Treasury Committee member John Mann describes as “the biggest single scandal since the 2008” was designed to enable the bank to boost its own profits, bonuses and capital position at business customers’ expense.

Even after getting into trouble for misrepresenting the debacle to the Treasury select committee in June 2014, RBS is ignoring the fresh evidence of concerted wrongdoing and denying that it has done anything wrong. But we really cannot have a government-owned company rampaging up and down the United Kingdom, massacring customer firms at will. It’s now imperative that the FCA publishes its long-delayed report into the matter; that the businesspeople are compensated; and that the Crown Office reopens its inquiry.

Ian Fraser is author of Shredded: Inside RBS The Bank That Broke Britain.  An edited version of this piece was published in the Daily Record on 12 October 2016

Andy Verity’s powerful investigation into the RBS global restructuring group scandal, as broadcast on BBC Newsnight on 10 October 2016, and which coincided with the Buzzfeed News UK investigation, can be seen here:-