Busi­ness­man sues RBS for $184 mil­lion over al­leged con­spir­acy

Pakistan Observer - - 14 -

LON­DON—The former CEO of a soft­ware com­pany is su­ing RBS (RBS.L) for al­legedly con­spir­ing to push the busi­ness into ad­min­is­tra­tion to ben­e­fit from its sale, court fil­ings show, in the lat­est case to al­lege mis­con­duct by the bank’s re­struc­tur­ing divi­sion. Scot­tish busi­ness­man Neil Mitchell is seek­ing 128 mil­lion pounds ($184 mil­lion) in dam­ages on claims that Royal Bank of Scot­land (RBS) con­spired in 2007 with co-de­fen­dants KPMG and U.S.-based fund Cerberus Cap­i­tal Man­age­ment [CBS.UL] to sell as­sets of his com­pany, Torex Re­tail plc, for be­low their value.

Mitchell al­leges RBS pushed Torex Re­tail into ad­min­is­tra­tion - a form of pro- tec­tion from cred­i­tors un­der which ex­ter­nal man­agers from KPMG were brought in - in or­der to force its sale to Cerberus and so rid its books of a bad loan it was owed by Torex, doc­u­ments filed at Bri­tain’s High Court of Jus­tice show. Mitchell also al­leges in the court fil­ing that RBS and Cerberus con­spired se­cretly to en­sure Torex would be sold for be­low its value to Cerberus. The al­le­ga­tions in­clude con­spir­acy by un­law­ful means, breach of trust and neg­li­gence.

“We have thor­oughly in­ves­ti­gated Mr Mitchell’s al­le­ga­tions and be­lieve them to be en­tirely with­out merit. Mr Mitchell has cho­sen to is­sue legal pro­ceed­ings which will be met by a full de­fense,” a spokes­woman for RBS said. A spokes­woman for KPMG de­nied it acted im­prop­erly, said Mitchell’s claims had no sub­stance and that KPMG had ap­plied to have the case struck out. The claims once again fo­cus at­ten­tion on RBS’s Global Re­struc­tur­ing Group (GRG), a divi­sion be­ing in­ves­ti­gated by Bri­tain’s fi­nan­cial reg­u­la­tor fol­low­ing claims by hun­dreds of small busi­nesses which say GRG mis­treated them or forced them out of busi­ness.

RBS, 73 per­cent-owned by the UK gov­ern­ment, asked law firm Clif­ford Chance to un­der­take an in­de­pen­dent re­view of GRG, which found no ev­i­dence for the al­le­ga­tions. Bri­tain’s Fi­nan­cial Con­duct Au­thor­ity has hired firms Promon­tory Fi­nan­cial Group and Mazars to con­duct its own in­ves­ti­ga­tion and pro­duce a re­port, orig­i­nally sched­uled for the end of last year and now ex­pected to be pub­lished in mid-2016. The reg­u­la­tory in­quiry comes as RBS Chief Ex­ec­u­tive Ross McEwan is try­ing to re­brand the bank as the big­gest sup­porter of smaller busi­nesses in the UK.

The court doc­u­ments name former RBS Chair­man Philip Hamp­ton and former Chief Ex­ec­u­tive Stephen Hester as among those who rep­re­sented RBS in its deal­ings with Torex Re­tail. Hester and Hamp­ton de­clined to com­ment. Torex Re­tail, which sold soft­ware for touch screen shop­ping tills, went into ad­min­is­tra­tion in June 2007 af­ter Mitchell and other ex­ec­u­tives at the firm blew the whis­tle on fraud they had dis­cov­ered within the com­pany.—Agen­cies

IS­LAM­ABAD: Ufone’s CEO Rainer Rathge­ber along with Sharmine Aziz of Op­er­a­tion Eid Child; Parveen Saeed of Khan Ghar; Omar and Daniyal of De­war-e-Me­har­bani at the launch of Ufone’s CSR ini­tia­tive.

A logo of the Royal Bank of Scot­land (RBS) is re­flected in the win­dow of a branch of­fice in Lon­don.

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