RBS de­nies al­le­ga­tion it 'mis­led' MPs


Royal Bank of Scot­land (RBS) de­nied a Bri­tish law­maker's al­le­ga­tion that its ex­ec­u­tives mis­led a par­lia­men­tary com­mit­tee over the ex­tent to which the bank mis­treated small busi­nesses dur­ing and af­ter the fi­nan­cial cri­sis.

The chief ex­ec­u­tive and chair­man of state-owned RBS were ques­tioned ex­ten­sively last week by Bri­tain's Trea­sury Se­lect Com­mit­tee (TSC) over a restruc­tur­ing unit that is al­leged to have pushed strug­gling firms into bank­ruptcy in order to be able to pick up their as­sets on the cheap. But Clive Lewis, a Labour law­maker and a spokesman for the op­po­si­tion party on Trea­sury mat­ters, said in par­lia­ment that a full ver­sion of a re­port into the bank's be­hav­ior, that has not been made pub­lic, gave a dif­fer­ent ac­count.

"Hav­ing read the doc­u­ment I be­lieve it shows that RBS ex­ec­u­tives mis­led the Trea­sury Se­lect Com­mit­tee in their ev­i­dence," Lewis told par­lia­ment. "Far from be­ing iso­lated in­ci­dents of poor gov­er­nance as they claimed to the com­mit­tee, this re­port ex­plic­itly states their be­hav­ior was, quote, 'sys­temic and wide­spread'." A spokesman for RBS de­nied it had mis­led the TSC.

"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," he said. Al­le­ga­tions about the Global Restruc­tur­ing Group (GRG) have over­shad­owed ef­forts by RBS to re­form its im­age a decade on from the fi­nan­cial cri­sis and as the gov­ern­ment pre­pares to start sell­ing down its 70 per­cent stake in the bank. RBS Chief Ex­ec­u­tive Ross McEwan had pre­vi­ously said the "vast ma­jor­ity" of firms it dealt with were turned around, al­though he ac­cepted last week this was not the case. RBS and the Fi­nan­cial Con­duct Au­thor­ity (FCA), which reg­u­lates Bri­tish banks, have stopped short of say­ing GRG sys­tem­at­i­cally and de­lib­er­ately pushed firms into ad­min­is­tra­tion, al­though both have ac­knowl­edged fail­ures.

An­drew Bai­ley, chief ex­ec­u­tive of the FCA, is due to make a rou­tine ap­pear­ance be­fore the com­mit­tee on Wed­nes­day. RBS has set aside 400 mil­lion pounds ($555 mil­lion) to cover claims re­lat­ing to the restruc­tur­ing unit, which han­dled more than 12,000 trou­bled busi­nesses be­tween 2007 and 2012. Lewis said the full ver­sion of the re­port, which was com­mis­sioned by the FCA but is yet not pub­lic, was more damn­ing.

"The bank boasted one fam­ily busi­ness was set to ' lose their shirts' so RBS could get a chunky equity deal," he said. The full ver­sion of the re­port has been at the cen­ter of a year­long dis­pute, with the com­mit­tee frus­trated at the reg­u­la­tor's re­fusal to pub­lish it.

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