RBS ‘Dash for Cash’ scandal 500 firms suing bank turn anger on regulator

SPECIAL REPORT

BY IAN FRASER

AGROUP of almost 500 businesses suing the Royal Bank of Scotland for allegedly destroying their firms and seizing their assets is threatening legal action against the Financial Conduct Authority if it does not immediately publish its long-awaited report into the scandal.

The central allegation of the so-called “Dash for Cash” scandal was that firms – in some cases healthy ones – were preyed on by RBS which effectively bankrupted the companies, bought the assets and made a profit from their suffering. RBS denies the allegations. David Stewart, spokesman for the RBS GRG Business Action Group, said:“Unless the FCA gives an immediate commitment to publishing the Section 166 report, we will initiate judicial review proceedings against them.”

The FCA, the financial regulator, launched a probe into the Dash for Cash scandal in January 2014. The report, produced by consultants Promontory and Mazars, was handed to the FCA in late summer but the regulator only confirmed receipt on October 5.

“We understand the S166 report recommends a compensation scheme for affected firms,” said Stewart. “It is essential that this scheme is independent and judicial, with full redress for consequential losses, and that it is not overseen by the FCA. We have no confidence in the regulator, given its previous compensation schemes have failed so many victims.”

The FCA stated: “There are a number of steps for the FCA to complete before we are in a position to share our final findings, which will include an assessment of all relevant material, of which the skilled person’s report is one. This has been a complex and lengthy review – it is therefore important that we do not rush the final stages of this process.”

Compensation for consequential losses takes into account missed opportunities to restore businesses back to the state they were in before the alleged wrongdoing occurred. Claimants have to demonstrate missed opportunities, slower growth, soured business relationships or even ill health brought about by financial difficulties.

Membership of the action group surged last week, with 68 additional firms signing up in response to reports that suggested RBS had an internal policy of tripping up viable business customers in order to profit at their expense. Membership rose to 479.

The action group intends to sue RBS and four of its former executives – including ex-chairman Sir Philip Hampton; Derek Sach, who ran the global restructuring group which took charge of distressed business customers; exhead of the bank’s property arm West Register Aubrey Adams; and ex-business banking chief Chris Sullivan – for “unlawful means conspiracy”, alleging they conspired against their own customers.

The Sunday Herald has run stories about how banks were maltreating business customers, including breaking the story of RBS’s global restructuring group (GRG), a division of the bank sometimes known as the “grim reaper” or “vampire” unit, where viable businesses claim they were abused and asset-stripped.

Kalvin Chapman, a partner at lawyers Muldoon Britton, said the Dash for Cash email sent out by RBS regional director Rhydian Davies on October 9, 2008 proves that the bank and its senior executives had no scruples about effectively looting cash and assets from business customers of RBS, NatWest and Ulster Bank. “It only cared about scalping customers and bleeding them dry,” said Chapman.

All remaining senior GRG executives are understood to have been summoned to a showdown meeting in RBS’s 280 Bishopsgate headquarters in London tomorrow. A spokesman said he was unaware of the meeting and would not comment on whether individual bank executives would be punished ahead of the FCA’s report.

One Scottish property developer said: “They took us to hell and back. They are a rogue organisation. It’s about time the regulator and the Government manned up to this. I have been screaming from the rooftops about it since 2012. I told Vince Cable about it then but he did sweet f**k all.”

The scandal, launched in a desperate bid to prevent RBS from total collapse during the financial crisis, just before it was saved by Government ownership in 2008, continued for several years after the bailout and a legal mopping-up exercise is still going on. It has led to

It’s about time the regulator and the Government manned up to this