RBS treated me like nothing, says boss in £30m writ
THE entrepreneur behind a £30 million legal action against RBS has spoken of his anger at how he felt shamed by the bank’s controversial turnaround unit.
David Russell, chief executive at property developer Property Alliance Group, claims the bank cost him millions he ought not to have paid and said he was treated like he was ‘nothing’ in the process.
The action could open the way to a mountain of claims against RBS if appeal court judges rule that the bank had a duty to explain the complex details of Russell’s loans.
Russell told The Mail on Sunday: ‘I just want some truth to come out about what the banks were doing. I don’t back down to bullies.’
His Manchester-based business was put into RBS’s infamous Global Restructuring Group in 2010. The firm later had to pay £8.2 million to get out of interest- rate hedging products that were supposed to limit his loan interest payments.
Russell is suing RBS over his treatment by its restructuring arm, for being mis- sold the hedging products and also for the bank’s rigging of Libor rates, which were used to set the cost of his loans.
The case is set to be heard at the Court of Appeal next month after the bank won the first round in the High Court. The appeal will be closely monitored because it could define what responsibilities banks owe business customers over and beyond the limited requirements outlined in their contracts.
Russell said his experience of being put into RBS’s controversial turnaround unit had made him feel he had failed. He said: ‘There are a lot of people ashamed like I was at first. I didn’t like to talk about it. You feel like you’ve failed, like you’ve been had over and conned.’
Russell claims GRG managers were disrespectful, with one putting his feet on the table and inviting him to hand back the keys to the properties he owned if he refused the bank’s valuation.
‘They talk to you like you’re just nothing,’ he said.
The case has cost Russell £7.5 million to bring. RBS has run up its own costs of £11 million, including £2 million paid to law firm Clifford Chance, on top of fees paid to lead solicitors Dentons.
Fellow Manchester developers stung by the bank have been backing him in the case. Russell said: ‘There are a lot of guys who have encouraged me to do it, who couldn’t afford to do it themselves. There’s a lot of people who want to see RBS beaten in court.’
Many smaller firms have similar complaints to Russell’s, but their losses are generally not big enough to justify the expense of a High Court claim.
Russell’s Property Alliance Group has been able to bring its claim because it had access to other funds and was able to refinance away from RBS in 2015.
Since bringing the claim Russell said he had nevertheless been contacted by RBS ‘15 or 20’ times to ask if he wanted new loans. The bank said: ‘RBS rejects the allegations made by the Property Alliance Group Limited and will continue vigorously to defend this claim.’