02/03/2015 - 205 small and medium sized businesses are uniting to sue RBS, over the bank’s restructuring department (Global Restructuring Group) and its handling of struggling businesses.
RBS and GRG have been involved in investigations since 2013 when the Tomlinson Report revealed small businesses were allegedly forced to go bust under GRG’s supervision, ensuring the bank would profit from fees and assets. The FCA is currently looking into GRG’s actions before it is wound down by RBS.
Enyo Law firm, Lord Pannick QC and Andrew Hunter QC will represent the SMEs involved, known as the RBS GRG Business Action Group. Various senior employees from RBS will be called upon in the case, including former chairman Sir Philip Hampton, former deputy chief executive Chris Sullivan, GRG boss Derek Sach and RBS head of property Aubrey Adams.
In KSA's view, this is a positive step forward as banks should be helping struggling businesses, not pushing them further into insolvency. If a company is no longer viable to carry on, then the administration and sale of assets should be referred to an external organisation and not the bank's own restructuring division. This would avoid suspicion of any wrongdoing or poor handling.
Hopefully there will be a positive outcome later this year.