Goodwin may face criminal charges over RBS accountancy failings
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Sir Fred Goodwin may face criminal charges after the FSA’s report into the near collapse of Royal Bank of Scotland suggested that the bank’s directors broke UK accountancy laws.
Despite highlighting a number of failings in the report, FSA chairman Lord Turner said yesterday that there was not enough “sufficient evidence” to punish the RBS directors under the FSA’s rules. However, a breach of the UK Companies Act may allow Business Secretary Vince Cable the opportunity to press charges, according to reports.
The Companies Act says directors must be able to “disclose their company’s financial position with reasonable accuracy at any time. They must also ensure “adequate record is made and retained… of any expected loss, liability, contingency material to the assessment of the current position.”
On Monday, Cable said he was investigating whether any action can be taken against any Royal Bank of Scotland directors who were at the bank in the run up to its near collapse in 2008.
According to The Telegraph, The FSA’s report highlighted a number of failings which suggested RBS directors may have breached these rules.
The FSA report says the Review Team remained unclear about when a final capital position for end-Q1 2008 was settled by the firm.
It says: “The then RBS group finance director told the Review Team that balance sheet data were not available until three weeks after the month-end.”
“So, at best, compliance was only established on a retrospective basis. This undermined the ability of the firm to demonstrate compliance with regulatory … requirements. This was an especially serious failing for a firm which had chosen to operate with limited capital headroom, giving it a very low margin for error.”
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Readers' comments (10)
David Prior | 14 Dec 2011 9:45 am
Indeed - and what about all the people who heard "Fred the Shred" announce early in 2008 that the "Credit Crunch" would be likely to reduce profits from £10Bn to £8.5Bn, when within months they had a Rights Issue and were nationalised soon thereafter.
Many people bought shares at that time, in the understanding that any announcements he made to the Stock Exchange had to be truthful - therefore, he either lied or was massively incompetent.
It would be interesting to see his own share dealings around that time - was he bailing out of the shares as everyone else was buying into the Rights Issue?
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Peter Herd | 14 Dec 2011 10:01 am
Like Al Capone if you concentrate on the detail you will eventually get your man. After all Al Capone was convicted of tax evasion and not for being a gangster
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Anonymous | 14 Dec 2011 10:09 am
Don't be daft. He is not an IFA.
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Julian Stevens | 14 Dec 2011 10:14 am
"not sufficient evidence to punish the RBS directors under the FSA’s rules", eh?
You can bet your boots that, under FSA rules, there'd be sufficient evidence if Mr Goodwin had held a similar position with an IFA firm.
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Anonymous | 14 Dec 2011 10:28 am
Sounds as though the FSA is playing a game of catch up too! 4 and a half people to regulate RBS and Barclays over the relevant time frame?! Post event realisation / arse covering - you choose!
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Patrick Schan | 14 Dec 2011 10:39 am
This type of action, if if is taken (which I jave some doubts about) would send a much needed signal to people who abuse the great resonsibility they have.
As we know there is another body that should also be held accountable.
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Kevin Archer | 14 Dec 2011 11:11 am
Big Institutions are rarely stung by fines that financial dent them because the regulator is reliant on levy income to run its regulatory function from the very Institution it is supposed to be over-seeing.
Regulators should be centrally funded with a fixed budget and fixed terms of reference.
I would imagine that the FSA have been warned to go lightly on the banks anyway seeing they account for 15% of UK GDP and from the very soft treatment they get from the FSA i expect they were never properly regulated anyway.
Put a few IFA's who dont have any clout or representation out of business wont even be noticed in the unemployment figures, put a big bank out of business -Thats a different matter. MP's might not get paid Oh dear.
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Andy Campbell | 14 Dec 2011 11:44 am
Both the FSA and Sir Fred represent entities with a complete lack of integrity. FSA too busy with RDR and TCF to regulate the banks ????!!!! And Fred + the RBS board castnig aside due diligence !!!!!! there are no excuses really but I daresay Fred will continue to enjoy his reduced £300k+ p.a retirement awarded for services to the bank.
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Anonymous | 14 Dec 2011 12:31 pm
This is just hot air! No proceedings will ever be brought against ANY Banker.
They knew about Bankers shady and risky dealings for years at the FSA, but they did NOTHING and will continue to do so. They are all in this together, including ALL poli5ical parties as they depend on the Bankers for funds!!!
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Exasperated Me | 19 Jan 2012 5:36 pm
Goodwin face criminal charges? A likely story.
The one eyed Leviathan, too busy looking at the easy prey... and drooling. What a monster they created.
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