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Treasury links to scandal-hit RBS group under scrutiny in court documents

Court documents have alleged that Royal Bank of Scotland’s restructuring division had a “pervasive” influence exerted over it by the Treasury amid its mistreatement of thousands of small business customers.

The Times reports claims made by RBS executives in court papers that the Global Restructuring Group had been pressured by the government to acquire customers’ assets through the under-fire turnaround unit.

RBS has been embroiled in a legal battle with property developer Oliver Morley over claims it pushed him to sell some of his assets to the bank’s property division, West Register, nine years ago, and the claims against the Treasury appear in those court papers.

The Asset Protection Agency, a now wound-down division of the Treasury, insured RBS’ toxic loans, but Morley’s lawyers are questioning its role in the GRG scandal after the FCA found in a recent review that the unit had caused “material financial distress” through a focus on making money from the small and medium-sized companies it was meant to help out of their troubles.

An internal RBS memo disclosed in the court proceedings and quoted by the Times reads: ”

“Overall the direct and indirect impact of APS is pervasive across the group and cannot be underestimated.”

“[There is a common theme [of APS] wanting us to use West Register to acquire property assets and by using their power to decline release of security forcing GRG down that route”.

Other allegations include the government wanting RBS to reduce the financial burden on the Treasury by selling off distressed assets when possible.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 9th July 2019 at 12:18 pm

    No wonder Andrew Bailey was reluctant to comply with the TSC’s demands for the FCA to release a full and unredacted version of its report into RBS, and prevaricated to such an extent that Nicky Morgan had to threaten him with official proceedings for contempt of Parliament. Phew ~ what’s that overpowering stench?

  2. dennis grainger 9th July 2019 at 8:59 pm

    Can you please say why my earlier post (3 hours ago) has not reached publication?
    Thank you
    Dennis Grainger

  3. dennis grainger 10th July 2019 at 7:56 am

    Presumably this is the same sort of Treasury influence that led to the government seizing of Northern Rock – a solvent company with a cash flow problem being assisted by LOLR loans from the Bank of England – using dubious legislation introducing a completely new type of insolvency…..“effective insolvency”.

    The same Treasury which has announced that – after all loans, fees and penal interest charges have been repaid – the Rock dealings will leave the Treasury nearly £9 Billion in profit, and they have told me that all that windfall will be kept to offset the huge losses made by the taxpayer in the real bad banks.

    150,000 small shareholders got not a penny compensation via this theft by government. The company was rubbished and the public were duped.
    Disgusting treatment and
    manipulation.

    Surely these murky dealings should be examined in depth by an enquiry or a TSC review?

    Dennis Grainger

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