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.