A report into claims Royal Bank of Scotland put viable businesses into default so it could make more profit has been passed to financial regulators by Business Secretary Vince Cable.
The report, to be published today, has been written by Lawrence Tomlinson, one of Cable’s key advisers.
The Sunday Times, which has seen the report, quotes it as saying: “The bank artificially distresses an otherwise viable business and through [its] actions puts [the business] on a journey towards administration, receivership and liquidation.”
Cable has asked the FCA and the Prudential Regulation Authority to review the evidence.
The allegations focus on a part of RBS called the Global Restructuring Group, which was set up to help struggling companies.
But firms have told Tomlinson GRG imposes fines, hikes interest rates and withdraws loans. They claim RBS’ property arm West Register then buys their properties at a fraction of their value.
Tomlinson told the BBC: “I feel really sick sometimes. It is really disturbing. It is ruining people’s businesses for sure, and in some cases having a huge impact on their personal lives too, even leading to family breakdown.”
Cable said: “Some of these allegations are very serious and I am waiting for an urgent response as to what actions have been taken.
“I am however confident the new management of RBS is aware of this history and is determined to turn RBS into a bank that will support the growth of small and medium sized businesses.”
In a statement, RBS said: “In the boom years leading up to the financial crisis, the over-heated property development market became a major threat to the UK economy.
“RBS did more than its fair share to fuel this and commercial property lending was one of the key drivers of our near collapse as valuations rapidly plummeted.
“Facing up to these mistakes has been a difficult, but essential part of making RBS a safe and strong bank once again. That has been one of GRG’s main tasks. GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives. Not all businesses that encounter serious financial trouble can be saved.”