RBS brings in lawyers to review treatment of ailing small firms
By Matt Scuffham
LONDON (Reuters) - Royal Bank of Scotland (RBS.L: Quote) has appointed law firm Clifford Chance to conduct an inquiry into the treatment received by small business customers in financial distress, responding to suggestions it closed down viable businesses too quickly.
The move comes after an independent report by former Bank of England deputy governor Andrew Large, which was commissioned by RBS, recommended the bank look into concerns over its treatment of struggling small businesses.
RBS has also been accused by government adviser Lawrence Tomlinson of pushing struggling small firms into its "turnaround" unit, so it can charge higher fees (on the basis they have defaulted) and take control of their assets.
"To ensure our customers can have full confidence in our commitment to them, I have asked Clifford Chance to conduct an inquiry into this matter, reporting back to me in the new year," RBS Chief Executive Ross McEwan said in a letter to Large on Monday.
Large told Reuters that Britain's financial regulator was almost certain to take action in relation to the accusations if they are found to be true, adding the bank had taken the findings of his report "very seriously".
"I merely looked at the assertions themselves which were clearly very serious. If they are found to be true it's almost certain the regulator will take quite an interest in it," he said.
Business Secretary Vince Cable demanded an urgent response from Britain's financial regulators and from RBS, 82 percent owned by taxpayers following a 45 billion pounds ($73 billion) government rescue during the 2008 financial crisis.
Asked on BBC radio if a criminal investigation should be launched he said: "That's for the regulators and the police to establish, whether there is a case. The authorities need to establish whether there is something worse than unethical behavior actually going on here". Continued...