Stop delaying report on RBS malpractice, Tyrie tells regulator
The Financial Conduct Authority has been told to say when it will publish its delayed report into the abuse of distressed companies by the Royal Bank of Scotland.
Andrew Tyrie, chairman of the Treasury select committee, has stepped up the pressure on the City watchdog after the leak of documents detailing the practices employed by the lender’s turnaround division.
Last week Mr Tyrie described details published by Buzzfeed, a news website, and the BBC, including that RBS sought to take “upsides” from customers ranging from fees to equity stakes, as a “shocking story”. Yesterday he asked for reassurance from the FCA that victims would not have to wait much longer for the report.
“RBS have said they will consider the question of redress after publication of the FCA’s report,” Mr Tyrie said. “The delay in publication means that many businesses will not know where they stand.”
He has written to Andrew Bailey, chief executive of the FCA, asking for an update on the investigation. “I have asked Mr Bailey when he intends to publish the report,” Mr Tyrie said. “It is likely that this will be raised when the committee sees him before the end of the year.”
RBS has faced allegations over its turnaround unit ever since claims were made in a report published in November 2013 by Lawrence Tomlinson, an entrepreneur and adviser to the business department. He claimed that the division had put companies out of business to increase the bank’s own profits.
A report by Clifford Chance, the law firm, largely exonerated RBS when it was published in April 2014, but the work was regarded by many as a whitewash. In January 2014, the FCA commissioned an independent report into the allegations, but nearly three years later this has yet to see the light of day. The FCA had expected to publish before the end of last year, but it delayed the report’s release.
This month’s revelations again put pressure on the FCA and RBS to bring the saga to an end. Among the documents to have been published so are internal memos and emails that show senior staff at the bank discussing a “dash for cash” and receiving regular updates on “success stories” that highlighted how fees were extracted from struggling small business customers.
Documents also appear to show how RBS apparently ignored concerns raised by auditors about the risk that the “valuation of properties might be manipulated as valuation is performed internally”. Auditors also warned that the lender would “override or ignore third-party information (such as thirdparty valuations)” to obtain the valuations it wanted.
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