CoStar News examines RBS allegations

November 27, 2013 § Leave a comment

CoStar News first wrote about complains of RBS misdemeanours two years ago, when it looked at the cases of John Morris and Charters and Innes Bernsten and Chris Richardson of the Coniston Hotel.

Its coverage of the current scandal surrounding the Tomlinson Report has focused particularly on the role that the West Register has played in the allegations that the bank is facing, including quotes from an ex-RBS employee who has been whistleblowing on the bad practice of the GRG (Global Restructuring Group).

“Each month relationship managers would submit the figures for their customers to the credit team in the bank. Should anything flag, it would be passed to the ‘watch’ committee.
“For example if a business is not in breach of its banking agreements but is say 10% down on budgeted performance, they will keep their eye on it.
“They may decide to offer it to GRG, or order a check of the business’ LTV. If GRG want to take it, and see some value from the business for the bank, it would then be passed directly to GRG and the relationship manager would be prevented from contacting the business at all going forward.”

The latest update is that the Serious Fraud Office is considering a criminal investigation into the allegations, as reported on the front page of today’s Financial Times.

RBS fallout continues as Tomlinson Report is published

November 26, 2013 § Leave a comment

The Sunday Times’ explosive report on RBS’ “killing off small businesses” and the publication of the Tomlinson Report has led to a media frenzy, with every national newspaper and news broadcast covering it yesterday, and the fall out still happening today.

Telegraph

Estates Gazette

Daily Mail

In response to these allegations, RBS has issued a statement saying that “GRG successfully turns around most of the businesses it works with” and that “not all businesses that encounter serious financial trouble can be saved”. It justifies its actions by claiming that the West Register exists to sort out bad business, and has appointed law firm Clifford Chance to defend itself against the damming allegations coming its way.

The case of Charters contradicts these statements though, as its loan was not bad until RBS stepped in. The development was profitable and successful until the bank intervened. When RBS sold the development to its own vehicle, the West Register, it did so at half the price that developer John Morris had offered to buy it back for. Just two weeks before the developer was notified of the impending administration, the bank credit committee had unanimously past the last loan facility and commended the developers management for its impeccable running and management of the estate. Certainly runs at odds with RBS’ claim that the West Register steps in to rescue and help distressed businesses.

With other borrowers telling their stories, including that of the Coniston Hotel, which this blog has been looked at before, it looks like Clifford Chance will have its work cut out.

The full Tomlinson Report can be found at http://www.tomlinsonreport.com/.

The Sunday Times puts the West Register under scrutiny

November 25, 2013 § Leave a comment

The Sunday Times’ ‘Insight’ team has run an in-depth analysis of how RBS has been using the West Register to miss-sell a number of ‘distressed’ properties.

Looking at the story of Charters, the Coniston Hotel in Sittingbourne and many others, the piece is a must-read for those looking at the dodgy dealings of the West Register.

Read the full article here http://www.thesundaytimes.co.uk/sto/news/insight/article1344611.ece

Press scrutiny for the West Register

October 10, 2013 § 2 Comments

The West Register has received some unwelcome attention from the press over the last week, with both the Sunday Times and the Guardian running stories about RBS’ distressed property portfolio.  

The Sunday Times’ piece on 6th October blasted RBS with accusations of ‘blocking housebuilding’, as it hangs on to £1bn worth of property assets while the government is urging housebuilders to build more. Allegedly, RBS is planning to hold onto its assets until 2018 when their value will have risen dramatically, before selling them on.

The Guardian today takes a look at how RBS might be considering floating the portfolio on the stock market. Looking closely at how the company operates, it has compiled a compelling illustration showing the subsidiary’s various assets across the UK.

It looks at RBS’ assertion that the West Register ‘competes against outside investors to take control of troubled RBS assets and only acquires a property if it makes the winning bid’ which is highly dubious, and cities that it holds £3.2bn of assets – which is particularly interesting bearing in mind RBS has quoted this value at circa £500m in the past. RBS’ claim that the West Register ‘only ever bids after investors have no chance of recouping any return on the initial investment’ can also no doubt be refuted by many.

Both publications describe the West Register as a vehicle that is ‘little known’, so it will be interesting to see how this changes following the coverage that it is receiving at the moment.

Highland update: RBS trader caught lying

May 14, 2013 § Leave a comment

Following the last post on this blog about RBS being caught in a fraud dispute with Highland Capital, there is news this week of a trader at the taxpayer-owned bank being accused of “fraudulent inducement, fraud and unjust enrichment” in this case.

The Telegraph reports that former leveraged loan trader Sam Griffiths played a part in the bank’s ‘improper conduct’ and that he is currently suspended from his role.

RBS is currently facing scrutiny after it called in loans provided to Highland when the financial crisis hit. The dispute lies over how RBS valued the loans. Property Campaigns will be following this case with interest.

‘Lies’ of RBS land bank with £10m bill

May 7, 2013 § Leave a comment

The Saturday Times has reported that the Royal Bank of Scotland is facing a $100m fraud claim from American hedge fund Highland Capital.

The Court of Appeal has ruled that RBS lied to obtain a judgement in a debt dispute three years ago. Not only is RBS likely to have to pay up to £4m in legal costs, but Highland Capital is now free to pursue a $100m fraud claim against the bank.

The news is significant in that it shows that the UK taxpayer owned bank has used legal might to supress cases against it, and that it is prepared to lie in court. After endless specaulation on this case, the news may not be as surprising to some as it is to others.

The fraud allegation is looked at more closely on Ian Fraser’s website.

 

Articles of interest by Ian Fraser

November 6, 2012 § Leave a comment

A couple of interesting articles looking at RBS by journalist Ian Fraser.

Huffington Post http://www.huffingtonpost.co.uk/ian-fraser/rbs-fraud-accusations-of-systemic-i_b_1579968.html

Ianfraser.org http://www.ianfraser.org/has-rbs-become-a-rogue-institution/

For this appalling situation to change, all it would take would be one single corporate or commercial property customer to sue the bank, and a judge to rule that clause 13.2 is in breach of the Unfair Contract Terms Act 1977, the Unfair Terms in Consumer Contract Regulations 1999, Sale of Goods Act 1979 or other national or international statutes. A landmark legal victory along these lines could mean the game would be up for RBS and global restructuring group, opening the floodgates to litigation from tens of thousands of SMEs who believe they have been mistreated, cheated or tricked by the bank

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