February 5, 2015 § Leave a comment
An article has come out in Real Estate Capital about John Morris, the developer of luxury scheme Charters in Sunningdale, suing RBS for an alleged breach of loan agreement.
Two special-purpose vehicles set up by Morris, Charters Development (CDL) and Castleleigh Holdings, were placed in administration by RBS in May 2009. The administrators sold Charters to RBS’s property subsidiary, West Register, at the knock down price of £15.8m. RBS is understood to still own Charters.
The West Register is part of the bank’s controversial Global Restructuring Group (GRG). The GRG has been the subject of intense scrutiny as it has been said to been profiting from the financial distress of companies it was meant to help.
Morris lodged his High Court writ in December, seeking damages of more than £11m, representing the profit he claims CDL would have made on Charters but for RBS’s alleged breach.”
Morris says he has spent “the thick end of £1m” in legal fees to get to the pint of serving the writ, but has no intention of backing down. He adds: “I’ve been dealing with this bank for 40 years, with ups and downs. I’ve never sued my bank before but what they did was patently wrong.”
Click on the link below to read the full article
January 7, 2015 § Leave a comment
Chris Sullivan, the deputy CEO at Royal Bank of Scotland has left the bank earlier than expected and a month after apologising to MPs for giving incorrect evidence relating to RBS’s controversial Global Restructuring Group, the GRG.
The news has been picked up in all major publications:
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.
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.
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/.
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
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.
December 20, 2011 § Leave a comment
A hotel due to open in Sittingbourne in June last year had its funding withdrawn by NatWest just nine days before it was due to open. With a borrowing limit of £5million, the lender, part of the Royal Bank of Scotland, withdrew funding when only £3,875,000 had been withdrawn. Earlier this year, the administrators decided to sell the property into RBS’ distressed loan portfolio the West Register. Once again RBS has refused to comment.