OWNERS of small and medium-sized businesses (SMEs) whose companies were “destroyed” after being placed in a controversial restructuring division operated by Royal Bank of Scotland (RBS) have called for the resignation of the head of the City watchdog, the Financial Conduct Authority (FCA).
The bank’s Global Restructuring Group (GRG) operated between 2005 and 2013 and was set up to help struggling SMEs turn their fortunes around.
However, it has faced repeated allegations – all of which RBS has denied – that it forced many of them into deeper financial distress, and seized assets at allegedly knock-down prices to benefit the bank.
The FCA has faced calls to publish its report into the GRG more than three years after it was commissioned and following its leak to the BBC.
Claimants involved with the RBS-GRG Business Action Group – which represents more than 500 individuals and businesses – said the leak also revealed that FCA assurances given last year concerning the contents of the report were “misleading in the extreme”.
They have called for FCA chief Andrew Bailey to quit and for him to be replaced by an official “better placed to secure justice for the victims of RBS”.
Their call follows a call from Nicky Morgan, chair of the Treasury Select Committee, for Bailey to publish the full report.
The action group said it believed the FCA under Bailey had “unjustifiably withheld its report” into what went on within the GRG at the time of the financial crisis.
Last month, in its report on the leak, the BBC said only one in 10 companies put into the GRG ever returned to the main bank, and that 92 per cent of viable companies in it were subject to “inappropriate actions” by RBS.
It added that the full report called for a fundamental review of how RBS handled its SME customers. The FCA summary of the report published last November claimed that examples of poor practice were “isolated”.
Now, the RBS-GRG Business Action Group said it was demanding answers as to why the FCA had kept the report “shrouded in secrecy by repeatedly delaying its publication”.
John Bamford, a spokesman for the group, said: “The business community relies on the FCA to safeguard its interests and take decisive action against financial institutions when there has been malpractice.
“The evidence against RBS is widespread and irrefutable, yet the financial regulator has dithered and delayed, denying justice to those affected.
“Justice delayed is justice denied and the drip feeding of snippets from the report only adds to the anguish and torment of the individuals and families who have been devastated by the actions of GRG.
“Full transparency and disclosure are what is needed so that the RBS GRG scandal is aired in public with victims having access to the true story of what went on.
“There can be no excuse for the FCA’s repeated stalling. In this case, the buck stops with Andrew Bailey, who gave misleading assurances to the public about the contents of the report in November last year. His position as chief executive is surely now untenable and he must resign.”
The FCA would not comment on the group’s resignation call.
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