RBS’s West Register property business is at the centre of allegations that the taxpayer-owned bank is killing off small businesses for its own gain.
The accusations are contained in a report by Lawrence Tomlinson, entrepreneur-in-residence at the Department for Business, Innovation and Skills. It has been referred to financial watchdogs by business secretary Vince Cable, according to The Sunday Times.
According to the newspaper, Tomlinson’s report claims: “RBS has forced vibrant businesses into financial trouble, only to profit from their distress by squeezing them for exorbitant fees and charges and ultimately seizing their assets to swell its own vast property empire.”
Tomlinson has also been given evidence by The Sunday Times that “RBS has pulled loans on businesses and swept their properties into its own land bank”.
Companies have told Tomlinson that the bank’s Global Restructuring Group “plunges viable firms into difficulties by imposing huge fines, driving up interest rates and withdrawing loans”.
Entrepreneurs claim they were forced out of business only to see RBS’s property division, West Register, buy their properties for knock-down prices.
According to The Sunday Times, Tomlinson reports: “From the cases I have heard, there is a clear risk of a perception arising that the intention is to purposefully distress a business to put them in GRG and subsequently take their assets for West Register.”
Edinburgh-based West Register is run by former Legal & General Property fund manager Helen Gordon, and former Savills chief executive Aubrey Adams is head of property in the bank’s Global Restructuring Group.
The report, which will be published today, has been referred to the Financial Conduct Authority and the Prudential Regulation Authority for assessment.
bridget.o’connell@estatesgazette.com
