A report has suggested that the Royal Bank of Scotland may have nudged viable businesses into administration by pushing them to default.
Written by one of Business Secretary Vince Cable's key advisers, Lawrence Tomlinson, the report claimed that the bank “artificially distresses an otherwise viable business and through [its] actions puts [the business] on a journey towards administration, receivership and liquidation”.
The Sunday Times saw the report, which focused its allegations on the Global Restructuring Group (GRG), a division of RBS set up to help struggling companies. Tomlinson claimed that firms told him GRG had imposed interest rate hikes, fines and loan withdrawals before RBS' property arm, West Register, moved in to buy their distressed properties at a fraction of their value.
The Business Secretary has dubbed the allegations “very serious”, adding that he is waiting to hear what actions will be taken from this point. Mr Cable continued: “I am however confident the new management of RBS is aware of this history and is determined to turn RBS into a bank that will support the growth of small and medium-sized businesses.”
RBS issued a statement on the matter: “In the boom years leading up to the financial crisis, the over-heated property development market became a major threat to the UK economy. RBS did more than its fair share to fuel this and commercial property lending was one of the key drivers of our near collapse as valuations rapidly plummeted.”
The bank added that GRG was established in order to help RBS face up to its earlier mistakes, claiming that the division “successfully turns around most of the businesses it works with”, but was not able to save “all businesses that encounter serious financial trouble”. 
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