SME Alliance to lead fraud investigation into RBS’ GRG arm

29 August 2018

​SME Alliance to lead fraud investigation into RBS’ GRG arm

SME Alliance, which supports business people in their disputes with banks, is to write a report into alleged fraud at RBS’ controversial GRG unit, and related operations, which it will deliver to the Financial Conduct Authority.

The report will draw on evidence from scores of SME Alliance members whose businesses have been adversely impacted by the bank, with many forced under. It is being pulled together by directors of SME Alliance supported by Abhishek Sachdev of Vedanta Hedging, which has advised a number of businesses with successful claims against banks, and a leading QC.

One of the aims of the report is to produce evidence of “dishonesty and lack of integrity” by RBS executives that would enable the FCA to launch disciplinary action through the senior managers’ regime and to also look at more junior executives. In July the regulator announced that it was unable to do anything to punish the guilty bankers.

At the time Andrew Bailey, the FCA’s chief executive, said: “The fact that we can’t take action in no way condones the behaviour of RBS. We expect high standards from the firms we regulate and RBS fell well short in its treatment of GRG customers.”

This was despite the FCA’s own internal report into RBS GRG which showed that thousands of businesses forced into the unit were adversely impacted by the actions of the bank.

The RBS investigation will follow the model of a similar report collated by Nikki Turner, director of SME Alliance, and her husband Paul detailing fraud at HBOS Reading, which was delivered to the then regulator, the Financial Services Authority, in 2009. This formed the basis for much of the evidence in the criminal trial that led to two former HBOS bankers and four others sentenced to jail for 47 years, and forced HBOS owner Lloyds Banking Group to start a compensation programme for HBOS Reading victims.

Said Nikki Turner: “Our members are extremely frustrated that the regulators are unable to take any action against RBS and its bankers. The FCA say it cannot find any way to take action – we aim to help them ensure that the guilty bankers are brought to book.”

SME Alliance was formed in September 2014 to support SMEs “battling against fraud, corruption and misconduct in the financial sector” and to lobby for the fair treatment of businesses by their banks and advisors.

For further information contact Jason Nisse on 07769 688618 [email protected]