A SUPPORT group for business people in dispute with their banks has said there is “light at the end of the tunnel” for those affected by their treatment at the hands of RBS’s controversial restructuring arm the global restructuring group (GRG).
And SME Alliance said if it was proven that the Government had “strategic control” of the now-defunct unit through its Asset Protection Agency (APA), it should compensate businesses that were ruined. Director Nikki Turner’s remarks came after court papers indicated that the government, through the APA, had “day-to-day” involvement and “strategic control” of the GRG – allegations, which date back to 2009, just after the financial crash.
READ MORE: How a crisis brought the Global Restructuring Group into public eye
“SME Alliance was formed specifically because the abuse of SMEs by the financial sector was so blatantly obvious and so blatantly ignored by those who should have supported the sector,” said Turner.
“We’ve spent years looking at the conduct of banks and their associates and only now are we beginning to see some light at the end of the tunnel.
“It is devastating therefore – although not entirely surprising – to think the root of our problems lay with the Treasury back in the days of the so called ‘credit crunch’ and continued after the election under [David] Cameron.
“If these allegations are proven this will be yet another reason why those responsible for destroying so many SMEs must be held to account, and that includes the Government, which should compensate victims of GRG.”
Whistleblower Neil Mitchell, who first raised allegations against the GRG in 2010 and now runs a platform to handle claims against financial institutions, told The National there was only one solution: “We need a public inquiry. The All-Party Parliamentary Group on Fair Business Banking (APPG-FBB) and the Financial Conduct Authority (FCA) have done nothing on this since it was first uncovered in early 2015.”
The APA was a Treasury “arm’s length” agency to manage the Asset Protection Scheme (APS), part of the Government’s bailout of RBS, in which taxpayers insured against default £282 billion of loans, which limited its exposure to potential losses.
PPG chair, Kevin Hollinrake, said there were serious questions about the relationship between the Government and the banks during and after the financial crisis.
“This would be a flagrant breach of the purported arm’s length relationship between the Treasury and the Royal Bank of Scotland,” he said. These allegations must be robustly investigated and anyone found guilty of wrongdoing should be held to account ... If there is any substance to these claims it will only add to the calls for a full public inquiry into this and other UK banking scandals.”
A Treasury spokesperson said: “No claim has been brought against HM Treasury. This court case is between the claimant ... and RBS.”
A bank spokesperson added: “The FCA has confirmed its independent review found no evidence that RBS artificially distressed and transferred otherwise viable SME businesses to GRG to profit from their restructuring or insolvency.”
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