The Royal Bank of Scotland (RBS) is being investigated by the Serious Fraud Office (SFO), after some business owners alleged the bank deliberately asset stripped their companies, selling off assets to companies linked to the bank at favourable prices.
It is alleged RBS deliberately engineered defaults on the accounts of struggling companies and then moved them to the bank’s Global Reconstruction Group, where high fees and interest rates were imposed before company assets were seized and sold for below market prices.
It is also alleged that companies who benefited from the asset stripping process were either directly or indirectly linked to RBS in a deliberate policy of
asset stripping small companies for profit, sending some small business owners into bankruptcy so that the bank could profit.
A second inquiry into potential wrongdoing at RBS will also be conducted by the City of London Police.
One of the victims of the bank’s alleged wrongdoing approached the police with a file of information relating to how he claimed his own company had been asset-stripped.
The chief executive of RBS, Ross McEwen, has made a pledge to investigate “fully” the allegations of wrongdoing at the bank. He has offered to share the findings of an internal review with the two inquiries, as well as the Financial Conduct Authority (FCA).
RBS received a government bailout of £46 billion of taxpayers’ money during the credit crunch which followed the 2008 banking crisis.
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