RBS and GRG in the BBC news again.

Shock horror! Apparently, according to the BBC, RBS admit they lied about GRG.

I lied admitted RBS boss Ross McEwan to the Treasury Select Committee on Tuesday of this week the report claims. His statement in 2014 that GRG had helped most of its business customers was apparently wrong. Not just a little wrong but horribly wrong. It follows the leaking of the FCA report on GRG to the BBC which contradicted his original claim

http://www.bbc.co.uk/news/business-42877472.

According to the leaked FCA report 86% of GRG customers suffered “inappropriate treatment”, a euphemism for aggressive fee charging and punitive interest rates heaping excessive costs onto businesses struggling with the post- Lehman financial crisis and precipitating unnecessary insolvency. Only 10% returned to normal banking following turnaround. The report which until now had not been published in full despite much political clamour, will it seems now be published as RBS is removing its objections, although other parties may still drag heels. Understandable from RBS as the report is now public knowledge and the wild horses have long since bolted the stable. It will be interesting reading to turnaround professionals. No doubt a copy is in the hands of the RBS GRG Action Group and will feature in their claims against the bank and its directors. The cost to RBS, its directors and its shareholders of malpractice and lack of training and supervision of staff far outweighs any ill-gotten past recoveries.

Previously the FCA had published a limited summary of findings. Prominent among these was a statement that the over 1000 employees of GRG had not been trained in turnaround techniques nor had an adequate understanding of turnaround. Too quickly they engaged with aggressive insolvency practitioners who turned a blind eye to the excesses and cooperated with RBS to destroy often viable businesses at the cost of employees, unsecured creditors and business owners, not to mention “UK Plc”. Politicians must also ask themselves how legislation that they bear the responsibility for weighs too heavily in the creditors’ favour and facilitates such malpractice. Whilst we at BM&T find it quite astonishing for a bank workout group to be so ignorant of turnaround and too quick on the insolvency trigger we do see a market opportunity for our new book on Turnaround management due for publication later this year;

http://www.globelawandbusiness.com/books/turnaround-management-unlocking-and-preserving-value-in-distressed-businesses.

Maybe we will get a bulk order from RBS. It should be a wise investment.

 

Alan Tilley – Chairman, BM&T
1st February 2018