RBS apologises for incorrect evidence

THE Royal Bank of Scotland has apologised for giving incorrect evidence to a parliamentary hearing.

The hearing was set up in response to an investigation into its lending practices by Yorkshire entrepreneur Lawrence Tomlinson of the LNT Group. His damning report claimed that RBS treated British businesses in an “unscrupulous” and “shocking” way. However, he never accused the bank of fraud.

Bank directors appeared before the Treasury Committee earlier this year to answer claims that RBS’s Global Restructuring Group (GRG), which specialises in handling loans which are viewed as being more risky, had deliberately killed off viable firms.

The BBC said newly released letters show that RBS chairman Sir Philip Hampton later said some of the evidence “lacked clarity” and reported that committee chairman Andrew Tyrie branded the evidence as “unacceptable”.

One issue of concern for the committee was whether GRG was itself being run to make a profit. But senior directors Derek Sach and Chris Sullivan gave evidence to the committee that suggested this was not the case, the BBC report added.

However, in his subsequent letter to Mr Tyrie, Sir Philip did accept that GRG was a profit centre, adding: “This lack of clarity on an important point is very disappointing to the committee as it is to me, and I apologise.” But he said the two executives had made an “honest mistake” when addressing the committee.

Lawrence Tomlinson, former Entrepreneur in Residence at the Department for Business, Innovation and Skills and author of the Tomlinson Report, has responded to this latest revelation.

“It’s extremely disappointing that once again RBS has not taken an open and honest approach to dealing with very serious allegations,” Tomlinson said.

“The misleading nature of the evidence provided by RBS executives Derek Sach and Chris Sullivan makes a mockery of both the Parliamentary process and of the SMEs who have suffered as a result of the banks’ actions. Once again, we are left to question whether this is incompetence on behalf of the bank or intentional distortion of the facts. Either way, when we have paid such a high price to save the bank, and to remunerate the highest quality staff, it is beyond unacceptable that this behaviour should continue. Mr Sullivan even reportedly received a £470,000 bonus shortly after his appearance in front of the Committee.

“The bank is still too big to fail and in turn, too big to control – it’s time for decisive action to create smaller, more manageable banks who have to compete for clients to stop the perverse incentives that have prevailed amongst the biggest banks.”

Close