ROYAL Bank of Scotland (RBS) chief executive Ross McEwan has been accused by MPs on the Treasury Select Committee of withholding information about an investigation into criminal activity within the bank. He had been giving evidence about the way the bank’s Global Restructuring Group (GRG) had treated small business companies (SMEs).
The session related to a leaked regulatory report that found an ‘intentional, co-ordinated strategy’ to put RBS’s interests ahead of customers. McEwan had told the committee in January that there was not any criminality inside the bank.
But in June, it was reported that Police Scotland was investigating allegations about a former employee, which MPs then asked him to clarify. McEwan said he had replied to the committee’s questions in ‘good faith’. But the MPs insist he has ‘withheld information of relevance and interest’.
At the end of July, it was announced by the regulator, the Financial Conduct Authority, that no action will be taken against Royal Bank of Scotland and its senior managers over the activities of its controversial Global Restructuring Group (GRG), the regulator has said.
The FCA said its powers were ‘very limited’ and that there were no ‘reasonable prospects of success’ when it came to action against senior managers.
A review into the GRG turnaround unit published earlier this year found it did mistreat thousands of small firms.
Some firms said they were pushed into bankruptcy and were stripped of their assets after they were transferred into the controversial division between 2008 and 2013.
GRG was marketed as an expert service that helped struggling small businesses; instead it bankrupted them.
Jonathan Reynolds MP, Shadow City Minister, commented, ‘Given how seriously the RBS-GRG scandal has damaged trust in banking, it is shocking that the CEO of RBS has chosen to conceal information like this from a select committee.
‘RBS should be doing everything it can to provide redress for customers whose lives have been devastated by the actions of GRG; instead it is choosing not to reveal key information.
‘This is why Labour has consistently called for a public, judge-led inquiry into GRG. An independent third party is the only way we can achieve proper transparency into the scandal and deliver justice for its victims. ‘Ten years on from the financial crisis, it is clear we still have a long way to go to rebuild trust in the sector.’