Campaigners have blasted the City watchdog for refusing to release a full report on a toxic business rescue unit at Royal Bank of Scotland.
RBS’s global restructuring group was meant to save firms from collapse during the financial crisis.
But critics claim the Natwest owner instead sought to deliberately wreck small businesses and seize their assets to bolster its own ailing balance sheet.
The lender was bailed out with £46billion of taxpayers’ money in 2008.
RBS’s global restructuring group was meant to save firms from collapse during the financial crisis
The Financial Conduct Authority (FCA) commissioned a detailed report into the claims which found a series of errors and conflicts at the unit, but dismissed suggestions of a conspiracy.
Although a summary of these findings has been made public, the FCA is refusing to share an uncensored version which reveals if senior management was to blame.
It means the thousands of business owners whose companies went bust are still waiting to discover who knew what, and when.
Nikki Turner, a bank fraud victim who set up business support group SME Alliance to help others in difficulties, said the report was bound to make it into the public domain eventually.
She added that many business owners now believe the watchdog is in hock with big banks.
Mrs Turner said: ‘It’s a pointless exercise by the FCA not to put this out.
Nikki Turner, a bank fraud victim who set up business support group SME Alliance to help others in difficulties, said the report was bound to make it into the public domain eventually
‘The more fuss the regulator makes about not releasing the report, the more damage it will do when it eventually does come out – it means the speculation is worse than the real thing.
‘But with the FCA it’s a case of tail wagging dog most of the time, with the banks in charge of the process.’
A spokesman for the GRG Action Group, which represents more than 500 businesses, said: ‘This regulator cannot be trusted to safeguard the interests of the thousands of people who lost jobs, businesses and livelihoods because of RBS’s global restructuring group.
‘The FCA can no longer be considered an honest broker. It should step aside.
‘It needs to publish its report in full – so that the public, elected lawmakers and the courts, rather than a compromised regulator, can decide what to do about RBS.’
The report details findings by consultant Promontory Financial Group – known in industry jargon as a skilled person – which was asked by the regulator to probe what happened at RBS.
It began its investigation in 2014 but the report was not finished until earlier this year.
Suspicion of a cover-up was so great that MPs on the Treasury Select Committee hired an independent barrister to check that a public summary released last week was a fair reflection of the secret report.
The barrister concluded that the public version is not misleading – but that key details about what bosses knew have been left out.
He said these findings ‘relate to multiple significant issues’ and include a verdict on whether failures were part of ‘an intentional and coordinated strategy’ by managers to harm businesses.
The public version of the study contains a string of damning conclusions.
It found the turnaround unit failed to properly manage the conflict of interest between seeking to help struggling companies and needing to turn a profit for the bank.
A total of 92 per cent of viable businesses which ended up in the GRG were hit by ‘inappropriate action’.
At its peak, the unit handled 16,000 companies, meaning thousands of entrepreneurs and family owners will have been affected by these mistakes.
However, regulators said there was no systematic attempt to asset-strip businesses to boost RBS’s profits and that bankers did not act as shadow directors – finding no evidence to support the worst claims about the unit.
Their report makes no mention of any criminality.
Internal board minutes from the FCA show that the watchdog feared it could face legal action from senior managers if the full report was released.
Labour MP Wes Streeting, a member of the Treasury Select committee said the regulator had been cowed by the threat of legal action
Labour MP Wes Streeting, a member of the Treasury Select committee, said: ‘The assurances we received from our independent QC satisfied the committee, but it hasn’t fully satisfied so many of the people who were victims of this scandal.
‘What many people feel is that the regulator has been somehow cowed by the threat of legal action.
‘What the public wants is to be assured that the regulator has acted with full use of its powers.’
The FCA has insisted that it is not able to release the full report because of commercial confidentiality, and because it would have to give every manager implicated a full legal right of reply – an expensive and lengthy process.
It is still carrying out investigation which could lead to fines and bans for some of those involved.
Their names would be made public at this point.
An FCA spokesman said: ‘The FCA’s decision not to publish the skilled person’s report is consistent with our standard practice.
‘Publication of a skilled person’s report by the FCA would only be possible with the consent of institutions and individuals covered by the report.
‘We have not sought consent from the individuals or groups of individuals who are identified in the Skilled Person’s Report as that would necessitate consulting each individual and considering any comments they made on the text that affected them.
‘Our experience of previous reviews carried out by the regulators is that that would be a complex and lengthy process and, where consents were not forthcoming, would likely result in only a heavily redacted version of the skilled persons’ report being publishable.’
RBS declined to comment.