A new company has been formed to fight for hundreds of small firms that passed through Royal Bank of Scotland’s controversial Global Restructuring Group (GRG) in the aftermath of the financial crash.
Edinburgh-based MBM Veritas claims the complaints process and £400 million compensation scheme unveiled by RBS and the Financial Conduct Authority (FCA) last month fails to fully tackle the treatment and financial losses of the businesses.
We have the capability and knowledge to help companies tackle RBSAndrew Mackenzie
MBM Veritas, a joint venture between specialist law firm MBM Commercial and Veritas Treasury, a financial advisory company for businesses, said it was concerned that the scheme excludes direct complaints from directors whose firms went under as part of their involvement with the now-disbanded GRG.
A spokesman said: “RBS have said it will automatically refund certain fees paid to SME customers, yet statistics show that many of the affected businesses have already been made insolvent. This may disqualify the individuals who owned these firms from claiming compensation.”
The bank has said even insolvent firms can make a claim, but that they have to go through an administrator or liquidator.
MBM Veritas also claims it is wrong that although the GRG complaints process will be independently overseen by retired High Court judge Sir William Blackburne there is no independent oversight of the compensation awards.
Former banker Scott Cowan, director of Veritas Treasury, said: “That is the biggest shortcoming in the scheme. In this case the biggest thing is the consequential losses (of firms’ involvement in GRG) and there is no independent oversight of it.”
The most serious allegation to be made against GRG is that it deliberately pushed small businesses into liquidation between 2008 and 2013 so that their assets could be acquired at knock-down prices.
An independent report commissioned by the financial regulator found recently that “RBS did not set out to artificially engineer a position to cause or facilitate the transfer of a customer to GRG”.
Andrew Mackenzie, a former banker who spent time working in the bank’s GRG unit and subsequently set up Veritas Treasury with Cowan, said: “Joining together with MBM Commercial means we have the capability and knowledge to help companies tackle RBS. This is vital for those seeking recompense.”
MBM Veritas is holding a seminar on the compensation scheme for Scottish firms affected by GRG at MBM Commercial’s offices at 125 Princes Street in Edinburgh at 8.30am on Thursday – the same day as a planned debate in the House of Commons on the workings of the controversial unit.
A spokesman said the new venture would be paid through a proportion of successful settled claims against RBS.