The Treasury select committee of MPs has demanded the Financial Conduct Authority (FCA) publishes its report on the Royal Bank of Scotland’s (RBS) business restructuring scandal, after a copy was leaked to the press.
The report, completed at the end of 2016, is set to shed light on the bank’s practices through its Global Restructuring Group (GRG), after claims arose in 2014 that the GRG deliberately pushed small businesses to the brink of financial collapse.
The GRG was set up to help restructure struggling firms, but an early report accused RBS of offering poor advice to founders with the intention of purchasing their company premises for financial gain.
The unit was eventually closed in 2013, and in November 2016 RBS confirmed it would deliver a compensation package worth £400m to affected small business owners.
In a letter to FCA chief executive Andrew Baily, Conservative Party MP and committee chair, Nicky Morgan, demanded the report’s publication after a copy was leaked to the BBC last week.
“The FCA told the committee in November 2016 that a full account of the findings from the skilled persons’ report would be published. Nearly a year later, and nearly four years since the report was commissioned, we are still waiting for answers,” Morgan wrote.
The leaked report claimed “inappropriate action” – such as interest rates being raised and dubious fees – was encountered by 92 per cent of all businesses working with the GRG.
Morgan expressed his doubt over the FCA’s control over the matter, and claimed “the balance has tipped firmly in favour of full publication”.
Responding to Morgan’s letter, Mike Cherry, national chairman of the Federation of Small Businesses (FSB) welcomed the growing pressure on the FCA to publish its findings.
“It’s encouraging to see a powerful cross-party committee intervene on this issue,” Cherry said in a statement.
“The 12,000 small firms that were referred to GRG have been waiting almost four years for the FCA to publish its findings. The regulator’s report will be vital to helping business owners secure the compensation they’re due.
“It’s hard to put a price on the damage that GRG has done to the wellbeing of our small business community. More than a decade on from its launch, those who had their livelihoods destroyed by GRG deserve not only the truth, but an apology.”
The FCA has stated it will respond to Morgan’s request.
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