The Financial Conduct Authority (FCA) has rejected calls to publish its leaked report into allegations the Royal Bank of Scotland (RBS) pushed small businesses into disrepair for financial gain, increasing pressure from MPs and lobby groups.
The RBS 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, with the intention of purchasing their company premises.
After a draft of the report was recently leaked to the BBC, Conservative Party MP, and head of the Treasury select committee, Nicky Morgan, wrote to FCA chief executive Andrew Bailey to express concerns over the city watchdog’s control over the matter and claimed it had a responsibility to publish the report in full.
The leaked report claimed over nine in ten of all businesses working with the GRG experienced “inappropriate action”, such as interest rates being raised and dubious fees.
Bailey maintained an early release of the report would not “best serve” public interest, stating the FCA would publish it on its own terms once it decides whether a formal investigation into RBS is necessary.
Morgan has now responded to Bailey to express the committee’s outrage at the decision, and claimed the FCA had a responsibility to act in the public interest with the report now “in the hands of a number of third parties”.
“We consider that the public interest in publication in this specific case is overwhelming,” she added.
Morgan said the report’s delay had increased confusion over the behavior of the GRG, while the committee had been “overwhelmed by messages from those who consider that their businesses and livelihoods were destroyed by RBS”.
“Those affected have a right to know what really happened.”
The Federation of Small Businesses (FSB) has continued to add pressure on the FCA for the report’s publication. National chairman Mike Cherry has criticised its resistance to MPs demands as an avoidance of its duties.
“The cold hard fact is that the FCA set up its GRG review three and a half years ago,” Cherry said in a statement.
“It is certainly not in the public interest for the regulator to investigate but not publish the results. It should also publish recommendations on how to avoid this happening again.”
He added: “More than a decade on from the launch of GRG, the entrepreneurs who had their livelihoods taken away deserve not only the truth, but an apology. For many, the FCA’s findings could be the evidence they need to secure the compensation they’re due.”
Over 500 business owners seeking damages from RBS are being represented by the RBS-GRG Business Action Group, which has repeated its calls for Bailey to resign.
A RBS-GRG Business Action Group spokesperson said the FCA’s decision to withhold the full report was “shocking and unconscionable”.
“The activities of RBS’s GRG and its rogue bankers did immense harm to the British economy. Even RBS itself has admitted that serious mistakes were made.
“Thousands of people who livelihoods, jobs and businesses were destroyed by RBS desperately want this report published.”
The GRG was eventually closed in 2013, and in November 2016 RBS confirmed it would deliver a compensation package worth £400m to affected small business owners.
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