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MP Refers RBS To Serious Fraud Office Over "Dash For Cash" Scandal

Exclusive: MP John Mann has asked the Serious Fraud Office to open an “urgent investigation” into the “outrageous” conduct revealed in the RBS Files.

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Ross McEwan, chief executive of RBS
Peter Macdiarmid / Getty Images

Ross McEwan, chief executive of RBS

The Labour MP John Mann has called on the Serious Fraud Office (SFO) to open “an urgent investigation” into Royal Bank of Scotland after leaked documents revealed it deliberately crushed thousands of businesses for profit during the financial crisis.

An investigation by BuzzFeed News and BBC Newsnight revealed on Monday that the taxpayer-owned bank ran down businesses in its restructuring unit, Global Restructuring Group (GRG), as part of a premeditated strategy to cut lending and bolster profits.

In a letter to the SFO seen by BuzzFeed News, Mann said the evidence in thousands of leaked files from inside the bank “raises the distinct possibility that its practices have passed from bad practice to malpractice”. He went on: “It is therefore imperative that the Serious Fraud Office opens an urgent investigation to ascertain whether the threshold of criminality has been breached by RBS’ outrageous behaviour towards small businesses."

The SFO confirmed it had received the letter and was “monitoring developments”. A spokesman said: "If the Director considers there are reasonable grounds to suspect serious or complex fraud which meets his criteria he will open a criminal investigation".

RBS has repeatedly denied allegations that it destroyed healthy businesses for profit – first raised in a damning report on its treatment of small- and medium-sized enterprises (SMEs) by the government adviser Lawrence Tomlinson three years ago. When confronted with the leaked evidence obtained by BuzzFeed News last week, the bank made its first major admission: “In the aftermath of the financial crisis we did not always meet our own high standards and let some of our SME customers down.” But it continued to deny that it had “targeted businesses to transfer them to GRG or drove them to insolvency”.

The RBS Files reveal for the first time that, under pressure from the government after receiving the biggest banking bailout in history, the bank’s restructuring unit ran down businesses it wanted to exit draining them of cash and stripping their assets to maximise revenues.

The FCA is now facing mounting calls to conclude a long-delayed inquiry into the allegations and take action. Jonathon Reynolds, Labour’s shadow city minister, said yesterday: “The Financial Conduct Authority’s investigation should be published as soon as possible and, if laws have been broken, individuals must be held responsible. Britain’s small businesses should never again be treated as cash cows by a bank.”

Andrew Tyrie, chairman of the Treasury committee, told City AM: “The leaks today illustrate the need for the FCA to get on with publication as soon as possible," and said he would be writing to the regulator to demand a firm publication date. “On the basis of what has come out so far, this appears to be a shocking story, with many businesses at the wrong end of it,” he said. “The longer the delay in publication, the longer that many small firms may have to wait to receive any compensation.”

Mann, who sits on the Treasury select committee, also called for RBS bosses Derek Sach and Chris Sullivan to be recalled to explain why they said 27 times that GRG did not seek profit in evidence to MPs in 2014. The bank’s chairman, Sir Philip Hampton, later had to write to the committee to withdraw the executives’ repeated assertion that GRG was “absolutely not a profit centre”, claiming they had made “an honest mistake”.

The RBS Files reveal that Sach, who told MPs that GRG “does not contribute to the bank’s profits at all”, was responsible for signing off internal documents that described GRG as “a major contributor to the Group’s bottom line”.

Mann said: “This is the biggest single scandal since the 2008 crisis. RBS executives will have to be called back to the committee to account for themselves and heads will have to roll.”

The Liberal Democrats joined calls for RBS chiefs to be “hauled over the coals” at parliament to explain why they denied the allegations in front of a Westminster committee in 2014, and to begin the process of compensating those whose livelihoods were destroyed.

The Lib Dem’s economic spokesperson, Susan Kramer, said: “These damning revelations confirm what we already suspected; that RBS intentionally drove small businesses into bankruptcy.”

In a statement, RBS said it had lost £2 billion on its loans to small and medium-sized businesses during the financial crisis. It said RBS did not make an overall profit from GRG’s activities – the restructuring unit’s revenues did not exceed the losses the entire bank suffered on business loans gone bad after the crash. But its statement acknowledged, for the first time, that “a number of our customers did not receive the level of service they should have done” in GRG.

“We could have managed the transition to GRG better and we could have better explained to customers any changes to the prices or fees we were charging,” its statement said. “We also did not always handle customer complaints well. As a result, a number of our customers did not receive the level of service they should have done or, importantly, that they would receive now.”

But RBS still insisted “GRG’s role was to protect the bank’s position, where possible by working with distressed businesses to return them to financial health”, and said it had seen “nothing to support the allegations that the bank artificially distressed otherwise viable SME businesses or deliberately caused them to fail”.

The Dash For Cash: Leaked Files Reveal RBS Systematically Crushed British Businesses For Profit

Richard Holmes is an investigations reporter for BuzzFeed News and is based in London.

Contact Richard Holmes at

Tom Warren is an investigations correspondent for BuzzFeed News and is based in London.

Contact Tom Warren at

Jane Bradley is an investigations correspondent for BuzzFeed News and is based in London.

Contact Jane Bradley at

Heidi Blake is the UK investigations editor for BuzzFeed News and is based in London.

Contact Heidi Blake at

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