Former business secretary Sir Vince Cable has called for an investigation into allegations the Treasury may have “actively encouraged” the activities of RBS’s discredited global restructuring unit GRG.
The Liberal Democrat leader has today written to Nicky Morgan, chair of the Treasury Select Committee, to ask that it look into accusations that an executive branch of the Treasury, the Asset Protection Agency (APA), had significant operational control of the GRG, which has been accused of driving thousands of businesses into financial ruin.
In the letter, seen by City A.M., Cable wrote: “Your committee, under yourself and your predecessor, have done some impressive, forensic work on RBS and the role it played in the banking crisis.
“You will know that there is continuing concern about the role played by the GRG in seriously damaging many of RBS’ solvent business customers and the way the FCA [Financial Conduct Authority] has conducted its investigation into the matter.
“In the last few weeks evidence has emerged…that the body with responsibility within the Treasury for public sector assets (the Asset Protection Agency) may have actively encouraged GRG in its activities. It has also been suggested that the FCA current inquiry has been dilatory and ineffectual, and perhaps conflicted, in its investigation.”
He added: “I hope you will agree that the matter is sufficiently serious for your committee to probe the FCA and the Treasury further.”
The allegations regarding the extent of the Treasury’s role in the bank’s turnaround unit came to light during a court case between RBS and Manchester-based businessman Oliver Morley, who claims his business was placed under “economic duress” when its property arm, the West Register, acquired some of his assets in 2010. He is also seeking damages for “unjust enrichment”.
RBS said it “fundamentally disagrees with Morley’s claims and does not believe they have any merit”.
Cable’s calls for a committee probe come as another MP, Martin Whitfield, lodged a series of parliamentary questions asking for a legal agreement between RBS and the APA that defined their relationship to be made public in the wake of the accusations.
Later this month the FCA is due to release a report into why it was unable to enforce action against senior individuals within the GRG, much to the dismay of many MPs.
A spokesperson for Morgan declined to comment. The Treasury and RBS declined to comment. The FCA declined to comment.