The U.K. Serious Fraud Office is reviewing allegations that Royal Bank of Scotland Group Plc pushed companies that owed it money into difficulties to boost profit following a report earlier this week.
The SFO has interviewed people connected to U.K. businesses affected by RBS’s loans in recent weeks, according to a person with knowledge of the case, who asked not to be identified because the review is private. It hasn’t yet contacted the Edinburgh-based bank, the person said.
“We are aware of the issue and we are monitoring developments,” the SFO, based in London, said in an e-mailed statement.
A report by Lawrence Tomlinson, chairman and founder of LNT Group Ltd., published on Nov. 25 said that once companies were in default, RBS could charge them advisory fees and buy their assets at reduced prices. Sarah Binnie, a spokeswoman for RBS, declined to comment. The Financial Times reported the SFO review earlier.
The bank has appointed London-based law firm Clifford Chance LLP to investigate the allegations. Business Secretary Vince Cable has referred RBS to the U.K. markets regulator, the Financial Conduct Authority.
U.K. banks, including 81 percent taxpayer-owned RBS, have been criticized by the government for holding back lending to businesses since the 2008 financial crisis as they boost capital reserves and clean up their balance sheets.
Clive Zietman, a London-based plaintiffs lawyer at Stewarts Law LLP, said his firm is “investigating a host of matters of a similar kind both against RBS and other major retail banks.”
“This scandal, assuming it blows up into yet another banking scandal adding to Libor, PPI mis-selling and FX, will make it much more difficult for the government to privatize RBS,” he said, referring to payment-protection insurance sales and probes into currency trading.