RBS Issues Apology for Incorrect Committee Evidence

RBS LogoThe Royal Bank of Scotland (RBS) has issued an apology for providing a parliamentary committee with incorrect evidence. The incident took place at a hearing in June, at which directors from the bank appeared in front of a Treasury Committee.

RBS directors were appearing in front of the committee to answer accusations that viable firms had been deliberately killed off by the bank’s Global Restructuring Group (GRG). GRG was responsible for handling loans made by RBS to companies that were viewed as potentially risky. It has been alleged that GRG deliberately forced some of those companies to close even though they were viable. Lawrence Tomlinson, who is advisor to Vince Cable, Business Secretary, said in a report that RBS therefore made money out of the financial problems of small and medium-sized businesses that may otherwise have been able to continue trading.

Some of the evidence that they gave, according Sir Phillip Hampton, RBS chairman, “lacked clarity.” This opinion was expressed in letters that have since been released.

Specifically, the committee had a number of concerns about whether GRG was being run as a profitable enterprise rather than simply a body handling a certain category of loan. Chris Sullivan and Derek Sach, both senior directors at RBS, gave evidence to suggest that this was not the case. However, Sir Phillip subsequently acknowledged in one letter to Andrew Tyrie, who chaired the committee, that GRG was indeed a source of profit for the bank.

Sir Phillip continued by saying that “this lack of clarity on an important point is very disappointing to the committee as it is to me, and I apologise.” He maintained, however, that this was an “honest mistake” on the part of Sullivan and Sach, rather than a deliberate attempt to deceive the committee.

Tyrie, in a statement that accompanied the release of the letters, acknowledged that “Anybody can make a simple mistake in their evidence.” However, he said that the inaccuracies in the evidence given by the RBS executives ” was more than that – it was materially incorrect on a crucial point and unacceptable.”

Tyrie also said that “Parliament expects witnesses to give straightforward evidence,” and that the two senior directors “fell short of this standard.”

RBS commissioned their own investigation into the issue by legal firm Clifford Chance. Earlier this year, the firm released a report saying they had found no evidence that GRG had intentionally caused any firm to cease trading.