The Treasury agency played a role in the controversial RBS GRG unit

Evidence has emerged of the role of a government agency in the controversial Global Restructuring Group (GRG) of the Royal Bank of Scotland (RBS).

The BBC learned that the Asset Protection Agency had influenced GRG's strategy, including making decisions that determined the fate of its business customers.

Separate court evidence indicates that the agency asked RBS to withdraw customer support, while the bank did not want it.

RBS said that he did not agree with the claims while the Treasury declined to comment.

More than 16,000 small business customers have been transferred to RBS's global restructuring group. In what MPs have called the worst scandal since the financial crash, GRG has been found in an official report revealing that the Financial Conduct Authority has mistreated thousands of business customers. Many of them have been ruined and others have lost not only their livelihood, but also their marriage and their physical and mental health.

Oliver Morley Estates, an industrial warehousing company based in northwestern England and suing RBS, has suggested to those in charge of relations with GRG to reject a proposal for refinancing a large corporation. part of the business because of the view of the Asset Protection Agency (APA).

E-mails from the courts reveal that RBS wanted to support the bailout proposal, which founder Oliver Morley had arranged to refinance more than 70 million pounds of loans to his real estate group with the help of another bank , believing that it was "the best option for the market". bank".

However, the Treasury's Asset Protection Agency prevented the bank from doing so, according to evidence disclosed to the court. Instead, he wanted the property to be sold to the property division of RBS, West Register.

& # 39; Craziest decision to date & # 39;

The court heard RBS officials consider the APA view as "certainly the craziest decision to date". However, RBS staff felt that "the views of the APA are clear and that it is unlikely that they will change".

As part of the badet protection program, which is part of the government bailout in the context of the financial crisis, loans worth £ 282 billion were secured against taxpayers' default. , thus limiting the potential losses to which RBS was exposed.

Between 2009 and 2012, the staff of the Asset Protection Agency was responsible for overseeing the program. Its stated purpose was "to maximize the value of the badets of the system and reduce the likelihood of payments".

Hugh Sims QC, for GRG's former client, Oliver Morley, told the High Court that internal bank e-mails disclosed in a civil proceeding also indicated that within GRG "things had become more and more personal".

In an internal mail exchange regarding Mr. Morley's attempts to keep his business, GRG staff said that "the borrower is toasting". In another, they look forward to "the Morley mbadacre" the following Tuesday.

In another e-mail dealing with their proposal to force him to sell his property to the property division of the banks, the GRG staff said that he did not share that opinion, "it's his head on a peak, "said the court.

RBS said that he "fundamentally disagreed with Mr. Morley's claims and did not think they had any merit".

"She is vigorously challenging them in court, and the bank has suffered about £ 30m in losses out of £ 75m that she has lent to Mr Morley, a sophisticated client with a lot of professional advice."

"The language used in internal communications of 2009 was clearly unacceptable and would no longer have a place in the bank we are in. These communications did not reflect or hurt customers."

Influence of APA

Regardless of the audience, the magnitude of the Treasury's influence is underscored by previously ignored documents from the Asset Protection Agency (APA), which show that GRG's strategy and approach to lending loans customers were influenced by it.

Official APA documents discovered from public sources also suggest that it was forbidden for the bank to release GRG clients of secured loans without its approval, thus giving the Treasury an effective veto right over any refinancing by commercial clients wishing to leave GRG.

While GRG informed customers of their presence to help reverse the situation of their company, the report, disclosed to the BBC in 2017, revealed that the bank was seeking to profit from companies in difficulty and had systematically broken the rules for the fair treatment of customers.

The BBC's research adds to the unseen comments of GRG boss Derek Sach, who had told MPs in 2014 that it was in the bank's financial interest to destroy a client. professional and that the Treasury Agency, the APA, encouraged him to withdraw more loans to commercial clients.

Asked the Treasury restricted committee on the question of whether it would be in the commercial interest of RBS to destroy a client in order to strengthen its balance sheet, Sach replied:

"This is absolutely true and, as you probably know, the Asset Protection Agency was created in 2010 and it has always pushed us to ask for more foreclosures for this reason, which is why I vigorously resisted everything. Throughout the period, a little correspondence between me and them about threats and alternative threats and not being ready to do it. "

The report sent to the BBC revealed that the improper treatment of commercial customers in GRG was widespread, systematic and intentional. More than nine out of ten clients have experienced some form of abuse and only a small portion has returned to the bank with its activities intact.

Promontory, the consultants who drafted the leaked report, told members of the Special Committee of the Treasury that they expected to conduct a re-examination to determine the individual guilt that would have been examined.

However, Financial Conduct Authority CEO Andrew Bailey has decided that the CFA will conduct its own investigation. In the summer of 2018, he announced that the CFA would not investigate his investigation, which prompted GRG's small business owners to hide it.

Evidence on the role of the Asset Protect Agency suggests that the leaders could have indicated the government's involvement, potentially exposing the Treasury to heavy claims for compensation.

In light of the new evidence, Oliver Morley Estates has notified its intention to sue Her Majesty's Treasury as compensation for its role in the dismantling of its business.

The FCA has announced that it will shortly publish a full report on the findings of an implementation survey regarding GRG's division of RBS.