A logo design of the Royal Bank of Scotland (RBS) is reflected in the window of a branch workplace in London November 1, 2013.
The previous CEO of a software application company is suing RBS (RBS.L) for presumably conspiring to push the business into administration to take advantage of its sale, court filings reveal, in the latest case to declare misbehavior by the bank’s restructuring department. Scottish entrepreneur Neil Mitchell is looking for 128 million pounds ($ 184 million) in damages on insurance claims that Royal Bank of Scotland (RBS) conspired in 2007 with co-defendants KPMG and U.S.-based fund Cerberus Capital Management [CBS.UL] to sell assets of his business, Torex Retail plc, for listed below their value. Mitchell declares RBS pushed Torex Retail into administration – a form of protection from creditors under which external managers from KPMG were brought in – in order to compel its sale to Cerberus therefore rid its books of a bad loan it was owed by Torex, files submitted at Britain’s High Court of Justice show. Mitchell also declares in the court filing that RBS and Cerberus conspired privately to make sure Torex would be cost listed below its value to Cerberus. The accusations include conspiracy by unlawful ways, breach of trust and carelessness.
” We have actually completely examined Mr Mitchell’s accusations and think them to be totally without merit. Mr Mitchell has actually opted to provide legal procedures which will be fulfilled by a complete defense,” a spokesperson for RBS said.A spokeswoman for KPMG rejected it acted poorly, stated Mitchell’s claims had no substance and that KPMG had applied to have the case struck out. Cerberus decreased to comment. The insurance claims when again focus attention on RBS’s International Restructuring Group (GRG), a department being examined by Britain’s monetary regulatory authority following insurance claims by numerous small companies which state GRG maltreated them or forced them out of business.
RBS, 73 percent-owned by the UK government, asked law firm Clifford Chance to undertake an independent review of GRG, which found no proof for the claims. Britain’s Financial Conduct Authority has actually worked with firms Promontory Financial Group and Mazars to conduct its own examination and produce a report, originally scheduled for completion of last year and now anticipated to be published in mid-2016.
The regulatory query comes as RBS Chief Executive Ross McEwan is trying to rebrand the bank as the biggest fan of smaller sized companies in the UK. The court documents name former RBS Chairman Philip Hampton and previous President Stephen Hester as amongst those who represented RBS in its dealings with Torex Retail. Hester and Hampton declined to comment.Torex Retail, which offered software for touch screen shopping tills, went into administration in June 2007 after Mitchell and other executives at the firm blew the whistle on fraud they had discovered within the business. (Reporting by Lawrence White and Andrew MacAskill; Editing by Mark Potter).