'You have 24 hours': Devastating tape reveals how RBS accused of bullying warned struggling chain of chemists it could call in the administrators

A disturbing recording of a phone call made by officials at Royal Bank of Scotland to a firm struggling to survive appears to back up claims that the taxpayer-owned bank bullied small businesses.
RBS is being investigated by the City regulator and the Serious Fraud Office over claims by Government adviser Lawrence Tomlinson that it pushed struggling firms into its ‘restructuring’ division so it could charge higher fees and interest, and take control of assets.
The Mail on Sunday has a recording of a phone call between RBS’s business recover unit – the Global Restructuring Group – and TriHealth, a chain of pharmacies that claims the bank tried to pull its ‘life support’.

Investigation: TriHealth accuses RBS of becoming increasingly aggressive and believes it is determined to push the business into administration

TriHealth, which operates in St Helens, Lancashire, bought two insurance policies from RBS meant to protect firms against interest rate movements on loans.
But these so-called ‘swaps’ ended up costing it £1.2million and business suffered. The swaps scandal is set to cost banks up to £20billion in mis-sold policies.


A review, overseen by the Financial Conduct Authority, ruled that TriHealth had been mis-sold swaps. However, TriHealth was not compensated.
The FCA lets banks put in place alternative products rather than pay compensation if it can argue it puts the firm back in the position it would have been in had it not been mis-sold the product.
In the recording of the conference call, a member of the bank recovery team tells TriHealth directors Mark Addison, Sally Woodward and Leo Risley: ‘Following an internal decision we are no longer bound by the review.’ He goes on to say that the bank will take control if it has to.
‘You’ve gone through the review process, come out the other side and been told there is no redress. The review has nothing to do with how you’re going to get through the next few weeks.
‘If you can’t give us comfort on this, we will have to consider the options open to us and one of those is the recourse to our security, which may mean the business goes into a process. You have a 24-hour deadline to respond to us or we will have to consider the options, including administration.’
While TriHealth says the bank initially seemed prepared to work with the firm, it accuses RBS of becoming increasingly aggressive and believes it is determined to push the business into administration.
Addison said: ‘RBS has demanded we give our consent to its appointed auditors, PwC, Grant Thornton or Ernst & Young, coming in to review the firm but won’t allow us to appoint independent auditors. These companies are on the RBS panel.
‘RBS said if we did not consent to this then it would remove funding and instigate insolvency proceedings. We feel RBS has groomed us, assaulted us, then kept us barely alive on a drip. It now wants to pull life support.’
A spokeswoman for RBS said: ‘It would be inappropriate to comment on the specifics of this case as it is subject to ongoing litigation.’
But the bank welcomed the FCA inquiry into Tomlinson’s allegations and said: ‘As of now, no evidence has been produced that backs the claims of systematic fraud made this week. We need to get to the facts as quickly as possible. That’s why we fully support the FCA’s work and will carry on with our own investigation.’
A spokesman for Bullybanks, which lobbies for 1,600 firms mis-sold swaps, said: ‘At least 15 per cent of members are now in administration and others are headed that way. This is a reflection of the banks’ behaviour, in particular RBS’s.’
Alison Loveday, a partner at Manchester law firm Berg, is handling claims for 160 firms believed to have been mis-sold swaps, of which more than a quarter are RBS customers. Since the allegations against RBS broke, Loveday says she has been inundated by calls from firms recounting similar experiences.
‘In the cases we’ve seen the firms were not in financial difficulties but were pushed into it by the actions of RBS and GRG,’ she said.
RBS has hired Clifford Chance to look into the allegations, though critics point to its close links with RBS. The law firm advised the bank on the fallout from the Libor scandal.
Meanwhile it was revealed that RBS’s chief risk officer David Stephen joined after leaving Australia’s ANZ Bank in 2010 following an internal review which found risks at ANZ were not properly understood or managed.

Bank’s harshest critic had his own run-in

Live fast: Ginetta is owned by Lawrence Tomlinson

Lawrence Tomlinson, the multi-millionaire behind the report that damned taxpayer-owned Royal Bank of Scotland, is used to controversy.
As the Department for Business’s ‘entrepreneur in residence’, he argues that RBS engineered the collapse of firms to levy high fees and buy pricey property at a discount. But this is just the latest in a series of attacks he has aimed at the banks and RBS in particular.
This time Tomlinson came in for criticism himself after he failed to disclose his own issues with RBS.
His LNT Group, which owns the Ginetta racing car brand, banks with RBS and as part of a fractious refinancing this year he had to put in £30million more of his own cash.
Tomlinson’s own tax affairs have also came under scrutiny, after his care home firm TriCare carried out a sale-and-leaseback deal in 2003 to reduce its tax bill that turned sour.
Tomlinson is said to be worth up to £400 million. He says if the RBS saga goes wrong for him he could just ‘go and sit on a beach in Antigua’. But he has also said he has pursued RBS, arguing it is in everyone’s interest to sort the banks out.