When news happens get involved. Send your pictures, views and video to us by text and email
Hoteliers: We are victims of Royal Bank of Scotland
THE former directors of a multimillion pound Portland hotel, spa and business park claim to be victims of bank lending practices they say forced them out of business.
Roy Haywood and Andrew Coupe, former directors of Southwell Business Park and the Portland Spa Hotel, are forwarding their details to financial investigators who are investigating ‘unscrupulous’ practices by the Royal Bank of Scotland.
A government report says RBS ‘harmed customers through their decisions and caused their financial downfall’.
The bank has defended itself against the allegations and has launched an investigation.
Mr Haywood and Mr Coupe and their fellow directors called in the administrators in 2009 when they became what appeared to be victims of the recession.
Around 100 jobs were lost by staff at the £10million hotel and spa from local suppliers.
The government report, carried out by entrepreneur Lawrence Tomlinson for Business Secretary Vince Cable, looked into small business lending.
In some cases, state-backed bank RBS is said to have withdrawn lines of credit for previously solvent firms by charging high fees and charges so it could then seize assets, typically property, at cheaper prices.
Mr Coupe said: “Since 2009 we have lived with this situation. It’s only now since this report was commissioned by the government to probe into the complaints we’ve thought: ‘This sounds like what happened to us’.”
The combined Portland hotel and spa business had an asset value of £17.2million in April 2008, surveyors Savills confirmed.
The business had borrowed £10million from RBS – which was covered by its assets – the former directors say.
However, eight months later RBS said the site value had dropped to £10million because of a chaotic property market.
A condition of the loan was a 6.7 per cent ‘rate capping’ deal with the bank’s nominated insurance providers.
Mr Haywood said within 18 months this cost the business around £100,000 a year above the then bank interest rate.
After a series of meetings about finance, the company’s account was transferred to the bank’s special division Global Restructuring Group, which – Mr Haywood and Mr Coupe say – oversaw the demise of the Southwell Business Park company.
Despite the directors telling the bank they were close to securing a multi-million pound contract with LOCOG in connection with the London 2012 Olympic sailing in Wemyouth and Portland, RBS instructed administrators that the property must be sold within eight weeks.
Mr Haywood said: “This enforced sale of Southwell Business Park and its subsidiaries by RBS resulted in the loss of some 100 jobs and a catastrophic consequence for a variety of local supplier businesses and also contractors working on the site development.
“The shareholders personally lost around £6million.”
He added: “The company going into administration cost a lot of people their jobs.”
Details are being passed on to investigators through Mr Haywood and Mr Coupe’s solicitors.
Both men are seeking financial recompense from RBS.
• Bank 'to investigate' allegations
RBS has commissioned a review into the allegations.
CEO Ross McEwan said: “Serious allegations have been made about how some of these customers were treated by the bank.
“We have to investigate those fully and we will.
“The review I have commissioned will examine the details of the allegations that have been made and will have access to whatever information it needs.
“It is important to note that the most serious allegation that has been made is that RBS conducted a ‘systematic’ effort to profit on the back of our customers when they were in financial distress.
“We do not believe that this is the case, but it has nonetheless done serious damage to RBS’s reputation.
“No evidence has been provided for that allegation to the bank.
“The review will investigate the claim fully and I will report back on its findings.”
Mr McEwan added that Clifford Chance will conduct the review on an independent basis, which will be lead by a regulatory partner within the firm and with a team that has had no previous dealings with Global Restructuring Group matters.
Comments are closed on this article.