The Royal Bank of Scotland has been accused of acting like a "vampire" that sucks cash out of profitable businesses by government adviser and serial entrepreneur Lawrence Tomlinson.
Appearing before the Treasury select committee this afternoon, Tomlinson told MPs he had gathered evidence from hundreds of businesses that suggested RBS' Global Restructuring Group (GRG) turnaround division had been driving profitable firms out of business and seizing their assets.
Tomlinson's appearance built on a report he wrote as the business department's entrepreneur-in-residence, which accused RBS of operating like a "hit squad" by withdrawing lines of credit from healthy firms and burdening them with huge fees so they could seize the firms' assets, normally property, at discount prices.
The entrepreneur, who had gathered evidence from 200 firms at the time and over 1,000 since then, told MPs that he liked RBS "more to a vampire business" due to rough practises in its GRG business support programme.
“When your business was moved into the GRG by whatever fashion, you were given perhaps a doubling of the bank’s interest rate margin and lots and lots of fees,” he said.
“The business becomes strangled. It is frustrating to hear talk on ‘zombie firms’. I liken them more to a vampire business – they are kept in the GRG and as soon as they get any cash to invest and grow, it is taken out of them. I have seen firms face charges and fees that are set exactly at the amount that the firms have made.”
Tomlinson previously told HuffPostUK that while GRG is "perceived as doing what it's doing", it will take RBS "longer than a generation" to win back the public's trust.
He added: "I haven't heard them say sorry yet...!"
Following Tomlinson's allegations as laid out in his report, RBS chief executive Ross McEwan brought in the law firm Clifford Chance to examine the claims. The Financial Conduct Authority has also launched a probe.
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A spokesman for RBS said: "GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives.
"Not all businesses that encounter serious financial trouble can be saved."