* Bank "wilfully obtuse" in evidence to parliamentary
* RBS now accepts "profit centre" term used in Large report
LONDON, July 22 Royal Bank of Scotland
was "wilfully obtuse" when giving evidence to lawmakers
examining whether its corporate turnaround division had been
used to make money out of small businesses, the chairman of a
British parliamentary committee said.
The Global Restructuring Group (GRG) unit deals with RBS's
corporate clients who find themselves in financial distress and
have missed or are in danger of missing debt repayments. It is
meant to work with companies to help them return to health.
RBS's Deputy Chief Executive Chris Sullivan and GRG head
Derek Sach told the Treasury Select Committee that the division
was not used as a "profit centre" when they gave evidence in
June, contradicting the findings of a report by former Bank of
England Deputy Governor Andrew Large.
However, in a letter to committee chairman Andrew Tyrie
published on Tuesday, Sullivan said RBS now accepted Large's
"With regard to the term of 'profit centre' we wish to make
clear we do not disagree with the way that that accounting term
was used by Andrew Large in his report," Sullivan said in the
Tyrie said RBS had made a "belated U-turn", having initially
branded the description as "totally inappropriate".
"It now appears that RBS has been wilfully obtuse with the
committee. If this is how RBS deals with a parliamentary
committee, how much can customers and regulators rely on it to
be straightforward with them?" he said in a statement.
Tyrie said he would be writing to RBS Chairman Philip
Hampton on the matter and the committee would report on it after
RBS declined to comment on Tyrie's remarks.
Former government advisor Lawrence Tomlinson last year
accused RBS of pushing small businesses into the GRG unit so it
could charge higher fees and take control of their assets. An
independent review by law firm Clifford Chance found no evidence
the bank had set out to defraud customers, but the unit is still
being investigated by Britain's financial regulator.
(Reporting by Matt Scuffham; Editing by Pravin Char)