The Royal Bank of Scotland could face legal action from hundreds of small business owners over its controversial Global Restructuring Group (GRG) division.

According to The Times, 800 companies have approached the RBS GRG Business Action Group to be considered for a group legal action.

The action group has appointed law firm Clyde & Co to review allegations that RBS GRG, which was meant to help firms facing collapse, actually forced viable companies out of business.

The Times said some companies claimed they were exploited and, in somce cases, destroyed as a result of GRG’s activities and want compensation.

The Financial Conduct Authority launched a probe into RBS GRG in January and appointed Promontory Financial Group and Mazars to conduct a skilled persons report into the treatment of the business’s customers. The probe is ongoing.

Hundreds of small business owners are planning to sue the Royal Bank of Scotland (RBS) over its controversial Global Restructuring Group (GRG) division.

According to The Times, 800 companies have approached the RBS GRG Business Action group to be considered for the action.

Law firm Clyde & Co has been appointed by the group to review allegations that sustainable companies were forced out of business by GRG.

The Financial Conduct Authority (FCA) is conducting a probe into GRG after government adviser Lawrence Tomlinson published a report on the GRG division’s conduct in November 2013.

The report said that RBS’s GRG unit regularly forced business customers to default on loans so that the bank could charge higher fees or seize their properties and sell them.

RBS commissioned law firm Clifford Chance to investigate Tomlinson’s allegations, which rejected Tomlinson’s central argument.

The bank is closing down GRG.

http://citywire.co.uk/new-model-adviser/news/nolayout/rbs-faces-legal-action-over-grg-unit/a772787