RBS is a 'disgrace', says 'swap victim' London & Westcountry Estates

<p> </p><p>London & Westcountry Estates (LWE), a family-owned operator of 28 business parks in southern England, blamed its collapse on a complex derivative RBS sold it in July 2008 – just before rates were cut to historic lows. As administrators from Ernst & Young were on Tuesday sent to LWE's Plymouth offices, the company's chairman, Michael Hockin, branded state-backed RBS a "disgrace". He claimed the lender's 10-year swap against a £57m three-year loan had cost his business at least £5m in extra payments over the past three years. "We were given 24 hours to sign and told interest rates were about to shoot up, only for them to collapse," he said. "It's absolutely disgraceful what RBS has done to our business." He said when he bought the product he was under the impression the swap could be terminated after three years through a break clause. However, last year he was informed the clause only allowed RBS to cancel the product – and not the other way round. Gary Streeter MP, who has been following the case, said he had been shocked by the behaviour of the bank, which is 82pc owned by the taxpayer. "They have been utterly inflexible and are accountable to no one. This should not have been allowed to happen to what was a good and profitable business," he said. Mr Streeter called for a parliamentary debate on banks' alleged mis-selling of interest swaps. He has written to Chancellor George Osborne and Business Secretary Vince Cable to ask them to look into the matter. Andrew Tyrie, chairman of the Treasury Select Committee, has already called on the Financial Services Authority (FSA) to investigate claims, after a Telegraph investigation, that thousands of small businesses could have been sold inappropriate interest rate swap products. Speaking on Tuesday he said: "This appears to be just the sort of case the FSA should be getting its teeth into." Administrators to LWE were appointed by US private equity firm Blackstone, which last year signed a joint venture deal with RBS to manage a £1.4bn property portfolio. RBS sold the portfolio, including LWE's debt, for about £975m, with the bank retaining a 75pc stake and Blackstone taking a 25pc holding and acting as the asset manager. A spokesman for RBS said the bank had spent a "considerable amount of time and effort" to reach an agreement with LWE and that the administration process was the only "viable option remaining". RBS has always denied allegations that it mis-sold interest-rate swaps. Blackstone said its attempts to reach a constructive solution had been "rebuffed" and the administration was necessary to "safeguard our investors' interests and indeed those of LWE's tenants". Barclays has apologised to "a small number" of business customers for telling them to keep their loan and interest rate swap complaints secret from the FSA. Acting after a Telegraph investigation of mis-selling complaints, Barclays' head of compliance Mike Walters wrote: "Nothing in this letter shall prevent the parties discussing the complaint, the settlement or any other related matter with the Financial Services Authority [or any relevant regulator] or their professional advisors."</p>

RBS is a 'disgrace', says 'swap victim' London & Westcountry Estates

  London & Westcountry Estates (LWE), a family-owned operator of 28 business parks in southern England, blamed its collapse on a complex...

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