The Financial Conduct Authority (FCA) has denied that its decision to withhold the externally-commissioned report on practices at Global Restructuring Group (GRG) was dictated by fear of a lawsuit by the business’ owner, RBS.
The FCA was responding to “speculations” over its rationale for releasing a summary, rather than the full text, of a report commissioned to advisory firm Promontory over GRG’s treatment of SME customers.
The FCA said publishing the full report without obtaining written consent “from all affected parties” would be a breach of statutory restrictions, and that it had followed statutory policy that allows individuals to respond to criticism that is made of them in reports before they are published.
“We have therefore not sought consent from the individuals or groups of individuals who are identified in the Skilled Person’s [Promontory’s] report,” the FCA said.
“Our experience of previous reviews carried out by the regulators is that that would be a complex and lengthy process and, where consents were not forthcoming, would likely result in only a heavily redacted version of the Skilled Persons’ Report being publishable.”
Additionaly, the FCA said it was concerned about the effect on its own “ongoing focussed investigation” were the report to be fully published.
“We are firmly of the view that the approach we took was fair and balanced, a view we have had confirmed by external independent counsel.”
After the FCA released the final summary, on November 28, Nicky Morgan, chair of the Treasury Commitee, wrote to FCA chairman Andrew Bailey asking whether the decision to only publish a summary was based on references to “management” contained within.
In his reply, Bailey said: “It is the legal consequences of referring to what management knew or ought to have known which has proved particularly problematic and which we deliberately excluded from the Interim Summary.
“The Skilled Person’s report did in fact name certain individuals in a factual context and refers to ‘management’ in many laces; it also contains personal data about some individuals, and contains some anonymised but specific case summary information about some of the SME customers in the review sample.”
Specialist advisers were appointed by the Treasury Committee to counsel the FCA over the publication of the report. According to Bailey, the advisers saw “considerable force” in the Authority’s concerns over a full publication.