A businessman who claims his property empire was ‘stolen’ by RBS has vowed to spend millions of pounds to expose links between the bank’s notorious restructuring unit and the Treasury in a landmark legal case starting tomorrow.
In his first major interview, Oliver Morley said the legal action was ‘worth every penny’– even though he faces paying RBS’s £2million legal bill if he loses.
Morley, 49, revealed that he lost ‘nearly everything’ including custody of his young daughter and his mansion after RBS ‘pirates’ forced him to hand over the keys to his £125million business in 2010.
He says he ‘hit the bottle’ and lived as a recluse for years before rebuilding some of his fortune, which he is now using to challenge RBS in the High Court.
The case will see Derek Sach, ex-boss of RBS’s toxic Global Restructuring Group (GRG), face questions in court for the first time.
Morley’s lawyers will present memos that, they argue, show the Treasury encouraged RBS to seize control of small businesses which had taken loans from the bank.
His legal team will allege that senior bank staff were awarded bonuses connected to targets set by an arm of the Treasury.
RBS denies Morley’s version of events, saying it suffered a £30million loss on his loans and will contest his claims ‘vigorously’.
Speaking to The MoS, Morley said: ‘The case is costing me millions but it is worth every penny whether I win, lose or draw because I know the bank will face far-reaching repercussions and potentially a public inquiry.
‘Thank God I managed to get back on my feet because it means I have been able to get together an enormous amount of money to take this case to the High Court.
It was a complete robbery. I cannot rest until I have some form of justice because of what it has cost me personally, mentally, financially and in terms of my family.
‘You feel you have been victimised and abused by RBS and the consequences will stay with you for the rest of your life. There is no empathy on the part of the bank then or now. Something needs to change or banks will keep treating customers like they treated me.’
The GRG unit is alleged to have been used to squeeze small firms out of business, enabling RBS to acquire assets on the cheap which could then be sold to recover debts.
The Treasury’s involvement started after it spent £45.5billion of taxpayer money bailing out RBS in the financial crisis.
Officials set up the Asset Protection Agency (APA), now disbanded, to oversee nearly £300billion of bad debts on RBS’s books.
Morley’s case at the Royal Courts of Justice – the first in-depth examination of RBS’s GRG unit in the High Court – should also shed light on the relationship between the APA and the bank.
The self-made businessman, who left school at 16, launched his property empire in 1995 when he took out a mortgage on his house to buy a commercial property in Manchester.
As his empire expanded he began a profitable relationship with RBS, which provided him with loans to finance his ventures.
According to Morley, the bank insisted just before the 2008 financial crisis he sign up to a complex deal that would protect him against high interest rates on his debts.
But the economic meltdown saw interest rates slashed by the Bank of England and Morley began to face punitive charges due to this so-called ‘interest rates swap’ deal.
Morley said: ‘I would call this product the instrument of financial death. I am not financially trained and assumed I could trust my bank manager. If RBS had left me alone I would have cruised through the crisis because we easily paid the interest and had 95 per cent occupancy rate [in the properties].’
Morley says his relationship with RBS turned sour when he legally backed out of the interest rate swap deal.
He said: ‘I was pulled into a meeting with an RBS property boss and he said that if I did not get back paying that interest rate hedge, ‘You are f*****, Sonny Jim. You will never do business with this bank again.’
‘That was when RBS became pirates and it got very personal. I could not understand it. I said to them ‘Why will you not help me? Why are you doing this?’
And one of them said: ‘Not until you are on your knees, living in a terraced council house, driving a Cavalier, will we help you Mr Morley.’ They became ever more vicious and nasty towards me.’
In 2010, unable to repay a £75million loan, Morley says he proposed a restructuring but RBS pulled the plug, eventually acquiring 66 per cent of his business. RBS argues the deal was ‘consensual’.
Morley said: ‘I took the pressure, stress and anxiety home with me, I hit the bottle and I got very low. I moved down to London because I just had to get away from everything. I became a bit of a recluse.’
As he began to put his life back on track in 2014, Morley began to learn of the raft of allegations surrounding the GRG.
He said: ‘I thought ‘Wow, was that what it was about?’ At the time I had no idea we were being hunted. We were the game and they were the game hunters. As information began to emerge I became incensed.’
A RBS spokesman said: ‘The bank fundamentally disagrees with Mr Morley’s claims and does not believe they have any merit.
‘It is contesting them vigorously in court. The bank incurred around £30million of losses on the £75million it lent to Mr Morley, who was a sophisticated customer in receipt of extensive professional advice. The consensual deal ultimately reached with the bank was proposed by Mr Morley and his advisers.’
On the wider allegations of wrongdoing by the GRG unit, the spokesman said: ‘The Financial Conduct Authority has confirmed its independent review found no evidence that RBS artificially distressed and transferred otherwise viable SME businesses to GRG to profit from their restructuring or insolvency.’