In the latest case to allege misconduct by the bank’s restructuring division, RBS has been alleged to have conspired to push the business into administration to benefit from its sale by the former CEO of a software company who is suing the bank, shows court filings.

The allegation by Scottish businessman Neil Mitchell against Royal Bank of Scotland (RBS) is that the bank conspired in 2007 with co-defendants KPMG and U.S.-based fund Cerberus Capital Management to sell assets of his company, Torex Retail plc, for below their value. 128 million pounds ($184 million) in damages on the claims is being sought by Neil Mitchell.

Administration is a form of protection from creditors under which external managers from KPMG were brought in into the company. The aim of such a move was to force its sale to Cerberus and so rid its books of a bad loan it was owed by Torex, shows documents filed at Britain’s High Court of Justice. The claim for the damages made by Mitchell is based on the assumption that RBS pushed Torex Retail into administration.

RBS and Cerberus conspired secretly to ensure Torex would be sold for below its value to Cerberus, Mitchell also alleges in the court filing.

Conspiracy by unlawful means, breach of trust and negligence are included in the allegations.

“We have thoroughly investigated Mr Mitchell’s allegations and believe them to be entirely without merit. Mr Mitchell has chosen to issue legal proceedings which will be met by a full defense,” a spokeswoman for RBS said.

While saying that Mitchell’s claims had no substance and that KPMG had applied to have the case struck out, a spokeswoman for KPMG denied it acted improperly.

Cerberus declined to comment.

Following claims by hundreds of small businesses which say RBS’s Global Restructuring Group (GRG) mistreated them or forced them out of business, the division being investigated by Britain’s financial regulator. The claims by Mitchell once again focus attention on RBS’s GRG.

No evidence of the allegations were found after an independent review of GRG which was asked to be conducted by law firm Clifford Chance by RBS. The bank is 73 percent-owned by the UK government.

To conduct its own investigation and produce a report that was originally scheduled for the end of last year and now expected to be published in mid-2016, Britain’s Financial Conduct Authority has hired firms Promontory Financial Group and Mazars.

The bank is being attempted to be rebranded as the biggest supporter of smaller businesses in the UK by the RBS Chief Executive Ross McEwan and the regulatory inquiry comes amidst these attempts.

Among those who represented RBS in its dealings with Torex Retail were former RBS Chairman Philip Hampton and former Chief Executive Stephen Hester, show the court documents. There were no comments from Hester and Hampton.

After Mitchell and other executives at the firm blew the whistle on fraud they had discovered within the company, Torex Retail, which sold software for touch screen shopping tills, went into administration in June 2007.

(Adapted from Reuters)

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