A former Royal Bank of Scotland (RBS) executive has admitted accepting more than £600,000 in bribes from struggling business owners while working in the bank’s controversial Global Restructuring Group (GRG), a department previously accused of mistreating thousands of small businesses.
Stuart Holloway, 48, who worked as a manager in the GRG department, pleaded guilty to bribery charges at Edinburgh Sheriff Court after prosecutors said he exploited vulnerable business customers by demanding payments in return for preferential treatment.
The offenses occurred between 2012 and 2016 at RBS’s St Andrew Square office in Edinburgh, at a time when the restructuring unit was already facing intense scrutiny from regulators, politicians and the media.
GRG was designed as a “turnaround department” to help financially distressed companies recover. However, the unit became infamous because of allegations that it caused viable companies to suffer financial difficulties, imposed fines and exploited companies in difficulty.
Prosecutors told the court that Holloway abused his position by offering to reduce or cancel corporate debt, prevent the withdrawal of credit facilities or help companies move their banking operations away from GRG in exchange for personal payments.
In one case outlined in the indictment, Holloway threatened a customer that his account would be given to other managers unless he paid a significant amount – implying that this would likely lead to the collapse of his business. The customer then paid £366,100 to leave the department.
In another case, prosecutors said Holloway extorted £154,447 from another customer and demanded the use of a golf club membership, exploiting the individual’s fear that his business would otherwise fail.
Prosecutors described how the banker left customers in a state of “alarm and anxiety” and victims feared the loss of their livelihoods if they refused to comply.
Holloway joined RBS in 2005 and began working at GRG in 2010. Earlier this week, he pleaded guilty to two bribery charges, while prosecutors accepted pleas of innocence on several other charges. The Crown Office and the Procurator Fiscal Service confirmed there were no further charges outstanding against him.
Sentencing is scheduled for April 22.
The revelations revive the investigation into the GRG scandal, which has cast a long shadow over the bank, now trading as NatWest Group, and its relationship with small business clients.
The controversy first came to public attention in 2013, when businessman and government adviser Lawrence Tomlinson published a report alleging that GRG was deliberately forcing viable companies into distress to profit from their difficulties.
A subsequent investigation commissioned by the Financial Conduct Authority (FCA) found that many companies had been “systematically mistreated” by the entity. The report, published in 2018 after pressure from MPs, concluded that thousands of companies had been badly treated and some had suffered severe financial damage.
Victims have long argued that GRG’s practices destroyed otherwise viable businesses and cost entrepreneurs their livelihoods.
Following the scandal, RBS publicly apologized and set up a compensation scheme to compensate the companies affected.
Holloway was suspended from RBS in 2016 and later left the bank in May that year with a voluntary redundancy package. The allegations arose after a business customer informed the bank in 2017 that Holloway had demanded cash payments in return for preferential treatment. Five months later the bank referred the case to Police Scotland.
A NatWest spokesman said the behavior was completely unacceptable and breached the bank’s internal procedures.
“This criminal activity is completely unacceptable and involves the unauthorized, private conduct of an individual that is completely outside the bank’s policies and processes for dealing with customers,” the bank said.
NatWest added that it would consider the evidence presented at sentencing before deciding whether further action was necessary, but declined to comment on whether compensation would be paid to those affected by Holloway’s actions.
The case first came to light after The Times reported in 2018 that police had been made aware of the allegations, months before RBS executives appeared before Parliament to answer questions about the GRG scandal.
At the time, then-chief executive Ross McEwan told MPs he was unaware of any criminal investigations into bank staff. The subsequent revelation that the bank had already referred Holloway’s case to the police sparked criticism from the Treasury Select Committee, whose then chair Nicky Morgan said the bank had failed to achieve the level of transparency Parliament expected.
McEwan later apologized for what he described as “any confusion” and said he believed the bribery allegations had nothing to do with the matters being investigated by the committee.
The GRG scandal ultimately triggered a wider crisis of confidence in the bank, led to renewed scrutiny of the regulator’s handling of the matter and raised questions about government oversight of RBS at a time when it remained majority taxpayer-owned following the financial crisis bailout.
Research by the department found that nine out of 10 small and medium-sized businesses served by GRG experienced some form of mistreatment, while one in six viable businesses experienced “significant financial difficulty” as a result of its actions.
Although the unit was portrayed as a restructuring arm designed to help companies recover, only about one in 10 companies returned unscathed to mainstream banking after passing through GRG, according to the FCA report.
The case against Holloway now represents one of the clearest examples of alleged criminal behavior linked to the department that was at the center of one of the most controversial scandals in the British banking sector.
