A former Royal Bank of Scotland (RBS) boss has admitted accepting more than £600,000 in bribes from struggling business owners while working at the bank’s controversial Global Restructuring Group (GRG), a unit previously accused of mishandling thousands of small businesses.
Stuart Holloway, 48, who worked as a manager at GRG, pleaded guilty to bribery charges at Edinburgh Sheriff Court after prosecutors said he exploited vulnerable customers by demanding payment in return for lucrative treatment.
The cases took place between 2012 and 2016 at the RBS office in St Andrew Square, Edinburgh, at a time when the restructuring unit was already facing intense scrutiny from regulators, politicians and the media.
The GRG was designed as a “transformational component” aimed at helping financially distressed businesses recover. However, the unit fell into disrepute after it was accused of bailing out insolvent companies, imposing penalty fees and exploiting struggling firms.
Prosecutors told the court that Holloway abused his position by promising to reduce or eliminate the company’s debts, prevent credit unions from foreclosing or help businesses move their banking systems away from GRG to pay them off.
In one case revealed in the lawsuit, Holloway threatened a customer that unless they paid a large sum, their account would be transferred to other managers – meaning this could lead to the collapse of their business. The customer then paid £366,100 to leave the category.
In another incident, prosecutors said Holloway defrauded another customer out of £154,447 and demanded the use of a golf club membership, exploiting a person’s fear that his company would fail.
Prosecutors described how the bank owner put customers in a state of “fear and terror”, with the victims fearing they would lose their lives if they refused to do so.
Holloway joined RBS in 2005 and began working within GRG in 2010. He pleaded guilty earlier this week to two counts of bribery, while prosecutors pleaded guilty to multiple charges in other cases. The Crown Office and the Procurator Fiscal Service have confirmed that no further charges are pending against them.
Sentencing is scheduled for April 22.
The revelations renew scrutiny of the GRG scam, which has long cast a shadow over the bank, which now operates as NatWest Group, and its relationship with small business customers.
The dispute first gained public attention in 2013, when businessman and government adviser Lawrence Tomlinson published a report claiming that GRG was deliberately pushing viable businesses into distress in order to profit from their difficulties.
A subsequent investigation commissioned by the Financial Conduct Authority (FCA) found that many companies were “systematically mistreated” by the agency. The report, made public in 2018 after pressure from members of Parliament, concluded that thousands of businesses were mismanaged and that some suffered serious financial damage.
Victims have been insisting that GRG practices are destroying potential companies and costing businessmen their livelihoods.
Following the scandal, RBS issued a public apology and set up a restructuring plan to compensate affected businesses.
Holloway was suspended by RBS in 2016 and later left the bank with a voluntary redundancy package in May of that year. The allegations emerged after a business client notified the bank in 2017 that Holloway wanted to be paid in cash in return for favorable treatment. Five months later the bank referred the case to the Scottish police.
A NatWest spokesperson said this behavior was completely unacceptable and outside the bank’s internal procedures.
“This criminal act is completely unacceptable and is related to unauthorized, private behavior of an individual, which is outside of the bank’s policies and procedures for customer management,” the bank said.
NatWest added that it would review the evidence presented at the sentencing before deciding whether to take further action, but declined to comment on whether compensation would be paid to those affected by Holloway’s actions.
This case first came to light following a report by The Times newspaper in 2018, which revealed that the police were informed of these allegations a few months before RBS officials appeared in Parliament to answer questions about the GRG issue.
At the time, then-chief executive Ross McEwan told MPs he was unaware of any criminal investigations involving bank staff. The subsequent revelation that the bank had referred Holloway’s case to the police drew criticism from the Treasury committee, whose chairman at the time, Mr. Nicky Morgan, said the bank failed to do what was expected of Parliament.
McEwan later apologized for what he described as “any confusion”, saying he believed the bribery allegations had nothing to do with the issues being considered by the committee.
The GRG scandal ultimately caused a major crisis of confidence in the bank, leading to a re-examination of the regulator’s handling of the matter and raising questions about the government’s oversight of RBS at the time, which remains largely taxpayer-owned following the bailout.
An investigation by the agency found that nine out of ten small and large companies managed by GRG suffered some form of mismanagement, while one in six successful businesses faced “financial distress” as a result of their actions.
Although the unit was launched as a restructuring arm aimed at helping companies recover, only about one in ten businesses return to mainstream banks after passing through the GRG, according to the FCA report.
The case against Holloway now represents one of the clearest examples of alleged criminal behavior linked to a division that was among the UK’s most controversial banking sector scandals.
