Page 228 - Bank Case Studies

“the evidence that the bank’s representatives provided was

not correct in answering the question as to whether GRG

was a profit centre”. He apologised for this “lack of clarity on

an important point”, but he said Sach and Sullivan had made

“an honest mistake”. (See Appendix 1) (25)

Sullivan then wrote to the committee to admit that he had,

in fact, reviewed an early copy of the Clifford Chance report

before it was published, despite telling MPs “I never saw a

single draft” whilst Sach, wrote to the committee admitting
that he ”was responsible for signing off internal documents

that described the unit as “a major contributor to the

Group’s bottom line”.

Moreover, the documents showed that GRG staff were

asked to split customers into two groups – those considered

“viable” and those “the bank would like to exit”.

“Viable” firms would have their debts restructured

to boost the bank’s revenues and often be forced

to surrender cheap stakes in their assets or equity

to GRG’s investment arm. But if firms were

considered a potential risk, even if they were not

insolvent, staff were instructed to “exit” by “placing

pressure on the company to repay the debt as

soon as possible through refinancing, realisation

of assets, and possibly commencing insolvency

proceedings”.