Crown Office 'disappointed' over Cable RBS letter

Business Secretary Vince Cable says it is "legitimate" to ask about the inquiry's progress

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The Crown Office has said it was "disappointed" that UK Business Secretary Vince Cable wrote to the Advocate General over an ongoing inquiry into Royal Bank of Scotland.

Mr Cable asked for Scottish legal officials to make a decision on whether to prosecute former RBS directors.

An investigation began last year after a report by the banking regulator.

However, the Crown Office said the Advocate General had no role in the investigation or prosecution of crime.

In a letter to the UK government's top Scottish law officer - Advocate General for Scotland, Lord Wallace - Mr Cable said the matter had been referred to the Crown Office in Scotland in January last year.

The business secretary told his fellow Liberal Democrat that he was very keen for a decision to be reached as quickly as possible to maintain public confidence.

Mr Cable had asked for an update on the progress of the case but insisted he was "not seeking to influence the outcome" of the legal process.

What Vince Cable seems to have in mind is the possibility of using his department's power to ban individuals from being company directors - not only in senior financial jobs, but in any company.

And he feels constrained in taking action on that - either through criminal or civil action - while the Crown Office investigation drags on.

If he's going after that, it shouldn't only be the former bosses at RBS who should be on their guard against a renewed humiliation.

The regulator has yet to follow up on the Banking Standards Commission with its own report into HBOS.

But the head of Scotland's public prosecution service - Lord Advocate Frank Mulholland - hit back, questioning why Mr Cable had written to Lord Wallace rather than the Crown Office.

Mr Mulholland said: "It would be unfortunate if this were to be construed as attempted interference with independent investigation and prosecutorial decision-making by the law officers.

"Crown Office officials have kept BIS (Department of Business, Information and Skills) officials appropriately advised of progress throughout the investigation, and confirmed on several occasions that in Scotland it is the Lord Advocate who is the sole prosecuting authority and that he acts independently in the public interest."

The lord advocate added that investigations of allegations of criminality should investigated by the Crown Office and Procurator Fiscal Service and "not communicated through the media".

RBS insolvency

RBS, which has its headquarters in Edinburgh, needed a £45.5bn taxpayer-funded bailout in October 2008.

In December 2011, a report by banking regulator the Financial Services Authority (FSA) said RBS, which owns Nat West and Ulster Bank, was brought to its knees by "multiple poor decisions" and a £50bn "gamble" on buying Dutch bank ABN Amro.

The report shone a light on the poor relations between the FSA and RBS and said chief executive Fred Goodwin's "assertive and robust" management style was flagged as a potential risk as early as 2003, four years before the disastrous ABN Amro deal.

In January 2012, a month after the FSA report, Mr Goodwin was stripped of the knighthood he was awarded for services to banking.

Months later, the Crown Office confirmed an investigation had been under way for some time because of "the degree of public concern about recently reported issues in the banking sector".

Earlier this month more than 12,000 private shareholders and 100 institutional investors raised a class action against the bank.

It relates to a £12bn rights issue by RBS in 2008 to shore up its balance sheet after its disastrous acquisition of ABN Amro.

Mr Goodwin is among those named in the action, along with ex-chairman Sir Tom McKillop and senior figures Johnny Cameron and Guy Whittaker.

Fred Goodwin Mr Goodwin was in charge of RBS in the run-up to its near collapse in 2008

Media interest

In his letter to Lord Wallace, Mr Cable had said: "There is, as you will know, considerable public concern about the actions of the directors of RBS prior to its insolvency.

"Following the release of the FSA's report into the failure of RBS I sought legal advice on what if any enforcement action was appropriate and was advised that the Crown Office and Procurator Fiscal Service (COPFS) should consider a possible prosecution.

"Given that this matter was referred to them in January 2012, I am very keen for a decision to be reached as quickly as possible in order to maintain public confidence in the efficiency of the decision-making process."

Mr Cable added that "public and media interest in the banking sector and RBS have not dissipated".

However, Lord Mulholland said the investigation was "complex and ongoing" and the volume of material being considered was "vast".

He added: "If the Secretary of State contacts me directly I would be happy to brief him on progress to date and timescales."

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