North East Wales

Builder Clive May to sue RBS for 'mis-sold' loan

Media playback is unsupported on your device
Media captionMr May's firm was involved in building the Welsh government's Llandudno Junction HQ

A Flintshire builder whose company went under after he claims the RBS mis-sold him a government-backed loan is to sue the banking group.

Clive May's firm ceased trading five days before Christmas 2013 with the loss of 17 staff and 13 sub-contractors from the Mold firm.

There are now calls for a review of the Enterprise Finance Guarantee (EFG), which helps small businesses obtain funding they may not get elsewhere.

RBS said they could not comment.


Mr May's firm, C May Brickwork, had been operating over 30 years before it was forced into liquidation because of cash flow problems.

He blames the bank for advising him to reduce his £245,000 overdraft to £70,000 and replace it with a government-supported EFG loan of £150,000.

He says he understood the terms of the loan meant he would be liable for only 25% of the debt if his company failed and was not told that he would effectively be responsible for the full amount.

He also claims that he was asked to remove details of a second home, offered as security, from the loan application in order to avoid being disqualified from obtaining the EFG funding.

"If we hadn't lost our overdraft on the back of a mis-sold loan, we'd still be trading," said Mr May.

"I left school without any qualifications and built a company with a turnover of £2.6m, and a first-class reputation.

"We were involved in building the Welsh government's north Wales headquarters at Llandudno Junction, buildings at Parc Menai in Bangor, retail premises in Wrexham and work at the Carden Park hotel near Wrexham.

"To go from that to telling people you're going under is terrible. The emotional toll has been huge."

Mr May has instructed lawyers to claim damages from RBS.

Internal review

Image copyright Jonathan Wilkins
Image caption Mr May's firm was involved in building the Welsh government's Llandudno Junction HQ

An RBS spokesman said they were prevented from making any comment on the case because of the legal situation.

However, it is understood that an internal review carried out by the bank found that only a "small number" of customers had been misinformed about the EFG loan scheme and that it is not an endemic issue.

The bank said in a statement: "RBS has helped over 8,000 SMEs, which would otherwise have struggled to obtain finance, access lending through this government scheme. We work with our customers to explain the finance they are applying for and inform them of the terms."

Mr May's MP, David Hanson, has written to UK Business Secretary Vince Cable calling for a full review of the scheme and North Wales AM Mark Isherwood has also taken up the case.

Mr Hanson recently arranged a meeting at Westminster with Mr May, RBS executives and others involved in the case.

With a number of other businesses across the UK complaining that banks have mis-sold and abused the government's EFG loans scheme, it's understood that the Serious Fraud Office is considering whether to launch a wide-ranging investigation.

Related Internet links

The BBC is not responsible for the content of external Internet sites