Business Irish

Tuesday 26 September 2017

Lavin claims that Ulster Bank set out 'to shut down viable companies'

Jackie Lavin at Leinster House. Photo: Tom Burke
Jackie Lavin at Leinster House. Photo: Tom Burke
Kevin Doyle

Kevin Doyle

Ulster Bank used a controversial scheme set up to deal with recession-hit companies to "shut down viable businesses in a property grab strategy", Jackie Lavin has claimed.

The well-known businesswoman told an Oireachtas committee that the bank's Global Restructuring Group Ireland (GRGI), which was established to work with SMEs that borrowed between €1m and €25m, "ruined families" by "deliberately targeting" distressed businesses.

Ms Lavin said that Glencullen Holding, which she ran with her partner and former 'The Apprentice' boss Bill Cullen, entered GRGI in 2011 - but immediately the bank "started to squeeze the cash flow".

She claimed the bank forced them out of business, called in a receiver and "took everything... leaving us nothing to fight them with".

"This systematic abuse of customers is mirrored across all the other businesses we spoke to all across the country," she said. She is now part of an action group representing 60 SMEs that believe they were treated unfairly.

"GRGI was sold to business owners under the guise of the bank taking a special interest in the company in a caring partnership arrangement. Businesses did not suspect it was a purpose vehicle designed to take down the company.

"Firms that had never missed a loan payment were pushed into GRGI under the bank's secret policies for reasons that had nothing to do with financial distress," Ms Lavin said.

However, in a statement to the Irish Independent, Ulster Bank disputed many of Ms Lavin's points.

"During the period 2008 to 2013, Ulster Bank granted extensive forbearance to the vast majority of the customers managed in GRGI," the bank said.

"This reflected the primary goal of the bank to support customers who might return to viability when the recovery started to emerge.

"In line with the process under way in the UK, Ulster Bank is making the same supports available to our SME customers in GRGI during that period.

"Ulster Bank strongly rejects any claims that businesses in GRGI were artificially distressed by GRGI and a number of independent reports have supported this conclusion."

Irish Independent

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