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Vedanta Hedging’s client which was a victim of RBS swap mis-selling, was recently interviewed by Martin Arnold and Emma Dunkley from the Financial Times.
Wenta, a not-for-profit enterprise agency from Watford, which has helped steer countless start-up companies into profitability in the past three decades now faces a financial downfall due to a complex financial product sold to it by the Royal Bank of Scotland and NatWest banks.
Wenta provides advice, counselling and training to start-up companies and small businesses, and premises for small businesses at Colne Way, Watford; Electric Avenue, Enfield; Cranborne Road, Potters Bar; and Bessemer Drive, Stevenage. According to an article that recently appeared on the Financial Times (FT), its former chairman and now acting chief executive, Chris Pichon claimed that Wenta was mis-sold an interest rate hedging product (IRHP) derivative in 2009 which caused it to suffer financial losses of around half a million pounds.
Wenta’s £500,000 claim, which is heading for the High Court in October, is one of dozens of such cases against RBS. Commenting on their court case Mr Pichon told FT,
“Their behaviour has hardened our attitude to expose them and make them pay up in compensation.”
In Mr Pichon’s words this was “a corporate position of bullying” where RBS turned down his application for compensation for the mis-sold derivative that was unsuitable for a small company that had only £5m revenues and 45 staff.
Leading derivatives expert, Mr Abhishek Sachdev, of Vedanta Hedging added that,
“RBS did not adequately explain the risks of the swap , particularly with respect to the risks of contingent liabilities and breakage costs.”
Further Mr Sachdev commented that if Wenta had been provided with clear instructions and information to fully understand the complexity and risks of the swap, it may have not hedged or may have taken out a simpler risk-free hedge.
With more such financial product mis-selling cases surfacing, we urge everyone to be vigilant to analyse the financial products offered to them by their banks and if you feel like you have been wronged or would prefer to get an expert opinion on your situation feel free to contact our experienced advisers at Vedanta Hedging.
A Wenta lawyer said RBS often took a tougher approach than other banks to complaints by small businesses. Ali Akram of LexLaw, said: “This is their strategy in every single case. They drag it out as much as they can.” Ross McEwan, chief executive of RBS, said: “I refute that.” He added: “We would love them to go as quick as the courts would move. I have no desire to hang on to these things.”
You can read the full FT article below (pages 12-13) FT Wenta article
The solicitors for Wenta are Lexlaw solicitors.
