Key facts
- Natwest's subsidiary, Royal Bank of Scotland, is facing a lawsuit seeking over £250 million.
- The lawsuit is tied to the collapse of Rockfire Group and a scandal involving Thurrock Council.
- Liquidators allege RBS processed unauthorized payments benefiting businessman Liam Kavanagh.
- The funds were allegedly intended for solar farm bonds to finance energy infrastructure for Thurrock Council.
- Kavanagh is accused of using the funds for personal luxury purchases.
- Natwest stated it intends to defend itself against the allegations.
Natwest is facing a lawsuit totaling over £250 million from liquidators of Rockfire Group, an investment firm that collapsed following a scandal involving Thurrock Council. The lawsuit, filed against Natwest's subsidiary Royal Bank of Scotland (RBS), alleges that RBS processed unauthorized payments that benefited businessman Liam Kavanagh, who controlled Rockfire.
Rockfire Group is under investigation by UK fraud authorities for selling risky solar farm bonds to Thurrock Council, which subsequently went bankrupt in 2022. The liquidators of Rockfire Capital and Rockfire Investment Finance are seeking to recover £70 million and £179 million, respectively, plus interest from RBS. These funds were reportedly intended to finance a network of solar farms.
The legal action claims that Kavanagh, who allegedly lacked authority to approve the payments, used the funds for luxury purchases such as cars, a yacht, and an aircraft, rather than for the intended energy infrastructure projects. A liquidators report indicated that approximately £400 million flowed into Rockfire's bank accounts, with material amounts also paid to third parties between 2017 and 2020.
Rockfire Investment Finance asserts that RBS authorized these payments while the company was bordering on or already insolvent, arguing that the bank should have blocked potentially fraudulent transactions. The Serious Fraud Office (SFO) is also investigating Thurrock Council's bankruptcy, which left it with a £1.5 billion debt burden.
Natwest has stated its intention to defend itself against both legal cases. Liam Kavanagh has reportedly denied the allegations and plans to contest them in court.