The Times James Hurley Enterprise Editor 16-9-2015
Today, parliament will discuss the implications of professional services firms providing staff, sometimes free of charge or at a generous discount, on lengthy work placements to high street banks’ restructuring departments.
The debate is expected to feature the relationship between Lloyds and Alder King, a Bristol-based commercial property consultancy that was the subject of a RICS adjudication in February.
RICS found that an Alder King worker had accepted an appointment to foreclose on a Lloyds business borrower’s property at the same time as he was working on secondment at the bank.
An instruction letter for this same receivership work from the bank was written by another Alder King staff member, also on secondment at Lloyds.
RICS carried out what it called a “thorough investigation” into the issue. It found that “at the time of the appointment . . . [the Alder King worker] was still on a part-time secondment at Lloyds”, but it concluded that there was no evidence of misconduct by the Alder King employees.
During a select committee hearing into secondment in the insolvency industry in March, Eve Salomon, chairwoman of the RICS Regulatory Board, suggested that secondees should not take receivership appointments while on work placements.
Ms Salomon said: “Where somebody might be a secondee in a bank, advising the bank, and then subsequently — it would not be at the same time, it would be subsequently — is appointed as a fixed-charge receiver, that could potentially raise issues of conflicts of interest, but those matters are dealt with by professional codes.”
Other witnesses, including the Insolvency Service, agreed that secondees should be providing hands-off guidance only and should not work on insolvencies involving their client at the same time.
The RICS adjudication rejected allegations of any “corporate collusion” between Lloyds and Alder King or that the latter had failed to avoid a conflict of interest. It found that Alder King “is meeting the standards in all respects”.
Alder King and Lloyds deny any wrongdoing or conflict of interest. The bank reportedly revised its internal guidance on secondments in the wake of complaints over this case.
It is standard practice for professional services firms, including accountancies, law firms, property surveyors, regulators and banks, to share staff on secondment placements.
A RICS spokeswoman denied that there was any contradiction between Ms Salomon’s evidence and the findings of its Alder King adjudication.