The U.K. is moving forward with plans to develop a dispute resolution service (DRS) for small businesses (SMBs) mistreated by banks, but reports in the Financial Times said the head of that initiative is now facing accusations of a conflict of interest.
The publication said on Thursday (June 20) that Conservative MP Kevin Hollinrake may have a conflict of interest. He is chair of the All-Party Parliamentary Group (APPG) for Fair Business Banking and Finance, which has joined the initiative to create the dispute resolution service in the wake of scandals revealing mistreatment of SMBs by banks. The committee to develop the DRS also includes banks, trade bodies and lobbyists.
According to reports, Hollinrake is involved in a lawsuit against a bank working with the government on the dispute resolution service. However, the MP is reportedly not willing to step down from his position, though he noted plans to recuse himself from any activity by the committee that is directly related to the legal case.
Reports noted that the legal case involves a dispute against CYBG. A group is suing the financial institution and its former owner National Australia Bank over controversial, tailored business loan products. Hollinrake is one of the largest shareholders in real estate firm Hunters Property Group, one of the businesses that joined the group suing CYBG.
The APPG joined the DRS group in March, during which time Hollinrake revealed the potential conflict of interest. Reports said concerns have been raised about that conflict by bank and treasury officials, who questioned why Hollinrake did not disclose the conflict in November when the APPG was first asked to join the DRS initiative.
“The fear was this wasn’t something that was being pursued purely on the grounds of developing better public policy,” said one unnamed banker. “There was a perception that some people involved might have something to gain.”
However, Hollinrake sent a letter to Lewis Shand Smith, the DRS committee’s independent chair, noting that “the vast majority of DRS cases would not have any connection” to the legal dispute in which he is involved.