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Starling CEO threatens legal action over Agnew fraud allegations

Starling CEO threatens legal action over Agnew fraud allegations

Starling Bank CEO Anne Boden has threatened legal action against former anti-fraud minister Lord Agnew over his allegations that the bank used the Government's Covid loan scheme as a "God-sent opportunity" to swell its balance sheets without conducting adequate checks on the ability of loanees to repay the debt.

In his statement at aconference last week, Agnew singled out Starling Bank as one of the worst offenders when it came to validating the turnover of businesses or submitting suspicious activity reports.

“With minimal data, I cannot analyse the full extent of the misdemeanours, but I’d like to call out one of these banks that I believe has acted against the government’s and taxpayer’s interests: this is Starling Bank,” he said.

Introduced to cover the devestating effects of the Pandemic on small busines, the bounce back loan scheme relied on UK banks to distribute £47 billion pounds of taxpayer money to distressed businesses, backed by a 100% Government guarantee that it would cover the losses if borrowers failed to repay.

Agnew pointed that prior to the pandemic, Starling had only lent £23m. By June 2021, according to a company trading update, it had distributed £1.6bn worth of bounce back loans.

The bank disbursed a further £640m under the larger Coronavirus Business Interruption Loan Scheme, which offered up to £5m per borrower.

“It seems to me that they took this as a God-sent opportunity to swell their balance sheet by a factor of 50 times in barely less than a year, with no risk to themselves and 100% risk to the taxpayer,” Agnew said, billing the bank's actions as a “cost-free marketing exercise to build their loan book and so their company valuation”.

Agnew has since doubled down on his initial comments, infuriating Starling chief Boden, who has threatened legal action if he does not retract his statement.

“Your statements are defamatory, and I must ask you to withdraw them,” Boden wrote in a letter seen by the Times newspaper. “You say that you have no information to support your accusations, but you continue to repeat them despite Starling making it clear that you are wrong.”

Boden derided Agnew as a "public school-educated landed gentleman" who had "made a fortune from offshore outsourcing".

“Starling reserves all its rights in relation to your defamatory statements,” she continued, accusing him of trying to rid himself of personal responsibility over the scale of fraud perpetuated through the Government-backed Covid loan programme.

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