NatWest faces £250mn lawsuit over alleged Rockfire payment failures tied to Thurrock scandal

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NatWest faces £250mn lawsuit

Highlights

Rockfire Capital Limited and Rockfire Investment Finance are suing NatWest's RBS for £70mn and £179mn plus interest over alleged unauthorised payments benefiting Liam Kavanagh personally.
Liquidator's report notes £400mn passed through Rockfire accounts between 2017 and 2020, with significant funds redirected to overseas third parties without apparent business benefit.
Thurrock Council's £398mn investment in the Toucan Group between 2017 and 2020 contributed to £1.3bn debts and £275mn expected losses, deepening scrutiny of council commercial investment strategies.

Court claims target bank's handling of payments

As reported by the Financial Times, court documents reviewed by the newspaper show that Rockfire Capital Limited and Rockfire Investment Finance are pursuing RBS to recover £70mn and £179mn respectively, plus interest, after both companies entered liquidation in 2023.

The claims allege that RBS processed payments that were not properly authorised and that benefited businessman Liam Kavanagh personally rather than the companies. The documents say the transactions included spending on luxury cars, a yacht and an aircraft, and also allege that two other directors instructed unauthorised payments.

Rockfire Investment Finance further argues that the bank handled payments when the company "was bordering on insolvency or was insolvent" and says RBS had a duty to block transactions that were potentially fraudulent. A liquidator's report released in April says about £400mn passed into the company's accounts, but "material amounts" were then sent to third parties in the UK and overseas, including Spain, Romania and the U.S., between 2017 and 2020 without appearing to benefit the business.

NatWest declines to comment on the allegations in detail but says it will defend itself against both cases. A spokesperson for Kavanagh, who is not a party to the RBS litigation, says he "strenuously denies" allegations made by Thurrock Council and will contest them at trial.

Thurrock fallout deepens pressure on local authority investment model

Both Rockfire entities sit within the Toucan Energy Group, which acquired, developed and operated solar farms across the UK. Rockfire Investment Finance served as a fundraising vehicle, collecting investor money for special purpose vehicles that bought and developed solar projects, while Rockfire Capital also formed part of those fundraising operations.

Thurrock Council invested £398mn into the Toucan Group between 2017 and 2020 in exchange for renewable bonds, but the investments later deteriorated. The council effectively declared bankruptcy in 2022 after building debts of £1.3bn and acknowledging expected losses of £275mn tied to those investments.

In 2024, the council told a court it had increased its exposure on the basis of "fraudulent misrepresentations", and the broader matter is being investigated by the Serious Fraud Office. Court documents have previously accused Kavanagh of diverting council-linked funds to buy a £13.7mn yacht, a £9.1mn Bombardier jet and a £20.75mn country estate in Hampshire.

The dispute also highlights the wider financial strain on UK local authorities that have turned to commercial investments since the financial crisis to bolster income after reductions in central government funding. Several councils, including Woking, Croydon and Birmingham, have since run into severe financial difficulty and issued section 114 notices.

Our earlier article on EchoStar’s Dish DBS Chapter 11 filing explained how the pay-TV unit and related wireless subsidiaries sought bankruptcy protection to manage near-term debt maturities and maintain operations. We noted that the restructuring was driven by a looming notes repayment deadline and constrained liquidity after delays around a planned spectrum transaction, while Dish Wireless’s 5G network activities were set to be wound down under the plan.

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