Clifford Chance (CC) could face an investigation from the Solicitors Regulation Authority (SRA), following an allegation that it overlooked a claim of fraud during a review it carried out into lending practices at Royal Bank of Scotland's (RBS) turnaround division.

The magic circle firm was called in to review RBS's global restructuring group (GRG) in 2013 after claims that the bank had mistreated thousands of small companies. While CC's report into the division's lending practices, published in April 2014, was critical of the bank it found no serious wrongdoing.

One of the former GRG customers interviewed by CC for the report, however, complained to the SRA about the magic circle firm in 2015 and 2016, alleging that the firm overlooked a claim of fraud.

Clive May, the owner of a bricklaying business who was one of 138 people interviewed by CC  for the review, claims to have presented evidence to the firm that GRG was abusing the government's Enterprise Finance Guarantee (EFG) scheme, which he believes was overlooked.

May claims that an EFG loan was used in order to reduce his company's overdraft from £245,000 to £70,000, before his company failed in 2013. He further alleges that an RBS relationship manager asked him to remove a second home from his EFG application form as the property would have disqualified him from the government loan – information he gave to CC.

Speaking to Legal Week, May said: "Clifford Chance turned around after the interviews and said 'there is nothing in the evidence you have given us that we should include in the report'. It was a whitewash. I have complained twice to the SRA about Clifford Chance and my complaint has now been reopened."

GRG closed in 2013 and has also been under investigation by the Financial Conduct Authority (FCA) which found evidence of serious misconduct.

An SRA spokesperson said: "We can confirm we are likely to investigate, but are unable to comment any further." The potential investigation was first reported by The Times today (29 May).

CC's report into RBS previously came in for criticism from the author of the report that instigated the probe. The report (but not CC) was also criticised by the Treasury Select Committee in 2015, which argued that it was "not independent".

In 2017, the SRA opened an investigation into CC over its controversial role in the long-running Excalibur case. The firm faced significant scrutiny over its role in the $1.6bn case, which was brought by Excalibur Ventures, an aspiring oil exploration firm, against two US oil companies – Gulf Keystone Petroleum and Texas Keystone.

CC was contacted for comment.