An RBS spokesman said: “The Priory has entered into sale and lease back
agreements with a number of investors. All agreements were approved by the
Priory’s board at market rates with the details fully disclosed to all
bidders. The CEO absented himself from board decisions in which he had a
separate interest.”

Mr Scott, a former male nurse from Belfast, was formerly chief executive of
nursing homes group Southern Cross before joining the Priory in 2008.

The rehab clinic, famous for treating celebrities such as Kate Moss and Robbie
Williams, had more than £789m of debt at the end of 2009, according to its
latest accounts. Advent paid less than RBS’s initial asking price of around
£1bn after rival private equity firm Bain Capital walked away from the deal
at the eleventh hour.

In its stock exchange announcement RBS said that after the settlement of
outstanding debt, it expects to receive only £133m in cash.

Last week the bank, bailed out by the taxpayer in 2008, admitted that
commercial arrangements existed between Mr Scott and the Priory but declined
to give details.

The state-controlled bank inherited The Priory, which has about 50 mental
health hospitals and care clinics, after its disastrous acquisition of ABN
Amro, the Dutch bank, in 2007.

In 2009, the Priory planned to merge with care operator Four Seasons when the
latter, in which RBS was also a shareholder, struggled to cope with its debt
mountain. Deal talks were eventually abandoned due to the difficulty in
negotiating terms.

Lord Ashcroft, the former deputy chairman of the Conservative party, owned a
small stake in the Priory.

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