Lloyds’ victory in £650m action

THOUSANDS of Lloyds shareholders yesterday lost a multi-million pound action against the lender over its takeover of HBOS during the financial crisis a decade ago.

Nearly 6,000 investors claimed they were “mugged” by being misled about the financial health of HBOS before voting to approve the deal, which led to Lloyds being forced to accept a £20billion taxpayer bailout to stay afloat.

The Government bought a 43 per cent stake and Lloyds was only restored to full private ownership in 2017.

The shareholders had sued Lloyds Banking Group and five former directors, including former chairman Sir Victor Blank and ex-chief executive Eric Daniels, claiming damages of up to £650million for alleged losses.

But Lloyds put forward evidence that the claimants suffered no loss as a result of the matters they allege.

Lawyers for the bank argued that the case was “entirely devoid of merit” and “fundamentally flawed at every level”, and a judge yesterday dismissed the action.

A Lloyds Banking Group spokesman said: “The group welcomes the court’s decision. Throughout this process, the group has sought to act in the interests of our shareholders as a whole.” Damon

Parker, founder and partner of law firm Harcus Parker, representing 300 institutions and nearly 6,000 individuals in the case, said: “Our clients are deeply disappointed by today’s judgment.

“They wish to assess their options and will be considering whether to appeal.”

Wayne Kitcat, a member of the clients’ committee bringing the action and a former Lloyds executive, said: “The decision of the judge is a bitter disappointment to thousands of Lloyds shareholders, many of whom have been left destitute by the acquisition of HBOS by Lloyds.

“This includes many thousands of Lloyds employees who were persuaded to put money into the Lloyds SAYE scheme to buy Lloyds shares, and relied on senior management’s recommendation to do so.

“It makes no sense to us that the judge acknowledges that material information ought to have been disclosed, but does not believe that the Lloyds board deliberately concealed it, or that it made any difference.”

Mr Kitcat added: “We hope that a higher court will come to a different conclusion as we are determined to continue this legal battle.”