HBOS ‘secret’ loans on trial
Bank bosses ‘concealed’ information
FIVE former Lloyds’ bosses face a High Court grilling over alleged “secret” loans handed to HBOS at the height of the financial crisis.
Ex-chief executive Eric Daniels and chairman Sir Victor Blank are among those due to give evidence in a case brought by 6,000 Lloyds’ shareholders who say they lost a packet after the £12billion takeover of crippled HBOS in 2009.
The five bigwigs, who also include Lloyds’ finance boss Timothy Tookey, Helen Weir, then head of its retail bank, and Truett Tate, who ran its wholesale arm, face claims of “concealing” vital information prior to the deal.
That includes a “covert” £10billion loan facility from Lloyds to HBOS, plus emergency funds from the Bank of England and America’s Federal Reserve to keep HBOS afloat. The shareholders, who include Lloyds staff, were allegedly encouraged to buy shares in the run-up to the takeover, and claim they were misled.
Lloyds’ share price collapsed from 279p in September 2008 before the takeover was announced, to 44p in late January 2009 after it completed. The dividend was later scrapped. Shareholders, represented by law firm Harcus Sinclair UK, claim they were “sacrificed in order to save HBOS from insolvency and/or full nationalisation”.
All five defendants and the Lloyds Banking Group deny the allegations.
Defence papers filed at the High Court argue shareholders had “sufficient information” before backing the takeover.
It adds: “There is no factual basis to support the very serious allegations”. The case was due to start next week but has been delayed until mid to late October.