Entrepreneurs ‘ruined by HBOS fraudsters’ take Lloyds to court
LLOYDS is facing two high-profile legal battles with entrepreneurs who say they were ruined by corrupt bankers at its infamous HBOS Reading branch, The Mail on Sunday can reveal.
The banking group – which bought HBOS in 2008 and so is liable for its past misbehaviour – was slammed earlier this month for botching a compensation scheme set up for victims of HBOS Reading, who included TV star and businessman Noel Edmonds.
Now two entrepreneurs who had already lost faith in the scheme have launched multi-million pound claims in the High Court. If they are successful, Lloyds could face a string of new legal actions.
Lloyds launched its HBOS Reading compensation review in 2017 after two former bankers and four others were jailed for running a scam which involved businesses being run into the ground for their own financial gain.
Corrupt bankers accepted bribes in exchange for driving struggling firms to Quayside Corporate Services, a firm that purported to be a turnaround specialist and which charged extortionate fees.
In one of the upcoming High Court cases, businessman Gary Wells – the former majority shareholder of leisurewear brand Kangaroo Poo – is suing Lloyds after his company was forced into administration.
Wells, who is represented by lawyers from DaySparkes, claims that HBOS Reading fraudsters ‘conspired’ to ensure that Kangaroo Poo ‘did not return to good financial health and profitable trading’ after experiencing financial problems. He alleges that the bankers forced it into administration for ‘personal gain’.
Following the administration in 2005, Kangaroo Poo was bought by Quayside Corporate Services.
Wells was retained at the firm, but was made redundant in 2006.
He has not specified exactly how much he is claiming, but says he believes his shareholding in Kangaroo Poo would have grown to £4.8million by 2010 and that – if he had not been burdened by the ‘stigma’ of being connected to a failed business – he could have earned £1.6 million extra income in the following years. Wells also said the saga resulted in him being forced to sell his Devon home.
Joanne Dove – who is also represented by DaySparkes, which is run by lawyers John Day and Michael Sparkes – is also suing Lloyds.
Dove, from West Sussex, was forced to sell her ecological nappy company for a fraction of its value after being caught up in the HBOS Reading fraud.
Earlier this month, Lloyds pledged to reopen compensation claims relating to HBOS Reading after an independent review by former High Court judge Sir Ross Cranston found that its original scheme was ‘neither fair nor reasonable’.
Both the Wells and Dove legal claims were filed earlier this year, before Cranston’s report. Therefore they have the possibility to restart compensation talks with Lloyds outside of the court.
A Lloyds spokesman said: ‘We are in contact with Mr Wells following the publication of Sir Ross Cranston’s report into the customer review and its recommendations, including that customers should be allowed to opt into a review to reassess any direct and consequential losses that flowed from the fraud.’