Will tainted HBOS bosses finally be made to pay?
FORMER bosses of HBOS face a lifetime ban from the City after regulators launched a belated probe into their role in the collapse of the High Street giant more than seven years ago.
In a joint statement, the Financial Conduct Authority and the Bank of England’s stability watchdog the Prudential Regulation Authority said they had ‘decided to start investigations into certain former senior managers’.
They added: ‘These investigations will determine whether or not any prohibition proceedings should be commenced against them.’
The watchdogs said they would also trawl through evidence to determine whether to investigate other individuals.
Labour MP John Mann, a member of the Treasury Select Committee, last night described the probe as ‘better late than never’ but pointed out a ban would be irrelevant to some of the key bosses as they no longer work in the financial services industry.
He said: ‘Regulators are bowing to pressure and doing what they should have done many years ago. Those found culpable are not fit to hold a senior job in any company.’
Andrew Tyrie MP, Tory chairman of the influential Treasury committee, added: ‘Overdue doesn’t capture it. It is eight years since the collapse of HBOS in 2008. It has taken a heap of pressure from Parliament to secure appropriate action from the regulators.’
Former bosses will also escape a fine even if they are found culpable because regulators took so long to launch their investigation.
The blundering Financial Services Authority – which has been replaced by the Financial Conduct Authority – had to mount a probe within three years of the collapse of HBOS in 2008 to be legally allowed to fine individuals.
Although the names of those being investigated were not identified yesterday, they will include individuals criticised in a withering report by top barrister Andrew Green.
Published in November, he suggested more than ten former managers should be investigated, including former HBOS chief executive Andy Hornby, his predecessor James Crosby and former chairman Dennis Stevenson. Others in the firing line could include former finance chief Mike Ellis, who is now chairman of Skipton Building Society. Lindsay Mackay, head of HBOS’s treasury division, was also criticised. He is currently a director of the London arm of Alpha Bank.
Hornby is among those who will not be too worried about a City ban – he is now chief operating officer of bookmaker Gala Coral and will take up the same position when it merges with rival Ladbrokes.
Most of the individuals criticised in Green’s report now work outside the financial services sector. They include former group risk director Peter Hickman who is now finance chief at law firm Linklaters, and former finance director Philip Hodkinson who is on the board of BT. Lord Stevenson sits on the board of bookseller Waterstones.
Just one former executive has been punished. Peter Cummings, who ran Bank of Scotland’s corporate lending division, was fined £500,000 and banned from the City. He complained bitterly of being made a ‘scapegoat’ for the downfall of HBOS – a view endorsed by Green.