Bischoff’s £8bn misjudgement over Dubai
December 2nd, 2009
Sir Win Bischoff, the chairman of Lloyds Banking Group and a past chairman of US bank Citigroup, is clearly a man who is easily misled.
In December 2008, soon after Citigroup was bailed out by US taxpayers — from whom it received a $306bn ‘undisguised gift’ last autumn — Bischoff signed off an $8 billion ($8,000,000,000) loan to Dubai and various Dubai-based entities, even though bling city’s economy was already well-known to be teetering on the brink of financial collapse.
In a statement at the time, Bischoff (pictured above) said: “This is in line with our commitment to the U.A.E. market in general, and reflects our positive outlook on Dubai in particular.”
For more information on this particular loan, read Andrew Ross Sorkin’s Dealbook blog published by the New York Times. One also wonders whether the $8bn facility was some sort of quid pro quo for Abu Dhabi taking a 7.5% equity stake in Citigroup in November 2007.
My question is this: if Bischoff displayed such abysmal judgement then, why should the UK government trust him to sort out the mess that is Lloyds Banking Group now?
Is the Anglo-German ex-Schroders executive going to be any more careful with British taxpayers’ money than he was with American taxpayers’ money when presiding over Citigroup?
Things I’d like to know more about include:-
- Why is Bischoff using the services of a company named Taga Advisory, set up by former Bank of Scotland Corporate senior executive Tom Angus in October 2008, to value all the “assets” on Peter Cummings’s £116bn loan book? How objective does Bischoff believe that Mr Angus is going to be when it comes to valuing these assets?
- Is Bischoff really going to allow Graeme Shankland, head of special assets at Lloyds Banking Group, to buy out — at firesale prices — the dodgy “private equity” portfolio that Shankland assembled when he ran the integrated finance unit at HBOS (i.e. is Bischoff going to allow Shankland to profit from his own incompetence at the expense of UK taxpayers and Lloyds’ shareholders)?
- How worried is Bischoff that, after years of tawdry cover-ups and sickening persecution of the victims, the Bank of Scotland Reading debacle is about to be fully exposed?
Given his largesse to the already bankrupt Dubai last December, nothing would surprise me about this chap.
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The whole thing is a sick joke. People like Bischoff and his chums seem to have had no restraint what so ever when it came to lending millions or even billions to city slickers (from all sorts of City’s) and that money -– which has, for the most part, gone down the pan -– has come directly from the average tax payer. And what consequence to those people in charge of this mess? They simply move to top jobs in other banks or to a chemist near you.
But the number of people crippled by the actions of these supposed financial brains is outrageous and I include ordinary bank staff who are being booted out like old potatoes. People have lost their savings, their pensions, their jobs and their businesses –- and all the bankers do is bleat about the idea anyone would curtail their bonuses. Here are two news articles from yesterday that show the level of lunacy the banking world has reached:
1. Bankers are feeling so unloved, unwanted and persecuted by the public, they are having to have more affairs. One banker blamed it partly on peer pressure and said having a mistress is like having the right car – you’ve simply got to have one. REALLY – well I hope you all get the pox!http://tinyurl.com/ykevo9p
2. Goldman Sachs bankers in the US are buying guns to protect themselves against what they see as the savage masses. http://tinyurl.com/yz2akds One blog I read on this made the very good point that the last time the public got this angry with Bankers they simply dragged them from their offices bodily and strung them up on lamp posts. It also made the point there aren’t many lamp posts in Manhattan – but we still have them in London! I don’t suggest it will come to that (do I?) but the fact the US bankers would even consider buying guns says a lot about how far this whole banking crisis has come and I wonder what the UK bankers are going to use as protection? Handbags?
As for the question of whether Mr Bischoff is worried about the HBOS Reading scandal being exposed, I think it’s entirely possible he doesn’t give a t**s – but, given the level of interest in the FSA Investigation of HBOS Reading by some very senior politicians, he may be forced to change his views on that in the near future.
The senior bankers at Lloyds Banking Group seem to think HBOS Reading was small potatoes and not worthy of their attention (well we are only talking up to a billion here albeit from one office). But in today’s climate, many people will be genuinely offended by what happened at Reading -– and not least because the Prime Minister was told about it, in detail, in October 2008 at exactly the same time the Bank of England handed HBOS £25.4bn of taxpayers money in secret. One also might have thought that a major fraud at HBOS and against its own customers, is another thing Lloyds shareholders should have been told about before they voted on the merger.