It’s time Gordon Brown and Lloyds came clean on HBOS
January 9th, 2010
A multimedia campaign was launched yesterday on twitter and Facebook to try to persuade Eric Daniels, the chief executive of Lloyds Banking Group, to see sense. There’s also a powerful new website, STOP HBOS.
Already this evening more than 300 people have joined the STOP HBOS group on Facebook and I suspect numbers will grow as people across the UK are appalled by the behaviour of this most sociopathic of banks. Please join the Facebook group if you want to lend your support to the campaign. It doesn’t take long.
Having bankrupted itself through its own delusional thinking, greed, hubris and naivete (I could add other words here but won’t) the bank is now seeking to make the rest of us pay for its mistakes.
One example is that a couple whose music publishing business Zenith was ruined as a result of a fraud committed by the bank’s Bank of Scotland Corporate arm are due to face their 18th eviction hearing at the hands of the bank in Cambridge County Court later this month.
However, the sole reason that Paul and Nikki Turner are unable to keep pace with their mortgage payments is because of the way in which they were treated by BoS Corporate (acquired by Lloyds TSB as part of its HBOS transaction last year) and by the bank’s preferred “turnaround consultancy” Quayside Corporate Services.
The episode formed part of the BoS Reading scandal which I’ve been tracking since September 2008, and on which I helped produce the BBC ‘File on 4’ documentary last year. Even though some 32 companies were extinguished as a result of the scam, the bank continues to bury its head in the sand and pretend it has done no wrong.
The immediate goal of the ‘STOP HBOS’ campaign is to persuade Daniels and Lloyds to call a halt to further eviction hearings — at least until the FSA concludes its investigation into the scam. It’s really no more complicated than that. Other goals are expected to follow once this short-term goal has been achieved.
There are certain aspects of this scandal, for which former BoS director of high-risk Lynden Scourfield has to some extent been scapegoated by the bank, that I find deeply troubling.
One is that it has exposed the utter uselessness of the regulatory system for finance we have in this country. The main City regulator, the FSA claims to have conducted an “investigation” into the BoS Reading fraud in 2007. It concluded that HBOS had done nothing wrong. How could this have been?
Was it because the ‘Fundamentally Supine Authority’ at that time only gave credence to disingenuous and miscreant bankers and didn’t bother listening to — let alone asking questions of — anyone else? Why did it not question directors of the 32 companies whose businesses were destroyed by the fraud?
One wonders whether the presence of Sir James Crosby, who stepped down as HBOS chief executive in June 2006, on the regulator’s board as deputy chairman at the time of the ‘investigation’ had anything to do with its lack of thoroughness?
Until quite recently, it was believed that the FSA was changing its spots as a result of the banking and financial crisis.
Hector Sants, the chief executive, suggested that the new-look FSA would ensure crooked bankers would in future be much more “frightened” of his watchdog. Speaking in March 2009, he said: “There is a view that people are not frightened of the FSA. I can assure you that this is a view I am determined to correct. People should be very frightened of the FSA.”
Sadly, this much needed metamorphosis has not occurred. Even though a large group of MPs demanded a thorough investigation into the BoS Reading scam in a parliamentary debate on June 2nd 2009, it looks as though the FSA is determined to produce yet another whitewash. Why else would it have “outsourced” this second investigation to the ‘Big Four’ accountancy firm Ernst & Young?
(Ernst & Young can hardly be considered independent: last year I understand it signed a circa £300m consultancy contract with Lloyds Banking Group to sort out and harmonize IT systems and platforms as part of the Lloyds / HBOS integration).
- To read ‘Examining HBOS’ click here
- To read ‘Banking’s Abu Ghaib?’, click here
- The story has been on this website since June 2009 but Lloyds Banking Group has not once asked me to alter a single word.
Short URL: http://www.ianfraser.org/?p=1004