By Marcus Leach
Lloyds Banking Group has been told it has a duty of care to contact thousands of investors so they can join a legal action against former Chairman Sir Victor Blank and CEO Eric Daniels over the disastrous HBOS merger.
Campaign Group Lloyds Action Now (LAN) has written to Lloyds Nominees Ltd, which holds millions of shares in trust on behalf of individuals and institutions whose names do not appear on its share register, demanding it tells them about the case.
In addition, LAN has written to a further 3,000 nominees who represent 23,000 investors making the same demand. “As professional trustees they have a clear duty to inform their clients about this action,” said LAN chairman Nicholas Shaw.
“If they do not, and LAN succeeds in gaining compensation for its members, those who were not party to the action because they were not told about it by their advisors would have a strong claim against them.”
Mr Shaw, a retired businessman from Dorset who heads the committee of the 4,000 strong group, said the demand is an opportunity for the bank to ‘come clean’ after the series of cynical moves to hid the truth about the HBOS merger.
“First we had the fact that the Bank of England secretly lent HBOS £25.4 billion. Then we find out the Federal Reserve of America secretly lent it $11 billion. Now there are reports auditors only signed off its books because the Government gave a secret guarantee it would not go under. And we are still waiting for Lloyds to deny another report that it lent HBOS another £10 billion to keep it afloat.
“And all the while Lloyds directors were telling shareholders to vote for the merger because it was a ‘wonderful deal’ and the FSA was saying HBOS was capitalised on a ‘sound footing.’
“What we actually have is a conspiracy against shareholders to save the Government and the Financial Authorities from a major banking collapse which has cost them £12 billion.”
Lloyds Action Now is also in the course of writing to 300,000 small shareholders in addition to the 200,000 already contacted out of the total of 800,000 as part of its recruitment drive.
Letters of Claim against Sir Victor and Mr Daniels, HM Treasury and the Bank of England has been served by Lloyds Action Now and the defendants have 90 days to reply.
Lawyers for LAN say shareholders were mislead over the merger because the full facts of HBOS were not declared to them in documents on which they were asked to vote and that Government gave State Aid unlawfully to HBOS contravening European legislation.