By Claire West
Important evidence which could have changed the outcome of a vital court case in the run up to the merger of Lloyds TSB with HBOS was deliberately withheld by the then Business Secretary Lord Mandelson, the shareholder action group Lloyd Action Now (LAN) said yesterday.
The evidence submitted in a secret dossier by Mandelson to a Competition Appeals Tribunal in the Autumn of 2008 and later the Scottish Court of Session failed to disclose how HBOS had been secretly funded to the tune of £25.4 billion in Emergency Liquidity Assistance.
LAN believes the failure to disclose the loan, which its lawyers say constituted illegal state aid, would have had a massive bearing on the outcome of the case and could have seen the merger declared illegal.
‘The evidence submitted by Lord Mandleson was the subject of a secrecy order which means that no-one who was a party to the case can reveal what it contained,’ said Adrian Lithgow, spokesman for LAN.
‘That does not prevent them from saying what was not in the secret dossier, and our sources are adamant there was no mention of the £25.4 billion. The implications are astounding.’
LAN has asked new Business Secretary Vince Cable to release the dossier, as he said should happen when he was in opposition, and Particulars of Claim alleging illegal state aid by HM Treasury and the Bank of England and misrepresentation by Lloyd directors were been lodged on behalf of members on Friday. The group says up to 800,000 shareholders at the time of the merger in January 2009 lost a total of £2 billion between them.
The group is now mailing a further 300,000 shareholders in addition to the 200,000 already contacted to inform them of the legal action it is taking and has produced a 16-page brochure describing in detail how the Government and Lloyds directors fixed the HBOS deal.