Lloyds chairman urged at back HBOS deal

Getty Images

The former Lloyds chairman made an urgent appeal to the Minister to save the President at the height of the financial crisis, to buy the business of the bank HBOS.

Sir Victor Blank said he called Gordon Brown to warn that the banking sector was at risk if the deal failed.

Around 5,500 Lloyds shareholders to sue the bank, Sir Victor, and four other former members of the Board of Directors, which is to say that you should not recommended to have the offer.

But Sir Victor said the High Court was of the deal to shareholders interest.

Lloyds and the Directors of the defense of the claim and deny the accusations.

The former Lloyds chairman, Gordon Brown, called on 27 September 2008, because he was not afraid, the two Lloyds and Barclays would have been able to, bonds on the money markets, when to buy the business of HBOS and the bank was nationalized.

“I mean, I’m telling you, I remember it well – I went to the garden three times, and thought, what the hell can I do… just pick up the phone and see if I could get hold of, the Prime Minister and say to him, it looked like a disaster comes,” Sir Victor said.

According to Sir Victor, the Prime Minister then intervened by calling the Bank of England, the advanced support of HBOS, the allowed to go the business forward.

The shareholders of Lloyds to sue to challenge Sir Victor, and other former Directors, they should not be recommended, following the acquisition of HBOS in 2008 crisis without disclosing its true financial condition.

Sir Victor warned on Saturday 27 September 2008, Lloyds CEO, Eric Daniels, HBOS was in danger, its doors the following Monday will be close.

“It had difficulty accessing the Central banks” systems at this time, and that seemed to be the logjam,” Sir Victor said.

/Getty Images

Ten days earlier, on 17. September, the former Lloyds chairman, Governor Sir Mervyn King warned the Bank of England, HBOS will not be would have to be nationalized, if Lloyds announce a takeover the following day.

The acquisition announcement was made on 18 September 2008. Lloyds shareholders claim, recommended to the Board the acceptance without indication of how weak HBOS.

The following week, Lloyds’ advisers discussed a joint financing plan with the Bank of England, which was not announced to the shareholders, either Lloyds or HBOS.

The former Chairman of Lloyds Bank, admitted that he knew that Lloyd’s had agreed a loan to HBOS – but not when.

“I didn’t know that Lloyds and HBOS via a line (of credit) for HBOS, but I could tell what the date.

Richard Hill QC, for the plaintiffs, accused Sir Victor did not disclose all of the loan: “you must not have known consciously by the system and you have to, that it passed?”

Sir Victor said: “you always tell me I must have been aware of, and I say to you, I remember the circumstances, as they say.”

Mr Hill said: “It is obviously want to shareholders would know, if you are asked to buy a bank, which is held from collapse by the mystery of the lending. What it meant was a stock maintained artificially.”

The Sir Victor replied, “I agree. The market knew that HBOS had financing difficulties. The fact that it is a bit more – I don’t think that what is material.”

Sir Victor also said he didn’t want to see a letter sent to him at the height of the financial crisis, warning against fraud in the case of HBOS.

The letter, from HBOS customer of Andrew Reade and addressed to Sir Victor at Lloyds, reported allegations of fraudulent transactions in the business consulting, Kai, and an unhealthy relationship with HBOS – accusations, not to Lloyds shareholders.

Earlier this year, have proven to be the allegations as correct if the HBOS Banker and former managing Director of Kai have been detained.

Presented with the letter, Sir Victor, the court said the letter had not reached him; if it had, he said, he would have ordered an investigation.

The case goes on.