Lloyds shareholders have launched a £14 billion claim against Lloyds Banking Group saying that they were not told the full extent of HBOS’s troubles when they took over the struggling bank at the peak of the financial crisis.
Lloyds Action Now (LAN) has been set up by shareholders for shareholders to recover investment losses as a result of the merger in 2008.
The shareholders claim they were misled into voting for a takeover of HBOS and did not realise the size of the £25.4 billion loan that the Government had made to the bank. Following the buyout dividend payments were stopped and have been suspended until at least 2012.
According to Citywire the action group said: “We now know Lloyd’s directors and advisors, the Government, the Financial Services Authority and the Bank of England (and advisors) were fully aware of the effective bankruptcy of HBOS before the merger but nevertheless promoted it.”
The decision to buy HBOS meant Lloyds Banking Group was forced to borrow from the government, giving the tax payer a 41 per cent stake in the bank.
LAN have now written a claims letters to the Treasury, Lloyds chief executive Eric Daniels and former chairman Sir Victor Blank claiming compensation for investors. The treasury has 90 days to respond to the claim or Lloyd’s shareholders could launch legal action.
© Fair Investment Company Ltd