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| Version 1 | Version 2 |
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| HBOS must have known of Reading fraud, Thames Valley PCC says | HBOS must have known of Reading fraud, Thames Valley PCC says |
| (4 months later) | |
| Cabinet secretary rescinded offer to meet to discuss concerns about banking sector, Anthony Stansfeld also tells meeting | |
| Jill Treanor | |
| Wed 27 Sep 2017 20.27 BST | |
| First published on Wed 27 Sep 2017 19.53 BST | |
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| The police and crime commissioner of Thames Valley police has claimed that HBOS must have known of the fraudulent activities inside its Reading branch as long ago as February 2008. | The police and crime commissioner of Thames Valley police has claimed that HBOS must have known of the fraudulent activities inside its Reading branch as long ago as February 2008. |
| Six individuals, including two former HBOS employers, were jailed earlier this year for committing the fraud, described by the judge as an “utterly corrupt scheme” that left small business owners cheated, defeated and penniless. | Six individuals, including two former HBOS employers, were jailed earlier this year for committing the fraud, described by the judge as an “utterly corrupt scheme” that left small business owners cheated, defeated and penniless. |
| Anthony Stansfeld told a meeting attended by 150 people on Wednesday that it had still taken the bank – rescued by Lloyds following the 2008 financial crisis – a decade to offer compensation to the 67 companies affected. | Anthony Stansfeld told a meeting attended by 150 people on Wednesday that it had still taken the bank – rescued by Lloyds following the 2008 financial crisis – a decade to offer compensation to the 67 companies affected. |
| Sitting alongside TV celebrity Noel Edmonds, who is claiming £300m from Lloyds for the damage caused to his company, Stansfeld also told the audience that Sir Jeremy Heywood, the cabinet secretary, had rescinded an offer to meet to discuss concerns the commissioner was raising about the banking sector after he had received briefings on the matters. | Sitting alongside TV celebrity Noel Edmonds, who is claiming £300m from Lloyds for the damage caused to his company, Stansfeld also told the audience that Sir Jeremy Heywood, the cabinet secretary, had rescinded an offer to meet to discuss concerns the commissioner was raising about the banking sector after he had received briefings on the matters. |
| The Cabinet Office had not responded to a request for comment on the claim about Heywood at the time of publication. [See footnote.] | The Cabinet Office had not responded to a request for comment on the claim about Heywood at the time of publication. [See footnote.] |
| Stansfeld said: “It must have been known quite clearly to the directors of the bank as far back as February 2008 that a massive fraud had taken place [at HBOS Reading].” | Stansfeld said: “It must have been known quite clearly to the directors of the bank as far back as February 2008 that a massive fraud had taken place [at HBOS Reading].” |
| The scam took place between 2003 and 2008 and involved a former HBOS employee, Lynden Scourfield, who was in charge of looking after troubled businesses. He was bribed by David Mills, the owner of a financial consultancy, to load loans on to struggling companies and refer them to Mills’s business. Many of the firms went bankrupt and some of the owners lost their homes. | The scam took place between 2003 and 2008 and involved a former HBOS employee, Lynden Scourfield, who was in charge of looking after troubled businesses. He was bribed by David Mills, the owner of a financial consultancy, to load loans on to struggling companies and refer them to Mills’s business. Many of the firms went bankrupt and some of the owners lost their homes. |
| Victims of the fraud were among those attending the meeting in Conway Hall in central London organised by the SME Alliance, a campaign group for small business fronted by Nikki Turner, who, with her husband Paul, lobbied for the HBOS Reading branch to be investigated. | Victims of the fraud were among those attending the meeting in Conway Hall in central London organised by the SME Alliance, a campaign group for small business fronted by Nikki Turner, who, with her husband Paul, lobbied for the HBOS Reading branch to be investigated. |
| Some of those present have also claimed they were badly treated by Royal Bank of Scotland’s now defunct global restructuring group, which was supposed to help turn around businesses in trouble but has been accused of running them into the ground. The hall heard Edmonds explain that he had a copy of the report commissioned by the Financial Conduct Authority into the division which the regulator was refusing to publish. | Some of those present have also claimed they were badly treated by Royal Bank of Scotland’s now defunct global restructuring group, which was supposed to help turn around businesses in trouble but has been accused of running them into the ground. The hall heard Edmonds explain that he had a copy of the report commissioned by the Financial Conduct Authority into the division which the regulator was refusing to publish. |
| Edmonds said he had been warned by Andrew Bailey, chief executive of the FCA, that if he published the report, it would be a criminal offence. The FCA would not comment directly, but had made a similiar point to Nicky Morgan, chair of the Treasury select committee, which is also calling for the so-called section 116 report to be published. | Edmonds said he had been warned by Andrew Bailey, chief executive of the FCA, that if he published the report, it would be a criminal offence. The FCA would not comment directly, but had made a similiar point to Nicky Morgan, chair of the Treasury select committee, which is also calling for the so-called section 116 report to be published. |
| He said he had heard that RBS could collapse under the weight of claims if the report was published. “I’ve come to the conclusion that the publication of the report is in the victims’ interest,” he added, but said it was a complex question. | He said he had heard that RBS could collapse under the weight of claims if the report was published. “I’ve come to the conclusion that the publication of the report is in the victims’ interest,” he added, but said it was a complex question. |
| The Deal or No Deal host said that Antonio Horta-Osorio, the boss of Lloyds since 2011, must have known about the HBOS fraud and said he was either a “shit banker or a liar”. He is going to mediation with the bank on 11 November over his claim. | The Deal or No Deal host said that Antonio Horta-Osorio, the boss of Lloyds since 2011, must have known about the HBOS fraud and said he was either a “shit banker or a liar”. He is going to mediation with the bank on 11 November over his claim. |
| Lloyds said it was cooperating with an investigation by the FCA into the discovery and reporting of misconduct at HBOS at the time. The bank has commissioned an independent review from retired judge Dame Linda Dobbs into whether Lloyds could and should have done more after the acquisition of HBOS. | Lloyds said it was cooperating with an investigation by the FCA into the discovery and reporting of misconduct at HBOS at the time. The bank has commissioned an independent review from retired judge Dame Linda Dobbs into whether Lloyds could and should have done more after the acquisition of HBOS. |
| A Lloyds Banking Group spokesperson said: “While concerns regarding the misconduct of certain HBOS individuals were identified, there was not sufficient evidence to establish criminal behaviour. The police and regulators were the appropriate authorities to conduct the investigation.” | A Lloyds Banking Group spokesperson said: “While concerns regarding the misconduct of certain HBOS individuals were identified, there was not sufficient evidence to establish criminal behaviour. The police and regulators were the appropriate authorities to conduct the investigation.” |
| Edmonds said there was a “cancer in our financial institutions” that had deliberately targeted small businesses to raise cash during the financial crisis. | Edmonds said there was a “cancer in our financial institutions” that had deliberately targeted small businesses to raise cash during the financial crisis. |
| Stansfeld said Thames Valley police had not been paid back any of the £7m it had cost the force to conduct the HBOS Reading investigation, and called for the fines levied by the FCA to be paid to police forces to fund fraud investigations. Since the Libor crisis in 2012, the fines have gone to the Treasury rather than the FCA. | Stansfeld said Thames Valley police had not been paid back any of the £7m it had cost the force to conduct the HBOS Reading investigation, and called for the fines levied by the FCA to be paid to police forces to fund fraud investigations. Since the Libor crisis in 2012, the fines have gone to the Treasury rather than the FCA. |
| • After publication, the Cabinet Office provided the following response: “The Cabinet Secretary was in correspondence with Mr Stansfeld and encouraged him to pursue his allegations through the appropriate channels.” | • After publication, the Cabinet Office provided the following response: “The Cabinet Secretary was in correspondence with Mr Stansfeld and encouraged him to pursue his allegations through the appropriate channels.” |
| HBOS | |
| Lloyds Banking Group | |
| Banking | |
| Noel Edmonds | |
| news | |
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