Shareholders to sue Lloyds over HBOS takeover

Published on Sunday 31 May 2009 22:13

PRIVATE shareholders plan to raise funds to sue Lloyds TSB over last year's HBOS takeover.

The UK Shareholders' Association (UKSA) will write to 1.5 million former HBOS shareholders to raise money for further legal advice.

In March, the UKSA set up an action group to represent the views of Lloyds Banking Group shareholders after receiving complaints from both former HBOS and Lloyds TSB investors.

Roger Lawson, the UKSA's spokesman, said the association had already received informal legal advice and now wanted to take more detailed advice.

Lawson said: "We plan to raise funds from shareholders to try to progress these issues.

"One issue is the Lloyds TSB directors seem to have paid significant attention to the wishes of the UK government and the interests of HBOS shareholders.

"Clearly, without the takeover HBOS was a dead duck. I think the Lloyds TSB directors were in essence influenced by the company and the institutional investors who held HBOS and that was the reason why they recommended this merger."

As well as the legal issues, Lawson said the UKSA was also putting pressure on the government to make plain how it intended to put the banks back into private ownership.

He added: "We'd like to see proposals as to how the government can withdraw from this business. In our view, that would allow shareholders to recoup their lost value more rapidly.

"As long as the government is bullying the company to do what it wants then it's not going to be operating in the interests of shareholders."

A spokesman for Lloyds Banking Group said: "Both HBOS and Lloyds TSB shareholders voted on the transaction and did so in overwhelming numbers.

"We believe that the transaction will deliver significant benefits for our shareholders in the medium term.

"We have acknowledged before that the short-term outlook is difficult but the same comment would apply to most other banks, in the UK or overseas."