ANGRY shareholders of Lloyds Banking Group have claimed that the emerging Libor scandal is more proof they were
misled into voting to take over HBOS.
Lloyds Action Now (LAN), which has been campaigning for the past three years on behalf of 9,000 members, have instructed lawyers to incorporate in their claim the allegation that Lloyds TSB directors knew that HBOS’s real interest rates were not being quoted to the Libor panel at the time they were recommending a merger with the stricken bank.
Figures at the time have shown that over the period of the financial crisis, Libor panel members Royal Bank of Scotland and HBOS were regularly submitting much lower borrowing costs than banks with much stronger balance sheets, including Barclays, JPMorgan Chase and HSBC
Campaigners now allege that the HBOS low interest rate claims were “a deliberate attempt to hide the depth of the crisis from shareholders and that Lloyds TSB directors ought to have disclosed this”.
Sir Andrew Watson, LAN chairman, said: “HBOS pretended that it was able to borrow money from other banks on an unsecured basis at rates more favourable than, for instance, HSBC Bank could.
“Lloyds TSB directors closed their eyes to this, did not disclose the true position and even hid the fact HBOS had received massive secret loans to keep it afloat in the run up to the takeover.”
A spokesman for Lloyds said: “As with many others in the sector, the group is assisting various regulators in their ongoing investigations into the setting of the London Interbank Offer Rate (Libor). Until these investigations are completed, it would be inappropriate for us to comment any further.”