THE UK’s Business Secretary, Vince Cable, has launched an investigation into whether the three former HBOS directors blamed for the banking group’s collapse can be banned as company directors for life.
Mr Cable warned it was the “first step” in a process which could lead to the three – who have so far not faced formal sanction – being stripped of their right to work as company directors. The Lib Dem minister has asked officials to see if there is enough evidence against Lord Stevenson, the former HBOS chairman, Sir James Crosby, the former chief executive, and Andy Hornby, his successor, to start a formal investigation under the Company Directors Disqualification Act.
Mr Cable is said to have “huge concerns” following a damning report into the collapse of the bank by the Parliamentary Commission on Banking Standards, published last week.
Officials at Mr Cable’s department will focus their investigation on the three former banking chiefs, who could be struck off as company directors within the next few months.
The report found Sir James was the “architect of the strategy that set the course for disaster” and held primary responsibility for the collapse along with former chairman Lord Stevenson and Mr Hornby.
Their “toxic” misjudgments led to the bank’s downfall and £20.5 billion taxpayer bailout at the height of the financial crisis and they should never be allowed to work in the financial sector again, according to the influential commission of MPs and peers.
Mr Cable insisted that the UK government had the legal powers to ban the three former HBOS directors from serving as company directors. He said: “It’s quite a legalistic process. I can ask [officials] to look at whether the companies investigations branch take action. We do have this power.”
Sir James stepped down from his role as an adviser to private equity firm Bridgepoint, following the publication of last week’s report.
However, he is still chairman of car credit company Money Barn and a senior independent director of Compass, one of the country’s largest catering companies. Both firms have declined to comment on the report into Sir James’s conduct.
Mr Hornby’s current employers, Gala Coral, said he has their “complete backing” in his role as chief executive. Lord Stevenson is currently a non-executive director at the leading high street bookseller Waterstone’s.
However, a spokeswoman for Mr Cable warned that the minister was prepared to take action to ban individuals from involvement with the companies, if there was proof of wrongdoing.
The spokeswoman said: “Vince was quite outraged by the findings and given that we as a department have responsibilities for corporate governance, he has huge concerns over the report.
“Vince has asked officials to kick off an investigation and to gather all the evidence and once this has been done, he will look at whether there is sufficient evidence to take action.
“They hold many other directorships. It’s important that where there is wrongdoing that people can be held to account.”