File photo dated 03/03/11 of a sign for a Lloyds TSB bank branch, as shareholders begin a High Court battle today for £600 million damages from Lloyds Banking Group and five former executives over claims they were misled during the acquisition of HBOS. PRESS ASSOCIATION Photo. Issue date: Wednesday October 18, 2017. The civil action brought by the Lloyds/HBOS Shareholder Action Group, which represents about 6,000 former Lloyds TSB shareholders, is due to last for 14 weeks. See PA story COURTS Lloyds. Photo credit should read: Peter Byrne/PA Wire

Former Lloyds TSB shareholders begin High court action seeking £600m damages

Shareholders begin a High Court battle today for £600 million damages from Lloyds Banking Group and five former executives over claims they were misled during the acquisition of HBOS.

The long-awaited civil action brought by the Lloyds/HBOS Shareholder Action Group, which represents about 6,000 former Lloyds TSB shareholders, is due to last for 14 weeks.

Their multimillion-pound case has been brought against Lloyds Banking Group, former chairman Sir Victor Blank, ex-chief executive Eric Daniels, former chief financial officer Tim Tookey, one-time director of retail banking Helen Weir, and ex-director of wholesale banking George Truett Tate.

The litigation will be heard in London by Mr Justice Norris.

It is expected that each defendant will be cross-examined during the trial, which is expected to shed further light on the internal decisions that drove the bank's controversial acquisition of HBOS.

A spokesman for Lloyds said: ''The group's position remains that we do not consider there to be any merit to these claims and we will robustly contest this legal action.''

HBOS saddled Lloyds with lots of toxic assets stemming from risky bets made by HBOS on commercial property during the boom years.

Lloyds was later forced to take a Government bailout worth £20.3 billion, which has been blamed in part on the takeover.

A spokesman for the action group said: ”We will finally have our day in court after nearly 10 years and expose the injustice done to Lloyds TSB shareholders who were duped into rescuing a defunct HBOS.

”The trial will show how much the director defendants knew about how bad HBOS was, that they concealed crucial information about HBOS’s financial position, and that they should not have recommended the deal on the basis that they did, nor should they have allowed the deal to go ahead on those terms.”

The spokesman said they hoped the trial would also ”get to the bottom” of the role played by the UK Government, Bank of England, UK Listing Authority and the now-defunct Financial Services Authority (FSA) in ”relaxing competition rules” and ”pushing through the deal”.

The claimants are comprised of around 300 institutional shareholders – including pension funds and investment funds from the UK, Europe, Asia, Canada and the US – and around 5,700 retail investors who say Lloyds TSB failed to disclose the true financial state of HBOS when it launched the acquisition.


Peter Byrne/PA Wire

Shares

Get our latest features in your inbox

Join our community of business leaders