UK: Gov to hand over HBOS papers ahead of trial

According to the FT the Department for Business, Enterprise and Industrial Strategy has been ordered to hand over highly sensitive documents as part of a £600 million (US$803.8 million) High Court antitrust case. The case deals with five former bank directors who are accused of withholding information about the true state of HBOS, a banking and insurance company in the United Kingdom, before its takeover in 2008.

The government has now been ordered by the High Court to disclose all documents which were submitted to the Competition Appeal Tribunal (CAT) in 2008. The documents will be handed over to lawyers representing the investors who are suing Lloyds and five ex-directors including Mr Daniels over the rescue.

Law firm Harcus Sinclair UK is acting on behalf of 5,700 small shareholders and around 300 institutional investors. They are suing the bank and the five former directors for allegedly withholding information about the true state of HBOS. Lloyds bought HBOS at the height of the banking crisis in 2008 in a deal facilitated by former prime minister Gordon Brown, who waived competition rules to allow the takeover to take place.

According to the FT, the government was expected to hand over the case to the CMA and their refusal to do sparked anger from Scottish businesses and shareholders. They brought an unsuccessful legal challenge before the CAT in December 2008.

The government documents which now must be handed over were filed for that hearing. In the current lawsuit, the 6,000 investors allege they were misled into approving the takeover and claim that key information over the true financial health of HBOS was withheld from them including an emergency support package from the Bank of England and the Federal Reserve.

Full Content: Financial Times

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