The All-Party Parliamentary Group (APPG) on Fair Business Banking is calling for a new investigation into Lloyds and how much its executives knew about the ongoing mistreatment of small business customers by its HBOS unit.
Reports in City A.M. on Monday (April 8) said APPG Co-chair Kevin Hollinrake sent a letter to Bank of England Governor Mark Carney, as well as the Prudential Regulation Authority, accusing Lloyds executives of withholding a whistleblower report from 2013 that was authored by Senior Risk Officer Sally Masterson, which reports said was not shared with the bank’s board until March of 2017.
The letter also calls on the Financial Conduct Authority (FCA) to investigate Lloyds Chief Executive Antonio Horta-Osorio, claiming he knew about the ongoing fraud as far back as 2011, but failed to initiate an investigation. Hollinrake is also accusing Horta-Osorio of preventing Masterson from cooperating with police and instead dismissing her from her position.
Masterson’s report said HBOS executives “concealed” a fraud that stripped some customers of their assets before it was acquired by Lloyds in 2008. The scam has already led to the imprisonment of several former executives.
“The handling of the HBOS Reading fraud and the evidence of subsequent attempts to cover up the extent of fraud raises serious questions around the corporate governance and conduct of Lloyds Banking Group executive directors, including chief executive Antonio Horta-Osorio,” said Hollinrake in the letter.
“Lloyds Banking Group continues to regret and apologize for the distress caused to those customers affected by the criminal misconduct at HBOS Impaired Office, Reading,” said Lloyds in a statement. “We have now provided compensation offers to all 71 businesses in the customer review, and more than 96 percent of these have been accepted.”
A separate inquiry into Lloyds and how much its executives knew of the HBOS fraud was delayed until 2020, reports noted. That will be conducted by retired high court judge Linda Dobbs. Hollinrake is also accusing Lloyds of deflecting questions as a result of that delay.