In evidence to the Treasury Select Committee last week, Eric Daniels, chief executive of
LBG, said nobody was hoodwinked over the deal, although shareholders were not told of an emergency £25bn loan from the Bank of England prior to acquisition.
The acquisition left LBG with £10bn of losses in the 12 months to 30 June and forced the Government to take a 43% stake in the lender.
However, Daniels said LBG was fully aware of problems at HBOS and the information provided to its shareholders was more than adequate.
He said: “The gravity of the situation was very clear. If we had not purchased HBOS, the tripartite would have taken other steps. If HBOS had gone down,it would have had much more serious consequences than the current crisis.”
Alan Lakey, principal at Highclere Financial Services, said he believed that the deal was conducted in secrecy and that not enough information was provided.
He added: “If I were a shareholder, I would want to know. Although I prefer that LBG owns HBOS rather than the Government, I think that with a deal as important as this, more information was needed.”
