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Lloyds HBOS deal attracts lawsuit from 5,000 investors

by: Seamus Hasson
  • 10/11/2014
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Lloyds HBOS deal attracts lawsuit from 5,000 investors
More than 5,000 investors have joined a lawsuit against Lloyds claiming that a government arranged take-over of HBOS six years ago cost them about £400m.

According to reports in the FT, law firm Harcus Sinclair who are representing the investors, say the group of claimants has grown by about a third by number of shares owned in a fortnight.

Lawyers have said that they expect the number of claimants to double by the 19 November – the deadline for anyone who held shares in Lloyds at the time of the HBOS deal to join the legal action.

Lloyds has said it does not consider there to be any legal basis to the claims and indicated that it “will robustly contest this legal action”.

Victor Blank, the bank’s former chairman and Eric Daniels, former chief executive have both been named as defendants. Tim Tookey, the bank’s former finance director, Truett Tate, its former head of wholesale banking, and Helen Weir, its former retail banking boss have also been targeted by prosecuting lawyers.

The lawsuit which was originally filed by a group of 200 investors claim that that they were misled into approving the HBOS merger as key information over the true financial health of the bank had been left out. Lloyds is due to file its defence by early December and a trial could start as early as 2016.

It is the latest legal action to threaten the group who have also set aside £11bn to compensate customers that were mis-sold PPI. In July this year the bank also had to pay £226m for attempting to manipulate the libor interest rate.

Damon Parker director of Harcus Sinclair said that 10,000 investors who own 400m shares have signed up so far. He says that if successful the investors would be entitled to £1 per share to compensate for the loss they suffered in the ill-fated 2008 take-over.

 

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