Doubts grow over release of long-awaited HBOS scandal report as Lloyds refuses full disclosure
An independent review into Lloyds Banking Group’s cover-up of a £1 billion fraud linked to HBOS may not be fully revealed, prompting accusations that the bank “can’t face the truth.”
The review, led by Dame Linda Dobbs, examines Lloyds’ response to the fraud scandal at the HBOS Reading branch. The incident, which emerged after Lloyds bailed out HBOS in 2009, involved banks and advisers using lax credit terms to secure funding from the bank. Lynden Scourfield, a key figure in this campaign, arranged for struggling businesses to hire advisers from Quayside Corporate Services, a group that benefited greatly from these arrangements. The scam has destroyed dozens of small and medium-sized businesses and left hundreds devastated by the fallout.
The scandal culminated in 2017 when six people were convicted, and Judge Martin Beddoe noted that the victims were left “deceived, defeated and penniless.” Since April 2017, Dame Linda has been investigating allegations that Lloyds concealed its knowledge of the fraud. Initially, the review was expected to be completed within a few months, but more than seven years later, it remains unfinished.
Treasury committee members had expected to receive the full, unredacted report, but now Lloyds appears to be backtracking on this commitment. A spokesperson for the bank said it would only share the “findings” of the review with MPs, leading to confusion over what would be revealed. This position is contrary to previous statements made in 2018 by then committee chairman Nicky Morgan, who accepted Lloyds’ “commitment” to provide a fully independent review. Morgan expected MPs to receive the same report as the Financial Conduct Authority (FCA).
Dame Linda confirmed that the review will be prepared in a way that allows it to be made public, but it is Lloyds’ decision whether to share the report or restrict access to selected findings. The lack of clarity has caused concern among those closest to the case. Paul and Nikki Turner, whose music publishing business Zenith was destroyed by Quayside, were instrumental in exposing the fraud. The couple, who met with the review team 16 times and submitted more than 10,000 documents, said they expected full transparency.
“What does Lloyds mean by ‘got it’? It’s as clear as mud,” said Paul Turner. “If the bank won’t give its own report to Members of Parliament and the public after all this time and great expense, it’s a sad illustration that it can’t face the truth.”
The Treasury committee, now chaired by Dame Meg Hillier, declined to comment on the bank’s latest position, while Morgan did not respond to requests for comment. Meanwhile, Lloyds refused to clarify whether it believed there was a misunderstanding about its previous assurances to provide the report.
The fraud, which was thought to have cost £245 million, is now believed to have caused losses of close to £1 billion, according to an internal review by Lloyds. Despite this, the bank’s current position with the disclosure of the Dobbs report casts doubt on whether the full details of its handling of the scandal will ever be made public, adding to the uncertainty of victims and campaigners seeking accountability.
