Lloyds shareholders take legal action against Chancellor and BoE governor

by Gill Montia

Story link: Lloyds shareholders take legal action against Chancellor and BoE governor

Shareholders of Lloyds Banking Group are taking legal action against Bank of England governor, Mervyn King, and Chancellor of the Exchequer, Alistair Darling.

Lloyds Action Now spokeswoman and former BBC Watchdog presenter, Alice Beer, says the group is proposing to ask the High Court to establish whether Mr King and Mr Darling have acted beyond their powers.

The two kept secret the £61.6 billion lent to HBOS and RBS at the height of the financial crisis, in autumn of last year.

The campaigners will argue that loans to HBOS should have been disclosed to Lloyds shareholders, who were asked to vote on a takeover of HBOS at the time.

According to Ms Beer: “Had the true state of HBOS been known to Lloyds shareholders, there is no way they would have voted for the takeover.”

She adds: “The Government knew all about it, the Chairman of Lloyds and the Directors of HBOS knew about it, the FSA and the Bank of England knew all about it … the only people who didn’t know were ordinary men and women whose savings were put at risk in order to secure this shabby deal.”

Investors claim they saw up to 85% of the value of their shares wiped out when the truth about HBOS’s balance sheet emerged.

Lloyds Action Now, which represents the banks small shareholders, is also accusing the Government of withholding information in contravention of the Freedom of Information Act.