Posted on October 25th, 2010 | Categories - Financial News
Lloyds Banking Group shareholders are suing Lloyds directors and the government over the purchase of HBOS in 2009.
Shareholders of Lloyds believe they should not have had to shoulder the burden of saving HBOS and are suing the government.
Lloyds Banking Group shareholders have held a protest meeting over the loss of their money during the Lloyds TSB takeover of Halifax Bank of Scotland.
Lloyds bought HBOS last year but its share prices collapsed during the financial crisis – the government had to take up a 41% stake in the banking institution to keep it afloat.
The protesters from Lloyds Action Now (LAN) claim that Lloyds directors and former chancellor Alistair Darling withheld important information before the final purchase of HBOS regarding a £25.4 billion Bank of England loan given to the ailing bank a month before the takeover from Lloyds was complete. They said the massive cash injection should have been made public.
Campaign spokesman for LAN Adrian Lithgow said: “We are not saying this is a fraud as such, but we have good reason now to know that Lloyds directors and the government did not declare to shareholders the true state of HBOS’s finance when the merger was going through. We don’t believe that it was up to Lloyds shareholders as private individuals to shoulder the financial burden of saving HBOS”.
However, Lloyds said that it provided its shareholders with “thorough and proper information”.
LAN said that private investors lost £2 billion as a result of the collapse. They are now suing the Lloyds directors and the government for compensation.
About 250 people attended the meeting and Mr Lithgow described the proceedings as “highly successful”.