The cost of Brown's encouragement to Lloyds share holders
During the share holder vote of the HBOS Lloyds merger I advised my wife to vote no, which she duly did, but clearly it wasn't a choice made by many other share holders.
Now she knows why as the merger went through anyway and she just received the following letter, which I attach for those of you who have the good fortune not to be Lloyds shareholders to read ( you need to click on it to read it - but I reproduce the key part below )..
- Dear
I am pleased to let you know that the acquisition of HBOS plc has now been completed and as you will be aware Lloyds TSB Group plc has now changed its name to Lloyds Banking Group plc. The combination will drive significant synergy benefits; the Lloyds Banking Group Board believe it will deliver total annual pre-tax cost savings greater than £1.5 billion by the end of 2011.
As shareholders will be aware, no dividend may be paid on the Lloyds Banking Group shares while any of the HM Treasury Preference Shares are outstanding, unless otherwise agreed by HM Treasury. However, the Lloyds Banking Group Board recognises the importance of dividends to shareholders and its clear intention is to achieve the repurchase of the HM Treasury Preference Shares during 2009 so as to enable us to resume the payment of dividends.
- No one is more conflicted in the crisis than the Prime Minister himself. You can feel him longing to attack bankers – both because everyone hates them at present and because of how Labour politics works. But he knows that the now-excoriated Sir Fred was once his close associate. Mr Brown boasted last autumn that it was his quiet word with his friend Sir Victor Blank, that persuaded Sir Victor’s company, Lloyds, to hurry up and take over HBOS – a move which seems to have turned both banks into the living dead.
Still at least the senior manager in Lloyds and the Prime Minister are being paid even if their shareholders are not. Thanks Gordon.
2 comments:
Judging by Northern Rock, you might expect to see some bonuses going to those in charge of Lloyds as well.
Dear Mr and Mrs Man In The Shed,
I believe you (and all the other share holders of Lloyds) have been well and truly duped. Please see below an extract from a letter I sent on behalf of 13 Company Directors, to the Prime Minister in November 08 regarding the state of HBOS. It was my second letter to him on the subject of a huge scandal involving losses of between half and one billion pounds from one office of HBOS in just over one year - and which has affected thousands of people and caused the ruin of many good businesses.
The PM responded (or rather someone from his office responded) to my first letter saying:
"...... Mr Brown was pleased you felt able to write to him about your concerns.......He has asked me to send you letter to HM Treasury as he feels it is important that they are aware of your concerns and can send you any comments they may have."
In my second letter to him I asked for a meeting to present all the evidence supporting our allegations and I made the point:
"I think it is also important this matter is dealt with before shareholders of Lloyds TSB take on any past liability of HBOS. As the proposed merger is imminent, we request a meeting as a matter of urgency."
Needless to say, HM Treasury have not got back to me with any comment. As my husband and I are imminently about to lose our family home if nothing is done about this scandal, I spend a lot of time collecting evidence to support our case against HBOS and it doesn't make good reading. I wrote to the PM again on the 19th January and, as a shareholder of Lloyds, you may be interested to read this extract:
"On the subject of transparency, I am very concerned to learn from the Scottish Court of Session of 12th January, that the 'secret dossier' prepared on HBOS by the Tripartite Authority had been destroyed. I believe the dossier was advised “in camera” in the Competition Appeals Tribunal Case and its contents have never been disclosed to the public. I am led to believe it may have alluded to a massive black hole in HBOS's balance sheet, information perhaps that should have been made known to all the shareholders in both Banks. However, David Sellar QC acting for HBOS said;
"The secret dossier contained information about the liquidity position of the Company (ie HBOS plc). The information was never used in the Competition Appeal Tribunal and all copies were destroyed".
Aside from the fact any document prepared on a computer is difficult to completely 'destroy', the more serious question is, what kind of information, prepared collectively by the Treasury, the FSA and the Bank of England, is so sensitive it must be eliminated to avoid exposure? This is a very worrying revelation and suggests the information contained was further proof of something very wrong in HBOS. Equally disturbing is the fact a 'secret dossier' existed at all. HBOS is/was a Public Company. Its shareholders (which now include the tax payer) are absolutely entitled to see any important information which affects their shareholding, the Bank’s financial position or anything else. In this instance, the shareholders of Lloyds TSB would also have been interested. So why was it secret? From our own point of view, did the document contain any detail of the £500M+ loss caused by Lynden Scourfield, other Bank personnel and Quayside Corporate Services Ltd?
I am sure you will be well aware of this dossier just as I am sure that the general public is ignorant of it, as it's very existence also appears to be quite illusionary. But, if one small office of HBOS can lose so much money without anyone batting an eye, is it not entirely possible the Country's biggest mortgage lender and oldest Bank, could have lost even more than RBS? Would this knowledge have damaged or even stopped the Lloyds merger? Is this the reason such an important document was destroyed? Or is it the converse and HBOS, through subsequent dealings, did not need to merge?"
On the 27th January, several MP's are meeting with executives of HBOS (or rather Lloyds) to discuss the matter which I and others are fighting to expose. I believe we have been victims of extreme negligence if not fraud by HBOS but that was as a direct result of a 'rogue bank manager', his consultancy chums and the subsequent 'cover up' by senior officials in the Bank. Possibly Lloyds shareholders have been equally conned - the question is by who?
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