Lloyds Action Group launch £2bn claim

29 March 2010 | By Natalie Thomas

Lloyds Action Now says it is litigating on behalf of 800,000 private shareholders who lost substantial sums after the government encouraged the takeover of stricken lender HBOS.

Campaigners say it threatens to be the biggest law case in British legal history and the bank’s 10,000 largest private investors have been approached for funding as the first stage in contacting all shareholders on the register.

Jillian Timmis, acting chairman at LAN, says: “Alistair Darling wasted an opportunity and now we have no other option than go to law. He had a chance to play fair by investors who were conned into bailing out HBOS to save Gordon Brown’s face and the British financial system from the collapse of a major bank.

“First the Conservatives and now the government say they will profit from the sale of Lloyds shares held by the Government with no reference to how it came to acquire them and the price paid by shareholders.  Legal action will halt any sale until compensation has been resolved.”

LAN calculates that each investor lost around £2.20 per share – a total of some £2bn.

Jim Rai, head of litigation at London solicitors Winckworth Sherwood, who have been instructed in the case, says: “The true state of HBOS’s finances was known to Lloyds directors, the government, the Bank of England and the Financial Services Authority, but was with held from shareholders who were legally entitled to this information when they were asked to vote on the merger.”

LAN has spent nine months preparing its case.  Queen’s Counsel have identified causes of action under Financial Markets (Anti-Abuse) legislation and said that the government’s decision to sell its shares can be challenged in judicial review as it contravenes the shareholders’

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