Spowart acknowledged that Prime Minister Gordon Brown had done the right thing in facilitating the rescue of HBOS in face of the market meltdown, but added that it was time to look at the impact the acquisition of HBOS would have on Scotland’s economy.
The move to ‘save’ Bank of Scotland was launched by MSP Alex Neil who, at the time of going to press, was assembling a cabal of Scottish bankers in Edinburgh to raise £6bn to buy one of Scotland’s financial ‘crown jewels’.
The cabal is likely to include Sir George Mathewson, former chief executive of the Royal Bank of Scotland, Sir Angus Grossart, one of the leading lights of Scottish finance, and Sir Peter Burt, the former chief executive of BoS and backer of Enterprise.
Gavin Masterton, former managing director of BoS, and George Mitchell, another former managing director of the bank, are also reported to have been targeted.
Neil, a member of the Scottish parliament’s finance committee and a former economic consultant, said: “We should try to explore every avenue. If we can muster this group it would represent a strong and diverse body of senior banking knowledge.
“If successful, they could be the custodians of Bank of Scotland. It would be another chapter in the bank’s incredible history.”
He is also calling for an urgent inquiry into the takeover of HBOS by Lloyds TSB.
Neil is in agreement with Keith Skeoch, chief executive of Standard Life Investments, who believes rules may have been broken with regard to the acquisition.
Skeoch said HBOS and Lloyds TSB had failed to follow correct takeover protocol when they did not formally announce that take-over talks were being held.
He believes that an announcement could have prevented shares in HBOS plummeting.
Neil said: “The comments from Skeoch highlight serious and fundamental flaws and rule breaches in the takeover process.
“If his allegations are correct, it took some four hours for news of the merger talks to reach the London Stock Exchange, and the Fi-nancial Services Authority failed miserably to help HBOS when clearly it could have been saved.”
He has written to the FSA and LSE demanding an immediate inquiry. “I have also written to the governor of the Bank of England asking what he plans to do after letting down the employees, depositors and shareholders of HBOS so badly by failing to provide liquidity when necessary,” he added.
However, according to a report in The Herald on September 22, “an insider” at Lloyds TSB in London had claimed that the £6bn bid was not something that had come to the bank’s attention in a big way.
It also quoted a “highly placed insider at HBOS” as saying that the bid was a fantasy because BoS and Halifax could be separated. The insider said: “The commercial and retail aspects of the bank are intrinsically linked and they reinforce one another as part of the structure. One could not exist without the other.”
And another “insider” quoted by The Herald, this time from the FSA, used the word “fantastical” in relation to the Scottish challenge.