MPs have said that they will publish a report into what Lloyds Banking Group (LON:LLOY) knew about a fraud at its HBOS Reading unit, Reuters has reported. The report claims that HBOS concealed the fraud in an attempt to prevent the failure of a rights issue and its subsequent takeover by the blue-chip lender during the financial crisis.
Lloyds’ share price rose in the previous session, adding 0.45 percent to 63.13p. The shares underperformed the broader UK market, with the benchmark FTSE 100 index gaining 62.08 points to end the session 0.81 percent higher at 7,765.79.
MPs could publish HBOS report
Reuters reported yesterday that Kevin Hollinrake, chair of the All-Party Parliamentary Group on Fair Business Banking, had said that the cross-party group would use public interest laws to publish the ‘Project Lord Turnbull Report’ into the HBOS fraud, unless Lloyds itself publishes first. The report, written by an employee of the FTSE 100 lender back in 2013, has circulated privately among relevant stakeholders for years but has not been made available to the public on account of the sensitive customer data contained in it.
Six people were jailed last year for their role in the fraud which saw corrupt employees at the bank’s Reading office impose a firm of turnaround consultants on their small business customers in exchange for bribes.
Publication is likely to raise further questions over the timing of Lloyds and HBOS’ disclosures about the fraud, a matter of public interest, Hollinrake said in a letter addressed to the group’s Chief Executive Antonio Horta-Osorio dated June 13 and seen by the newswire.
Scrutiny of issue continues
The news comes as the Financial Conduct Authority continues with its probe into HBOS and what its executives knew of the fraud, while a retired judge is probing whether Lloyds properly investigated the issue. The UK’s National Crime Agency meanwhile has expanded a review into the fraud allegations at HBOS.