Lawmakers have called for a probe into Lloyds Banking Group’s (LON:LLOY) handling of the fraud at the Reading office of its HBOS unit, Reuters has reported. The move comes after a Scottish businessman and frequent critic of Britain’s big banks published a confidential report by a former manager of the FTSE 100 lender into the fraud which saw corrupt employees at the division impose a firm of turnaround consultants on their small business customers in exchange for bribes.
Lloyds’ share price has climbed higher in London this morning, having gained 0.86 percent to 61.89p as of 08:45 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.25 percent higher at 7,575.04 points.
MPs call for probe
Reuters reported this morning that the All Party Parliamentary Group (APPG) on Fair Business Banking had called for an investigation by law enforcement and regulatory agencies into the handling by Lloyds of the fraud at its HBOS Reading unit more than a decade ago and into the role of auditor KPMG. The lawmakers argue that allegations that HBOS had concealed the fraud should be subject to “full, forensic and expeditious investigations by regulators”.
Call follows report
The calls follow the publication of an internal 2013 report by Scottish businessman Neil Mitchell alleging serious misconduct by the lender over the handling and disclosure of the fraud. The APPG also published the report, saying that it would press for a new investigation into KPMG’s audit of HBOS in 2008, which it said “gave the bank a clean bill of health only two months before it hit financial difficulty.”
Reuters reports that in a statement published on Tuesday, Lloyds did not address the substance of the report’s allegations that it misled investors over its financial health by not disclosing the fraud earlier.