An independent review into whether Lloyds Banking Group concealed a £1bn fraud linked to HBOS may not be fully disclosed, sparking accusations that the bank “cannot face the truth”.
The review, led by Dame Linda Dobbs, examines Lloyd’s response to a fraud scandal at the Reading branch of HBOS. The incident, which came to light after Lloyds bailed out HBOS in 2009, involved bankers and advisers taking advantage of loose credit policies to extract money from the bank. Lynden Scurfield, a key figure in the scandal, arranged for distressed companies to hire consultants from Quayside Corporate Services, a group that benefited greatly from the arrangements. The scam destroyed dozens of small and medium-sized businesses and left hundreds more suffering the repercussions.
The scandal came to a head in 2017 when six individuals were convicted, with Judge Martin Beddo noting that the victims had been left “deceived, defeated and penniless.” Since April 2017, Ms Linda has been investigating allegations that Lloyds concealed knowledge of the fraud. Initially, the review was expected to be completed within a few months, but more than seven years later, it remains incomplete.
Treasury Committee members had expected to receive the full, unredacted report, but Lloyd’s now appears to be reneging on that commitment. A spokesman for the bank stated that it would only share the “findings” of the review with MPs, leading to confusion over what would actually be revealed. This position contrasts with previous statements made in 2018 by then committee chair Nicky Morgan, who welcomed Lloyd’s “commitment” to providing a fully independent review. Morgan had expected MPs to receive the same report as the Financial Conduct Authority (FCA).
Ms Linda confirmed that the review would be prepared in a way that would allow it to be made public, but it was Lloyd’s decision to share the report or restrict access to selected findings. The lack of clarity has alarmed people closely involved in the case. Paul and Nicky Turner, whose music publishing company Quayside destroyed Zenith, played a key role in exposing the fraud. The couple, who met with the review team 16 times and submitted more than 10,000 documents, said they expected full transparency.
“What does Lloyd’s mean by ‘findings’? It’s clear as clay,” Paul Turner said. “If the bank does not present the same report to MPs and the public after all this time and expense, it will be a sad reflection that they simply cannot face the truth.”
The Treasury Committee, now led by Dame Meg Hellyer, declined to comment on the bank’s latest position, while Morgan did not respond to requests for its views. Meanwhile, Lloyd’s declined to clarify whether it believed there had been a misunderstanding over its previous assertions that the report had been submitted.
The fraud, initially estimated to have cost £245 million, is now believed to have caused losses approaching £1 billion, according to an internal review commissioned by Lloyd’s. Despite this, the bank’s current stance on the disclosure of the Dobbs report has cast doubt on whether full details of its handling of the scandal will ever be made public, prolonging uncertainty for victims and campaigners seeking accountability.