SHAREHOLDERS will today launch a campaign to raise money to fund legal action against Lloyds over its takover of HBOS.
Lloyds Action Now (Lan), a group set up by disgruntled shareholders, will use today's annual general meeting of the new super-bank in Glasgow to appeal for support to fund the action.
In a statement issued last night, the group said it was campaig
ning on behalf of Lloyds shareholders who were "rightly furious" the effect the takeover had had on the value of the group's shares.
Lan warned that if it recruited the support of 5,000 shareholders, legal action could be taken against current directors, former directors and even advisers involved in the deal.
The group has already hired a legal firm, Winckworth Sherwood, which expects to proceed on the basis of "negligent mis-statement by LTSB directors".
The group alleges that these statements were made in the merger prospectus, and there was as "withholding of information by HBOS directors". It also believes there could be grounds for a judicial review of the government's conduct and a "derivative action" against LTSB's banking and accountancy advisers.
Lan, whose members will be protesting in front of the SECC today, said: "Lloyds TSB shareholders are rightly furious at the way their company has been mismanaged by the board and the failure of professional advisers to discover the true state of the HBOS accounts at a time when its exposure to mortgage debt was a matter of public knowledge."
Last night Lloyds Banking Group strongly refuted the allegations, which were contained in a statement released to the press. A spokesman said: "We are not aware of any contact from this group, but would vigorously defend any claim based on the allegations set out in the press release.
"We believe the acquisition was very much in the interest of shareholders and will deliver significant benefits to shareholders in the medium to longer term."
The shareholders' group has formed a limited company to lead the legal action and retain the London law firm, to seek "substantial compensation".
A spokesman for the group said it has 170 members, but estimates it will need at least 5,000 subscribers. Disruption planned by Lan will add to the clamour expected at the AGM today. Shareholders are expected to grill the LBG board about problems as a result of the hasty takeover. This year the group revealed losses of more than £10 billion attributed to HBOS. The value of its shares have fallen more than 85 per cent from its pre-merger peak, despite recent rallies in its share price.
Shareholders are expected to vent their fury by voting against a number of resolutions. Although all resolutions are likely to pass, votes will be made against the reappointment of Sir Victor Blank as chairman as well as the remuneration report.
