Category Archives: Dentons

Why I object to Eric Daniels walking away from chaos with £5M – it’s not banker bashing, it’s logic.

I wrote the blog below in September 2011. Today’s news that Eric Daniels now feels he can sue Lloyds Banking Group for lost bonuses has not improved my view of him. Mr Daniels was a spectacularly unsuccessful bank CEO. A friend of mine said the HBOS /Lloyds bankers were paid a fortune to “fail with vigour.” My friend was right and Mr Daniels was a classic example. The fact he believes he is entitled to even more money is offensive to the Bank’s shareholders, it;s customers, to the thousands of staff who lost their jobs, to the victims of #HBOS Reading who Eric not only ignored but in some cases persecuted, and to the whole Country. Shame on you Mr Daniels. 22/08/17

Original blog of 26/09/2011

Some may say my various tweets on Saturday (24th September) about Eric Daniels were a bit harsh or that I have been indulging in what has reportedly become a common pastime in the UK, banker bashing. But I have good reason to feel Mr Daniels should not be allowed to cock this last snoop at the British taxpayer or at me.

I do remember 2009, when Eric Daniels became head of HBOS as well as Lloyds. I remember thinking that finally, the victims of HBOS Reading would get a fair hearing and a resolution because obviously, the management of Lloyds would want to clear up such an unwholesome mess. Not so.

I wrote to Mr Daniels on several occasions and those people who replied on his behalf (he never replied personally), simply said that, as far as Mr Daniels was concerned, the issue of HBOS Reading had been dealt with, there was no fraud and the Bank did not intend to correspond further. They are still corresponding now, over two years later and our last letter came from Harry Baines, General Counsel for HBOS and now Lloyds Banking Group, in July 2011. His variation on a theme was the matter has been well ‘ventilated’ and that’s the end of it.

The serious question this behaviour poses is not just as to why Mr Daniels, or anyone else for that matter, would be happy to see business banking clients left in such a sorry state having been defrauded by bank employees but rather; why would the CEO of a bank ignore evidence of criminality and allow the situation to progress to a full scale police investigation which could only be detrimental to the bank and its shareholders?

I’m fully aware that banks get hundreds if not thousands of complaints on a daily basis and they  very often deal with them using the ‘delay, deny, dilute’ tactic. But, I truly believe in this instance it was absolute madness and totally negligent to repeatedly ignore complaints about HBOS Reading and even when:

  1. Several MPs were asking for a resolution on behalf of Constituents.
  2. The HBOS Reading scandal was the subject of a File on 4 broadcast.
  3. MPs had a Debate at Westminster on 2nd June 2009 and James Paice MP even used Parliamentary Privilege to expose some of the unwholesome details (documented on Hansard).
  4. The FSA did a Section 166 Review which progressed to a Section 168 Investigation.

What part of the list above would allow the CEO of any business to think this was a matter that could simply be swept under the carpet and denied? At what point did Mr Daniels think the best way forward was to ignore the victims or, in our case, to proceed with trying to evict us from our home 22 times so that we could not continue our investigation into the fraud? Leaving aside integrity or even decency, has Mr Daniels never heard of damage limitation?

And the end result of pretending the HBOS Reading fraud never happened is Thames Valley Police and SOCA are now into their second year of ‘Operation Hornet’, the full scale investigation into what really happened at HBOS Reading. 8 people including 2 bankers have been arrested so far – which suggests that while Mr Daniels has not taken this matter seriously, the police have.

That cannot be good for the reputation of HBOS, Lloyds Banking Group or any of the senior executives, past or present, of HBOS or Lloyds who have refused to deal with the matter. Surely it is the responsibility of these people, who are paid vast amounts of money, to make make sure that a) major frauds do not happen in the Bank and b) when something does go horribly wrong, it is dealt with quickly, fairly and efficiently. But that has not happened – not under Andy Hornby nor Peter Cummings nor Eric Daniels. More importantly, anything detrimental to the Bank’s reputation, is not good for the shareholders which, in this case, means the Country. We have all seen Lloyds share price drop from pounds to pennies – while pay and bonuses for the top bankers have gone from thousands to millions. For what? For running the banks into the ground?

To make matters worse and even more confusing, Mr Daniels was in charge when the false bank account in the name of Zenith Cafe Ltd was being debited. I have already blogged about this but I forgot to add a vital point. While the Bank are busy convincing the FSA this is an ‘internal’ account which our company was never going to be asked to repay, we have the letters demanding repayment and telling us we must stick to the overdraft limit – which is of course zero as you can’t negotiate an overdraft for an account you don’t know about.

Presumably Mr Daniels would say he didn’t know about the account. He would be oblivious to the fact Zenith Cafe appears to owe the Bank approx. £630,000 – £200,000 of which was to pay the Bank’s lawyers to be involved with 5 of our eviction hearings when they weren’t instructed in that matter.

But even the FSA are now saying they are taking this matter very seriously because it simply isn’t possible to add approximately £250,000 worth of interest and charges (going up at £11,000+ per month) to a £372,000 debt for their legal fees and come out with a £600,000+ credit which is explained away as an ‘internal’ matter. So maybe, as CEO, Mr Daniels should have known about it so he could have asked the question – who authorised it? And how many other fake accounts were/are manipulating the Bank’s loan book? What impact is this or other ‘internal’ accounts having on the P&L? Or did this well paid now ex CEO have no idea what was happening on  his watch?

This morning I was reading an old letter from a Mr Godfrey at the Bank on behalf of Mr Daniels. It says – over and above the usual, “we’ve dealt with this so go away” – that the Bank is fully aware of our level of indebtedness. Maybe they were – but I certainly wasn’t as I knew nothing about the account for the first 18 months after the Bank created it! And I’m wondering now if my other company, Zenith Publishing Ltd, also has a false account attributed to it and how much does that one show as owing to the Bank?

Many people would say the ‘fantastic’ deal Mr Daniels and friends did when they merged a good or at least functioning bank, Lloyds, with a basket case, HBOS, caused thousands of people to lose a fortune. Not the kind of fortune top bankers or Corporate CEOs make in bonuses but the few thousand pounds a lot of people thought they were going to get annually as a pension when they retired – or the reasonable wage they made before thousands were made redundant when the Bank had to off load staff to increase profits – or the comfortable nest egg they had which meant they could afford a reasonable lifestyle. So many people’s lives changed thanks to the Lloyds/HBOS merger and even more lives have changed thanks to the overall bank bailouts.

I think we are all entitled to question why so many of the people who caused economic catastrophe have been so handsomely rewarded?

We are entitled to ask why people who have possibly broken the law, are not being prosecuted?

We are entitled to ask why people who have breached FSMA 2000, who have acted with little or no integrity and who have caused damage to our banking system via their negligence, have not been struck off as directors?

Personally I would ask why the ex CEO of Lloyds Banking Group was able to; totally ignore the evidence he was sent of a major fraud which has resulted in a major police investigation that is detrimental to the bank ; allow and even authorise the malicious persecution of the victims of the fraud; allow a false account to be operated in the name of a victim’s company (when false accounting is a criminal offence); and why should he walk away with £5 million pounds?

It doesn’t make any sense to me and I’m deeply disappointed UKFI, our Government and our regulators seem unable to understand how offensive this pay off is to the majority of the British people. This is not about banker bashing – it’s just logic and I imagine the 43,000 people who have lost or are losing their jobs at Lloyds, will also be wondering about  the logic of them all ending up with nothing when the man in charge of the disastrous merger, can get so much?

Maybe, on a personal level, Mr Daniels is a good man – I wouldn’t know. But in my view, he isn’t a good business man and I cannot understand why a bank that is 41% owned by the state, is paying him £5M? Or why he has been getting £3,333 a day since last March for doing nothing?  Or is the  implication, it was costing us much more than that when Mr Daniels was doing ‘something’?

I’m inclined to think it was. He has cost this Nation a fortune – and now his pension from the part state owned bank he was instrumental in ruining, will keep paying him a fortune every year for the rest of his life.

Eric Daniels, Fred Goodwin, Peter Cummings – some might consider them to be three of the most successful bank robbers in British history. No horses, no getaway cars, no balaclava’s, no dynamite. How did they do it?

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HBOS Reading – slow progress

We spent 4 years being defrauded by HBOS employees and associates and a further 10 years trying to expose what the Bank did to our and others’ businesses. For the first three of the ten years it was pretty much the case no one wanted to know and many people, including HBOS executives, were keen to portray my husband Paul and I either as nut cases (what do you mean bankers have committed fraud?) or as whinging business owners who didn’t want to repay their loans. Of course they also repeatedly put us through eviction hearings in their attempts to silence us but that didn’t work out either.

Which is why we have spent years gathering indisputable evidence of the fraud. As a consequence of a collective refusal by bankers and the authorities to believe what we were saying, even when we produced the evidence to support our allegations including in the many Court hearings, we are very aware who knew what and who was complicit in a massive cover up to hide the fraud, a cover up that goes all the way to the top of the Bank.

Nevertheless we did eventually, with the help of many other victims and with the hard work of Thames Valley Police, see bankers and their chums arrested, prosecuted and jailed. That process took over six years from the start of the police investigation. It wouldn’t have taken that long had the Bank been as co-operative as they like to say they were.

Despite the best efforts of many for it not to happen, Lynden Scourfield and Mark Dobson, both senior HBOS bankers, and David Mills, owner of Quayside Corporate Services and his team (including his wife), have gone to jail for a total of 47 years between them. So it is fair to say we and others have been vindicated and finally, albeit kicking and screaming, Lloyds Banking Group did agree to compensate all those defrauded.

It’s now five months since the criminal trial finished and eleven months since Lynden Scourfield (and therefore the Bank) pleaded guilty to various fraudulent scenarios. Despite statements, press releases and comments from the CEO of Lloyds Banking Group and despite a letter to Paul and I from Lord Blackwell saying he hoped that how the Bank would deal with this would restore trust in the Bank, only one person (according to the Bank) has been compensated and a further six (according to the Bank) have received offers.

I have no idea who these people are? No one I have spoken to – I’ve been speaking to victims of HBOS Reading since mid-2007 and the list of names is quite comprehensive – none of them have been compensated.

A representative of the Bank has been quoted in various newspapers saying the Bank are disappointed the compensation process is taking so long because they had a deadline of 30th June 2017. The Bank say the cause of the delay is because victims want more time to present their information. Or to put it another way, the problem is the victims!!!

Victims I have spoken to are also disappointed. They are disappointed the Bank’s chosen method of resolution is via a ‘review’ scheme that seems to be remarkably similar to the failed IRHP scheme or RBS GRG failed compensation scheme. The person running the Lloyds Banking Group ‘independent’ review is Professor Griggs, who I don’t doubt is an intelligent and honourable man. However, he is also someone who has done consultancy work for Lloyds Banking Group and he has been a director of a company where one of the main shareholders was connected to David Mills of Quayside Corporate Services, who was sent to jail for 15 years for his role in the fraud and corruption.

Then there is the way the review is being run. A member of SME Alliance who has met with Professor Griggs, has told us (and we are grateful for the information):

  • Neither the Bank nor Professor Griggs will volunteer any information about the methodology behind the review. Representatives of the Bank have said they cannot comment because Professor Griggs devised the methodology. Professor Griggs has said he cannot give any comment or information because the Bank devised the methodology.
  • A victim who chooses to enter the review process can either fill in the questionnaire Professor Griggs has prepared or they can send their information in an alternative format. Once the information has been received, it will be assessed by a panel and they will make a non-negotiable offer in approximately four weeks. Victims will not know who is on the panel and if they don’t find the offer satisfactory, they can of course choose to litigate (as if the majority of the victims can afford to litigate!).
  • The Bank will pay reasonable legal costs as part of the review but that is limited to a payment for fees totalling 20 hours. I can’t speak for other victims but having met many of them and researched the circumstances behind their cases, I’m not sure it’s fair or reasonable to suggest any victim can condense 10, 12, 14 years of their lives into a 20 hour explanation that will allow their advisers or their legal representatives to present a fully comprehensive presentation of their case.

I’m not sure if the Bank consider they should make additional payments for forensic accountants. I do think they should cover this cost because, let’s face it, some people may find it difficult to calculate losses going back more than 10 years. Additionally, I wonder how many hours the Bank’s lawyers have spent on each victim’s case? I’m guessing it’s far more than 20 hours per case, which hardly seems equitable. For example, Paul and I are not in the review but Professor Griggs does seem to know a lot about our case and it would take far more than 20 hours to go through the copious correspondence between us and HBOS/LBG/ Dentons/Walker Morris and others over the last 10 years. And I wonder what the hourly rate is for the Bank’s lawyers? I know how much one day of fees for Denton Wilde Sapte (now Dentons) costs because I apparently paid a fortune for a senior solicitor representing the Bank’s Board, to attend 6 of our 22 eviction hearings. Will the Bank pay such exorbitant fees to the victim’s advisers? I think not and I am now aware the Bank are challenging the adviser’s fees.

I wonder what will happen if the Bank, having dragged this whole sorry affair out for so long, decide they won’t pay the costs for the victim’s advisers? In theory either the victims themselves will have to pay (so goodbye to the recent ex-gratia payments) or the advisers will just have to stop working.

Conclusion (of the review). Professor Griggs, who may be a very nice man, is not the obvious choice as an ‘independent reviewer” as he has worked for the Bank and had a connection with David Mills through a Company of which he was an Officer. And let’s not forget any money Mills invested in shares or any shares he received as remuneration, came from tainted money or proceeds of crime.

There is absolutely no transparency regarding the review’s methodology – you cannot know how the Professor or anyone else plans to assess your life. If you do enter the review you will not know who the faceless panel are who assess your compensation but you do know their word is final – there is no appeal, debate or discussion. Take it – or leave it and find mega bucks to take the Bank to Court.

Paul and I are not part of the review but I don’t think we are the two people mentioned in the press last week because those people are going down the litigation route. As I know victims who are going down that route and as we are also not in the review, I think someone in the Bank’s press office was slightly confused when they said only two people weren’t participating in the review. Not least because I know of others who, like us, have agreed with the Bank we do not have to take part in it.

Then there’s the number of victims. I’ve been looking at the details of our investigation, which was by no means comprehensive but I don’t understand where the figure of 67 comes from? I can only assume the list doesn’t include shareholders or creditors. I would have thought HMRC would have complained bitterly about that as they are a multiple creditor – not to mention many local Councils.

The biggest disappointment for me (other than the long drawn out time scales, the lack of transparency and the bizarre pretence victims would find the review process acceptable) is the fact this whole situation has been premised on a lie.

I’m not going to go into detail on why I know this is a fact and a huge problem. However, I would just point out to Lloyds Banking Group that, had they done what Lord Blackwell told Paul and I the Bank would do and if they had swiftly, appropriately and generously compensated the victims (Lord B didn’t use the word generously but I’m throwing it into the mix because I believe that’s what he meant), there would have been no delay in compensation and there would not have been endless media articles about Lloyds Banking Group’s extremely disappointing conduct and lack of integrity.

Sorting out this shameful episode was/is not rocket science. All the victims have advisers or legal representation or can get it (there’s no shortage of lawyers offering to help victims). If the Bank had put forward 11 of their best advisers and given them 6 cases each and if the Bank’s advisers had liaised directly with the victim’s representatives, I’m guessing the whole process would have been over and done within a matter of 6 to 10 weeks. I fail to understand why that option wasn’t considered? Why does it have to be so tortuous?

To be clear Lord Blackwell, Mr Horta-Osorio and Mr Colombas, what the victims want is their lives back or as much as we can get back. That won’t happen until they have compensation and closure. I’m guessing the way things are going, the Bank’s major shareholders would also like to see some closure on HBOS Reading before more damaging information about Lloyds is exposed in the press.

It is possible much of what is happening now is designed to wear victims down so that if and when offers of compensation come, the victims will accept anything because they are just tired of fighting. That and the fact many victims are no longer spring chickens and don’t have the time for another prolonged battle. Worse still – some have cancer or other serious conditions.

Of course I can’t prove that theory (it’s not as easy as proving the fraud) but 10 years of dealing with the senior management of Lloyds Banking Group including Sir Win Bischoff, Eric Daniels, Harry Baines, Philip Grant, Antonio Horta-Osorio, Juan Colombas and, more recently, Lord Blackwell, has not instilled any confidence and even if I would like to believe what Lord Blackwell wrote in his letter, I am now struggling.

Where are we now? I have no idea. I’m not actually sure the Bank’s senior management knows but they probably do and this is all by design. Hopefully we will all know a bit more soon but and in the meantime, 30th June 2017 has come and gone and I can confirm the victims are far more disappointed than the Bank or its representatives.

Personally I am disappointed Lord Blackwell has either been insincere in his letter to Paul and I or, less likely, those in the Bank dealing with this matter are not inclined to listen to the Chairman.

 

Nikki Turner                                                                                                                10th July 2017