Tag Archives: banks

The Beneficial Lies – Who Did They Really Benefit? #banks #bankers #HBOS #Lloyds

I should be used to offensive or thoughtless language from bankers and bonkers behaviour by their PR teams but I was genuinely shocked this morning at various articles in the press today.

Top of the list are the two articles in the Times where the CEO of Lloyds Banking Group, Antonio Horta-Osorio (AH-O) gives chapter and verse on an incredibly stressful period of his life as Lloyds boss. Knowing a lot about stress and how debilitating it is, I fully understand that it doesn’t matter who you are or what your personal circumstances are – inside your own bubble, you are still having a crisis.

However, the subject of people getting stressed because of banks is such a sensitive one, given how many thousands of bank clients are stressed to the point of being suicidal, I wonder why on earth the PR department of Lloyds Banking Group would make the Banks CEO such an easy and obvious target for outrage?

I imagine being the CEO of a major Bank is a very stressful job – which is why they are paid mega bucks. But there are huge differences between being stressed because of a well-paid job which, if you really can’t cope, you can resign from and being stressed because a Bank has destroyed your life, your business, your future, your reputation and, in some cases, your sanity – and you can’t resign from this situation – or check in to the Priory – or retire and live on a pension which, unfortunately for you, you no longer have because and unlike Mr AH-O, you’ve been asset stripped of everything.

There is no comparison between the stress Mr AH-O has suffered and the stress so many SME owners (and their family, staff and shareholders) have suffered. Therefore, while I would never suggest the stress Mr AH-O suffered was of no consequence or that mental illness isn’t a very serious issue that should be given a better platform, his two articles are unbelievably insensitive and offensive to the many who are still in a very dark place through no fault of their own and, in some cases, because of Lloyds Banking Group.

In the same way I have always been very grateful to many journalists who have helped expose the Reading fraud (Ian Fraser, Tom Harper, Andy Verity, James Hurley, Siobhan Kennedy and many others), I am also very grateful to Jonathan Ford, City Editor of the FT for his excellent article about HBOS Reading which has coincided with the Mr AH-O articles in the Times. The online article came out on Thursday and the six-page hard copy article came out in the FT today (7th). Comparing the two articles, there’s a very stark example of the inequality the Country is suffering. Suffering for Mr AH-O meant he was put off his tennis game, he didn’t enjoy his family holiday in Indonesia and he suffered a bad bought of insomnia. Speaking as a victim of HBOS Reading, I can confirm my own version of stress was years of insomnia, no holidays and 22 horrendously stressful eviction hearings. I did consider suicide but only in a wishful thinking sort of way as I had two teenage daughters to think of and a very strong husband who has pulled us all through these terrible years.

I realise none of what I (or many others) went through alters how Mr AH-O was feeling back in 2011 and I genuinely hope he is fully recovered. All the same, if I was him I would sack his PR team because they made him a sitting duck and will, I think, cause him more stress.

I would imagine one of the most stressful things about Mr AH-O’s job is knowing the truth about the Bank and managing that truth. The other disturbing articles I’ve read today – or indeed in the last few days – are about how much truth has been buried for the benefit of the public. An article in The Times yesterday reported how the Bank of England was economical with the truth during the financial crisis. Andy Haldane, the BoE chief economist at the time said:

“It is not always and everywhere the case that greater openness and transparency is a good thing. And that’s certainly true in my world.

“Had we been fully open and fully transparent about what was going on during the financial crisis, it would, let me tell you, have been a lot, lot worse. That would have been [like] shouting ‘fire’ in the theatre.

Mr Haldane is right about one thing, the crisis in 2008 was considerably worse than the public was allowed to know. I’m sure everyone at the BoE was trying to juggle so many flaming swords, they all wished they could book into the Priory. Trouble is, years later and as the real truth comes out, many people are wondering if the lies told (and that’s what they were) were for the benefit of the Country or told in order to cover up the fact the whole Country had been collectively mugged by the Banks? The fire in Mr Haldane’s theatre could and probably was full of bankers and what the BoE did was bring in the Fire Brigade – but was it for the public benefit? If it was, how comes the whole Country has been crippled by austerity so the NHS is on its knees, the police can’t even afford to investigate the epidemic of financial crime our banks still persist in using as every day conduct, young people can’t afford University fees or housing and hundreds of families are relying on food banks? Is that how we benefited?

In the same way Lloyds Banking Group has been economical with the truth of what it knew about HBOS Reading, Ross McEwan has been economical with the truth about RBS GRG division, the BoE, FSA, FCA, FRC, PRA have been economical with the truth about  almost everything to do with the Banks and their auditors – I fail to see how this has been beneficial to the Country? Maybe it would have been had the BoE and the regulator used the financial crash as a lesson learned and made sure banks really did clean up their acts? But they didn’t so we can expect a new financial melt down any time from now.

All we have years later is a lot of stressed people – bankers, bank customers, bank victims – and a struggling economy. So who has benefited from all these beneficial lies? And how much longer will the lies or spin of the truth continue? Clearly it’s in full flow today and my guess is Antonio Horta-Osorio is still stressed and, needless to say, so am I as too are so many victims of HBOS Reading, RBS/GRG, Lloyds BSU and other banks BSUs. In fact, it wouldn’t surprise me if stress levels in this country are at an all time high.

 

 

 

 

 

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Paragraphs redacted from P&N Turner submission to PCoBS 24/08/12

These are the paragraphs which were redacted by the Commission’s support staff.

  1. The example of bank misconduct we have lived through from 2003 (and continue to do so) is a microcosm of what happened to the whole sector. While we are not professionals in the financial sector, we have been forced to spend the last five years investigating aspects of the banking industry.
  2. Between 2002 – 2007 many SMEs whose accounts were ‘managed’ at HBOS Reading, were forced to use the services of a consultancy firm, Quayside Corporate Services (QS), or have their facilities withdrawn. QS had no affiliation to any trade body for consultants and employed the services of known embezzlers. The cost to the SMEs for these services were between £2000 and £30,000 per month + VAT and expenses. In many cases HBOS insisted QS personnel or its Director became directors of the SMEs and were given full fiduciary control.
  3. Once QS representatives had control of the SMEs, the Bank then ploughed millions of pounds into them. A lot of this money was used to facilitate luxury lifestyles for Bank employees, QS staff and the QS Director. Many of the companies subsequently failed and their assets were sold in pre-pack administration to new companies ultimately owned by The Sandstone Organisation (we are reliably informed as being controlled by the Bank) but run by the Director of QS and/or his staff.
  4. In late 2006 the Bank sent a team from Edinburgh to investigate the loan book at HBOS Reading. In early 2007 the manager responsible for most of the loan book was suspended and subsequently resigned. Between 2002 and 2008, the Bank caused at least 80 SMEs who had the involvement of QS personnel, to go into administration and/or liquidation. We are told the overall losses to the Bank because of events originating at HBOS Reading, runs to billions of pounds.
  5. In April 2007 HBOS closed the business accounts of P&NT who had also been made to use QS and had complained of serious irregularities between 2004-2006. They became suspicious of the Bank’s sudden and aggressive stance towards them and, because any investigation promised by the Bank had not actually been done, they commenced their own investigation into HBOS Reading. By August 2007 they had uncovered evidence of systemic fraud and identified other victims.
  6. In September 2007 P&NT wrote to the entire Board of HBOS setting out their findings to date. The Board rejected the allegations. Also in September 2007, P&NT tried to inform the FSA of the fraud. The FSA did not start any investigation until mid 2009. In November 2007 they reported the fraud to the Cambridge Police who were persuaded by HBOS not to investigate. In May 2010, Thames Valley Police (TVP) and SOCU initiated ‘Operation Hornet’ to investigate what happened at Reading having, by chance, come across the case at a routine meeting at the FSA. They were not asked to look into it.
  7. 9 people have been arrested thus far as a result of Operation Hornet and charges are expected in September 2012 for ‘Corruption’, ‘Money Laundering’ and ‘Conspiracy to Defraud.’ TVP have said HBOS Reading is potentially the biggest banking fraud in British History. The Bank (now Lloyds Banking Group (LBG)) still denies the Turner’s allegations and have refused to compensate any of the SMEs destroyed as victims of the fraud.
  8. HBOS/LBG have tried to evict the Turners from their family home 22 times between 2007 – after they started their investigation – and 2010. Legal costs for a senior Solicitor to attend 5 of the eviction hearings and to deal with matters relating to HBOS Reading, have been paid via a false account opened by the Bank in the name of the Turner’s business, Zenith Cafe Ltd (ZC). Neither the Solicitor nor his Firm were instructed in the eviction proceedings. Approximately £363,000 has been paid from the account to Denton Wilde Sapte (now SNR Denton). By August 2011, circa £250,000 in penalty interest and charges had been added to the account which then showed ZC owed over £600,000. LBG have said this is not a case of false accounting and the Turner’s should never have been sent details of the account. The FSA is still investigating the circumstances of this account over a year on.
  9. The Turner’s have spent the last 5 years investigating the fraud at Reading and other bank frauds. Despite the thousands of factual documents establishing irrefutable evidence of fraud originating at HBOS Reading they have supplied to the police and the FSA, it is a sad fact no authority has had the power or, it seems, the appetite, to make the Bank deal appropriately with the matter. LBG remains in denial and the victims have remained in limbo for years hoping the authorities would act.
  10. A Parliamentary Commission on Banking Standards can only be of service to the Nation if the submissions and evidence it receives, is acted upon and not discarded because it comes from those who have individual and profound experiences of what has occurred over the last decade plus.
  11. From 2007, we have contacted (and in most cases submitted a lot of copy documentation to) nearly every agency and authority including the Treasury Select Committee, Constituent victims’ MPs, Government Departments, the Insolvency Service, the FRC, the CIB, HMRC, the senior Executives of the three Banks involved, the Financial Ombudsman Service, the FSA, the SFO, 3 police forces, two Prime Ministers and two Chancellors. Apart from Thames Valley Police (TVP) and specifically the ‘Operation Hornet’ Team, all have failed us with vigour.
  12. For example, we were recently told by a senior enforcement officer at the FSA, the Final Notice Public Censure of BoS, published on 9 March 2012, could have been published two years earlier but for the difficulty the FSA had getting the Bank to agree to it because of FSMA 2000 provisions.
  13. In an e-mail of 9th March 2012, Hector Sants personally advised us the 6 redacted paragraphs in the BoS Public Censure Notice, relate to HBOS Reading. Obviously we have not read the paragraphs and TVP have confirmed they have not read them either, though they were redacted to protect their investigation. The Bank has read them yet it continues to deny any malpractice at HBOS Reading over 5 years after it reported it as a ‘control issue’ to the FSA in ‘early 2007’ (see FSA ‘brief’ to TSC, March 2010).
  14. As a very serious example of how professional standards have reached rock bottom, we would ask the Commission how senior bankers: who are fully aware of the details of the fraud at Reading; who have read the redacted paragraphs in the FSA Public Censure; who have no doubt read Hansard on the debate about HBOS Reading of June 2009; and, most importantly, have clear evidence of how the billions of pounds the Bank lost because of the practices utilised in the HBOS Reading debacle, are able to repeatedly deny the fraud and therefore not compensate but persecute its customers?
  15. We give as an example of this, UKFI which, although it is not a bank per se, it was charged with protecting the interests of the public’s share in two of our biggest banks.
  16. We can confirm that, when we attempted to approach UKFI in 2009 to make them aware of the serious criminal activity in HBOS, which has since resulted in a 2 year major criminal investigation which could potentially damage the reputation of Lloyds Banking Group, we met with a number of hurdles – not least that UKFI has no contact phone number in the public domain.
  17. After a series of e-mails to the PR Company (who were very polite but who would not give us contact details for John Kingman or Glen Moreno) we eventually worked out the e-mail addresses and sent the information, which was in the form of a copy of a letter to Eric Daniels detailing the Reading fraud.
  18. Our letter, which gave explicit detail of fraud and corruption in a then bailed out bank, was ignored.
  19. In 2010 we attempted again to give information to UKFI.
  20. Again it was impossible to make direct contact and we were told (politely) by their PR company, it is because “UKFI do not have time to deal with the general public.”
  21. We are not surprised they have little time for the public as the senior executives of UKFI appear to feature very heavily in any number of bank hospitality situations. We use one of many links as an example: http://www.ukfi.co.uk/images/dynamicImages/Hospitality%20table%20April%2010-%20Mar%2011.pdf
  22. We understand ‘hospitality’ is now accepted as entirely normal in business. However, the millions of people who were severely affected by the events at RBS, HBOS and its parent Lloyds Banking Group, may quite rightly consider the remit of UKFI is to dine well – courtesy of the banking industry – while ensuring they have little or no contact with the shareholders they represent.
  23. We eventually wrote to Sir David Cooksey and Robin Budenberg copying them in on a letter to Sir Win Bischoff. We made the point a Parliamentary Authority Member had advised us to do this.
  24. The reply we got from a UKFI representative informed us: ”We would direct you to note our Framework document which governs the relationship between UKFI and HM Treasury as sole shareholder of investee companies. This document clearly sets out the requirement of the independence of the Boards of the banks; in particular, that UKFI ‘will manage the investments on a commercial basis and will not intervene in day to day management decisions of the investee companies’… UKFI operates as an active and engaged shareholder. We have no regulatory powers, and no power to demand any information from the banks which would not be usually be provided in discharging our duties…As you may have read in our Annual report and accounts, our remit is to manage the investments to create and protect value for the taxpayer and to devise and execute a strategy for the disposing of investments……
  25. UKFI, as part of their remit to protect value for the tax payer, did not feel a massive fraud in a bank the public bailed out, was of any interest to the organisation working on behalf of the public.
  26. Similarly, the BBA told us in 2009 that, if what we were saying was true, it was very worrying but they could do nothing about it.
  27. The FSA, when we first contacted them in 2007, would not give us anything other than a generic e-mail address to send sensitive and personal information of many of the victims of HBOS Reading – which, understandably, we would not and could not do.
  28. The FSA did not get involved in any investigation regarding HBOS until April 2009 and just before the Debate in Westminster on the Reading
  29. We have spoken to many people in the banking profession since we started investigating HBOS Reading and many of them have confirmed to us they work under a regime of fear where missing targets would severely affect the bonus structure which, many of the public do not realise, goes right through the banking system and is not limited to senior executives and traders.
  30. For example and notwithstanding the Reading fraud, HBOS informed us in 2004 they were sending an accountant to review our figures. They did not inform us this would cost us over £1000 for a one hour visit. Neither did they advise us before deducting this amount from our account.
  31. Another example is how the banks’ lawyers charged us £3000 for a standard debenture document while our own lawyers charged £270.
  32. In the case of the Reading victims, all of whom were/are Company directors, the losses to their businesses and to themselves, far exceeds £150,000.
  33. In our case, corporate governance has allowed an internal fraud to progress to a major police operation and FSA investigation because no one at Board level would deal with the matter appropriately, in either HBOS or LBG.. Or so it would seem given the repeated denials for 5 years that anything was wrong.
  34. We have pointed out to the various Boards under various stewardships (Andy Hornby, Eric Daniels, Antonio Horta-Osorio) and on various occasions, the potential damage to the reputation of the Bank because of the scandalous proportions of the HBOS Reading fraud, should have been curtailed and minimised by proper adherence to the Law and sensible damage limitation.
  35. We have no doubt the Bank executives considered it impossible we, as customers, would ever have progressed the investigation of the fraud this far. But that is no excuse for their lack of corporate governance which: a) allowed such a huge fraud to be perpetrated against the Banks’ clients and its shareholders in the first instance and; b) exposed an extreme lack of corporate governance which would put the good name of the Bank at risk and further penalise the victims of an internal bank fraud, by attempting to cover it up rather than exercise proper management, governance and damage limitation.
  36. We advise the Commission, a former HBOS Executive has confirmed to Paul Moore that, in the over £1 billion Reading fraud, only a minority of the Board were “in the know” in 2007 while the others were told HBOS Reading was a minimal problem concerning amounts up to £49M and it had been dealt with.
  37. Clearly this was a case of executive and non executive directors being kept “in the dark” as to the true events concerning the Bank’s risks. Again we would suggest non executives, because of their other commitments, are unlikely to seriously challenge reports from executive directors or committees.
  38. It would be wrong for us to go into any great detail of how we feel the internal audits and controls at HBOS between 2002 and 2007 were a total misrepresentation of the true facts, as we would go into territory that could be harmful to Operation Hornet. However, there is absolutely no doubt that, overall, HBOS and particularly Bank of Scotland had, by 2004/5, become the ‘basket case’ of banking. This is not a term we invented but a term we have heard used by many people in the banking sector.
  39. It could (reasonably) be said we are not the biggest fans of the FSA. However, we can only conclude that, in the case of HBOS, the information given to the FSA with regard to internal audit and control between 2002 and 2007, was, in many instances, a work of fiction – the Arrow Reports.
  40. This was clearly evidenced in 2010 when the FSA sent the TSC a document detailing their version of events originating at Reading and based on a ‘control issue’ reported to the FSA in ‘early 2007’. It was fortunate the TSC copied the ‘brief’ to us so we were able to amend the document with the true facts.
  41. On a specific note and given it does not fall within the remit of Operation Hornet, we would draw to the Commission’s attention the false account HBOS set up in the name of our Company, Zenith Cafe Ltd., to pay the Bank’s legal expenses relating to HBOS Reading. These fees were nothing to do with Zenith.
  42. The account was opened in March 2008 and we were not aware of it until we started to receive interest statements from January 2010 and letters advising a ‘£30 Excess Overdraft fee’ had been added and would we bring the account into line with its facility. In June 2011 and after two requests from the Company’s Accountant, we received all the historical statements which itemised debits and the interest and charges applied. We believe they were sent by a whistleblower and the Bank have since confirmed we were not supposed to have sight of this documentation.
  43. The bank have said this is an ‘internal account’ to keep track of the costs relating to Reading and they never intended to ask us, as Directors, for the money back. We already had letters asking for the money.
  44. Additional to the £372,000 for debits made from the account, predominantly for fees to Denton Wilde Sapte (now SR Denton), the Bank have added approximately £250,000 in penalty fees and interest thus eliminating the possibility this was an internal ‘managers obligation account.’
  45. The account clearly shows a £372,000 debt of the bank as also being a £600,000 debt of our company, so a credit of the Bank. Clearly it is false accounting which we have reported to the FSA and the police.
  46. The FSA, after one year of investigation, say they have not got to the bottom of the matter. We bring it to the Commission’s attention because we do not consider it is at all likely this account is in isolation.
  47. As external whistleblowers, we would warn anyone pondering this route to consider carefully what they are doing before they start. In 2007 when we first uncovered the Reading fraud, we believed it would be quickly remedied for the victims by reporting the matter to the Board of the Bank. Nothing could have been further from the truth.
  48. As noted in para. 13 above, we have, since 2007, contacted every agency and authority possible alerting them first to the fraud and secondly, to the untenable consequences for the victims.
  49. Five years on, the situation remains the same for the victims. The Bank remains in denial despite a two year criminal investigation; we have undergone 22 eviction hearings in 3 years in an attempt by the Bank to silence us and which the Bank paid its additional legal costs via a false account in the name of our company (the actual legal costs were added to our mortgage) and; we continue to live like paupers.
  50. Finally on this aspect, we have personally seen some extraordinary fantasy accounting and conclusions from the Big 4 auditors in the HBOS Reading scenario, including serious breaches of accountancy standards and breaches of the Law. We are not at liberty to evidence these breaches to the Commission at the present time but we certainly will be able to when Operation Hornet is concluded.
  51. In June 2011 we prepared a dossier establishing a ‘time line’ of the conduct of the FSA in relation to the HBOS Reading fraud. This document was copied to the Treasury Select Committee and we would be happy to submit the same to the Commission, if requested. It is a detailed example of the conduct of the FSA in relation to established criminal activity in a bank. Over a year later, nothing has changed for the victims of HBOS Reading and the FSA has taken no enforcement action against the individuals at any level and who enabled the Reading fraud to happen.
  52. At all costs banks will not admit any fault or accept any responsibility even where the evidence clearly promotes a different approach. We cannot calculate how much money HBOS and subsequently LBG have spent defending their position regarding HBOS Reading but almost certainly, the end tariff will cost much more than it would have cost had the Bank dealt appropriately with the matter back in 2007.
  53. We use this question to highlight all we have said in our document and, in order to give the Commission perhaps the most blatant example of just how low professional standards have gone in banking, we use the Farepak debacle as an example.
  54. Our interest in this case dates back some time as the HBOS employees tasked with the Farepak problem, are the same team charged with dealing with the SMEs whose accounts were held at Reading and whose businesses had Quayside Corporate Services imposed upon them.
  55. We have read some of the transcripts of the Farepak trial (May to June 2012). The case against the Directors of EHR was brought by the Secretary of State. It claimed those directors were responsible for 133,000 people on low incomes unwarrantedly losing money they had saved for Christmas vouchers.
  56. What the case actually exposed was how the HBOS team used ‘hard nose tactics’ to block any solution the Directors of EHR proposed in their attempts to save the depositor money and keep Farepak trading.
  57. We don’t intend to go into great detail and we do not believe the Farepak injustice is a closed book.
  58. EHR requested additional funding of £5M in April 2006 to trade the company out of a problem caused by the demise of its main voucher supplier. In its attempts to source this shortfall, which the Bank would not facilitate, EHR was made to spend well over a million in fees to accountancy firms.
  59. HBOS, who refused to ring fence any of the savers’ money already deposited, received a further, circa £18M between April and October 2006 from the Farepak savers. This cashflow was used by the Bank to reduce EHR’s borrowings and allowed the business to carry on trading.
  60. The EHR Directors pursued at least 7 different avenues to secure the funding during this period, none of which were acceptable to the Bank and the Company was put into a pre-pack administration at the beginning of October 2006 causing the savers to lose all their money.
  61. As a PR exercise, HBOS initially put £2M into the ‘Unfairpak’ campaign and more recently they have added an additional £8M. We believe the winding up of the Business will finally cost circa £9M.
  62. Therefore a total of at least £10M has been paid in fees by a business that was looking for £5M additional funding; the whole exercise has cost HBOS itself £10M plus a serious loss of reputation; 133,000 people lost a net total of approximately £25M of the £37M they thought they had saved to ensure their families had a good Christmas plus they suffered all the anxiety caused by this conduct.
  63. A team of 3 or 4 people under the ultimate leadership of Peter Cummings, who was CEO of Bank of Scotland in 2006, brought about this shameful situation. We would make the point; in the transcript, one of the 4 describes his job as being part of the ‘High Risk’ team in 2006.
  64. When we dealt with the same team of people in 2007, their title was ‘Impaired Assets – Structured.’ The difference between High Risk and Impaired Assets is very clear. High Risk may look at resolving a situation by the addition of extra funding. Impaired Assets has a remit which does not include the possibility of any additional funding whatsoever and almost always, unless the clients themselves have a financial resolution, has an insolvency outcome.
  65. The Bank’s position and conduct is laid out very clearly in the transcripts of the case, days 11, 12 and 13. We believe it begs a question of whether HBOS ever intended to find a solvent solution for Farepak or whether the team from HBOS was, in fact, the ‘Impaired Assets’ team who always intended to put Farepak in Administration and simply allowed the directors of EHR to go through the process of finding a resolution in order for the Bank to get in all the savers’ money?
  66. Having met this ‘team’ and having seen how the SMEs associated to HBOS Reading were dealt with by this team, we suggest there was never any intention of saving Farepak. And while we fully appreciate a bank has every right not to extend further credit to a customer (business or individual), we would point out to the Commission that, simultaneous to the Bank’s refusal to assist Farepak with further, minimal funding, it was ploughing tens of millions of pounds into a business with almost no turnover and which had been put under the control of the Bank via its consultants.
  67. In July this year we sent information to a representative of Unfairpak who attended a meeting with Dr. Vince Cable MP after the Farepak trial had concluded and which placed no blame on the Directors of EHR. Our purpose was to evidence the blatant ‘double standards’ the Bank was applying to businesses at the time of the Farepak demise. Following is an extract from our e-mail and the figures are factual:          “..The other thing we think you should know is that contemporaneously to EHR going into liquidation for the lack of £3M to £5M, BoS was ploughing millions of pounds into a company called Corporate Jet Services (CJS). Looking at their accounts and giving a rough calculation, we can see the Bank allowed CJS to increase its borrowings by £19.671 million between April and September 2006 and the turn over for the same period in the cash book was £497,770 of which just over £125,000 was a repayment of VAT from HMRC.
  68. The Bank would say of course, it is down to their discretion how much money they give companies. However, it should be noted the Bank owned all the shares in Corporate Jet Services and despite the tens of millions of pounds they put in to the Company, it went into Administrative Receivership on 26th September 2007 owing the Bank £113M, according to PwC’s Administrator’s Report. Post the appointment of PwC, the Bank allowed the Company to pay £26, 244,708.73 to one subsidiary which was then sold to the now ex directors of the company for £1.00; £2,407,314.31 to another subsidiary that was also sold to the ex Directors for £1.00 and also £333,912.40 to PwC, who had already received £160, 054.84 a month before the Company went down.
  69. In total, the Directors of the Company (one of whom is a main suspect in the Reading case) paid £7.00 and a promise to acquire all the assets of CJS leaving the Bank with a massive debt which, had they taken action in May 2007 when they first brought in PwC to produce a report on the viability of CJS, the amount would have been reduced by at least £6 million.
  70. Additionally, this company had a £800,000 agreed overdraft facility that should have been renewed on 27th November 2003 but wasn’t and by the end of April 2006 the Company had an unauthorised OD of £28.6M according to the accounts for the year ending 31st December 2004 filed at Companies House and which were signed off in June 2006.
  71. Some additional points to be noted from the above comparative scenario between CJS and Farepak. The person dealing with both situations for the Bank, was the same. The PwC person involved in both matters was also the same. The PwC person not only advised the Bank regarding the failed rescue packages in the Farepak debacle, he was also the Bank appointed Administrative Receiver of EHR.
  72. An editorial note concerning the above e-mail extract. It should be noted the sale of the CJS subsidiary Companies to the ex Officers of CJS for £7 and a promise, was completed immediately prior to the Company being placed in Administrative Receivership on 26th September 2007. The first payment stated above as being made by the Bank to one subsidiary Company for £26+M, was made on 27th September 2007 and the payment to a second and different subsidiary also sold on 26th September, was made on 9th October 2007. Both payments post date the appointment of PwC.
  73. We are now into our 9th year since we unwittingly became the victims of the HBOS Reading scandal. Even if we one day get to the end of it and receive the compensation we are undoubtedly due, no one can give us or our families back the 9 years we have lost.
  74. Similarly, no one can give back the Farepak victims’ Christmas of 2006. These are just two scandalous situations out of many caused by bad banking practice. The most worrying thing is – no one has done anything to curtail this sort of behaviour and it continues.

“Ill Founded and Misconceived” versus 47 Years In jail. Updated #HBOS Reading

I am adding this update to the blog I wrote last February and just after Lynden Scourfield and five others were sent to jail. That was over six months ago.

I was fairly optimistic throughout March and April that the Bank were going to do the right thing and swiftly even although I should have realised at our meeting with the Bank in March, the quest for justice and compensation from the Bank was going to be a long haul.  At that meeting the Bank’s representative expected us (Paul and I) to accept the statement “it is a fact that prior to the trial the Bank had no evidence of criminality.” He said this (and repeated it several times) to the people who have been sending evidence of criminality to the senior management of LBG and their lawyers since the merger with HBOS happened. So the statement was clearly a blatant example of “false truth” or whatever the latest fashionable definition is for “a lie” and it was never going to wash with us. You can’t rewrite history just the same as you can’t lie to yourself even if your bosses can insist you lie to others.

The latest hiccups include: the Bank are not (contrary to their reports to the media) prepared to pay the ‘reasonable’ costs for the victims lawyers/advisers unless they give the Bank chapter and verse on what they are doing for their clients. As if??? As if the advisers will tell the Bank the private and confidential details of the work they’re doing with the victims. Then, if the Bank’s faceless panel make an unacceptable offer of compensation and the victim has to litigate, the bank already have all their information supplied by the advisers. Do the Banks lawyers really think we are all that stupid? And of course the more obvious point – if the bank won’t pay the lawyers/advisers for the victims and the victims can’t pay them, the victims could end up with no legal advice vs the Banks magic circle lawyers.

Another hiccup: some victims who didn’t have dealings directly with Scourfield of Dobson but were in any event destroyed by their lieutenants,  acting on Scourfield /Dobson’s orders, have been told by the Bank they are not considered as victims. The criteria is you have to have dealt directly with Scourfield, Dobson or Quayside. But believe me, some of those working for Scourfield really enjoyed their jobs and were every bit as ruthless and criminal as he was – but they didn’t get arrested. Maybe they will one day but in the mean time I hope the Bank stop the absurd pretence that victims of Scourfield/Dobson teams did not suffer.

Some might say optimism is an ill advised trait in this day and age.  Nevertheless I still think Lloyds will ultimately do the right thing – the question is when? They didn’t meet their target of 30th June to compensate the victims and I wonder if we or the media should have asked Mr Horta Osorio whether he actually meant the deadline of 30th June was June 2017 or 2018? But they will have to do the right thing sooner or later because the alternative would cast serious doubt on whether the Bank’s Chairman and CEO are ‘fit and proper people’ to be running a Bank.

At the end of the day, the Bank’s lawyers can plot all they like to delay or decrease the compensation thus increasing their own remuneration. But the blame for prolonging the misery of people who have already suffered unnecessarily for so many years (it was unnecessary because both HBOS and LBG were fully aware of the criminality years ago) will not be laid at the door of the lawyers –  the blame will go to Lord Blackwell and Antonio Horta-Osorio.  I hope their lawyers are not trying to persuade them that won’t happen because that would be another false truth and potentially a very costly one.

24th July 2017

 

What a week!

As many people reading this will know, on Thursday 2nd February the Judge in the HBOS Reading trial sentenced the five delusional Defendants who pleaded not guilty and the one Defendant who did plead guilty, to a total of 47 years in jail. I was in Court for some of the proceedings and I know many people who couldn’t attend will want to know how it went.

Paul and I didn’t get to Court until about 11.45. Partly because we had the BBC at our house by 6.30am to do Breakfast TV, which was quite an odd experience because we generally get interviewed by people who know a lot about the HBOS Reading fraud. So I kind of felt we and Steff McGovern were talking about different stories and I hope we have a chance to go back and explain it to Steff in more detail so we’re on the same page!

By the time we got to Court it was packed. So packed all you could do was stand by the door at the back of the Court. A lot of press were there as well as a lot of the victims and they were doing the mitigation pleas when we arrived. I went in and listened for 20 minutes and then had to leave. I had to leave because one Defendant’s QC was talking about the hardship it would cause his Client’s family should he be incarcerated! Another pointed out his client was over 60 and in ill health!!!

I always think anger is a dish served silently and after reflection but I wasn’t sure how much longer I could stay silent or reflective in light of these comments. The families of scores of people including mine, have been devastated for years because of these people. Many of the victims have been serving a prison sentence for years and so have their children. We’ve had businesses trashed, no livelihood, no way forward because this has taken so long to reach a criminal conviction and we’ve been living on the breadline. On top of that our reputations, our credit ratings and our dignity has been smashed (yes Nigel, I pinched that from your excellent piece on BBC News at 10!).

Meanwhile, some of the people in the dock have been living like kings and indulging in every possible luxury (not always the luxuries that are to everyone’s taste) on the back of what they stole from SMEs. I say ‘some people’ because there were various degrees of ability or desire to indulge and these have been reflected in the Judge’s excellent summing up and sentencing.

On the subject of not being sent down because someone is 60 and in ill health – I am now 61, my husband is now 65 and we would consider our health to have been destroyed except for the fact other victims have fared far worse – at least five victims are dead!

I decided not to listen any more and I joined Paul in the corridor. I’ve done my best to keep Paul out of the Court room since September 2016. As many of the SME Alliance members will know, he has a photographic memory and I believe he would have been severely agitated to hear some of the evidence from both sides of the case.

We weren’t sure if the sentences would actually happen in the afternoon but fortunately they did. Again I could only squeeze into the back of the room because it was overcrowded. It was also incredibly hot and I began to wonder if people might start to feint from the heat and stuffiness – and the tension.

All through this trial it has been incredibly difficult to hear what is being said and Thursday last week was no different. People coughing, blowing their noses, turning pages of note pads (I was horribly guilty of that), people shuffling in their chairs and the Judge talking very quietly because of appalling acoustics – it’s been a nightmare. But everyone was doing their best to be quiet and hear what the Judge was saying. I don’t have to repeat what he said because it is documented, has been repeatedly reported on and is on the SME Alliance Public Interest page. But you had to be there or maybe you had to attend the entire trial, to get the impact of the Judge’s speech.

More than the sentences the Defendants’ got, I was grateful for that speech. He really got it – he really knew who these people were. The greedy ones, the stupid ones and the evil ones. Judge Beddoe knew exactly who was who in this trial and what their role was or what their importance was. This was so important. A Judge, any Judge, has to remain impartial throughout a trial and although all the way through the trial Judge Beddoe repeatedly picked up on things others in the Court missed, he was always impartial. But clearly he knew who he was dealing with and his speech before sentencing made that very clear. I and others have noted throughout the trial, Judge Beddoe is an exceptionally intelligent man and we were lucky he took this case. I am pretty sure he, like Paul, has a photographic memory – thank God.

Even in the middle of the chaos all around and with people cheering in the Court at the result, I genuinely felt for the first time that all the hard work Paul and I have put into this for 10 years, has been worth it. Not because these Defendants who, let’s face it, are either damaged, delusional or sad people, have been sent down for so long – in lots of ways I think losing their assets, their reputations and their livelihoods (like their victims) would have been almost as damaging as prison – but because I can now start to believe after all this time, perhaps our justice system can work.

I know all the victims of HBOS Reading will be grateful to the Judge, the Jury (they were brilliant), Brian O’Neil QC (Brilliant) with his team and Thames Valley Police (especially Mick Murphy) and, as you can imagine, it was a fairly emotional moment when the Judge read out 15 years for Mills, 11 years 3 months for Scourfield, 10 years for Bancroft, 4 years 6 months for Dobson and 3 years 6 months for Mrs Mills and Cartwright. I imagine it was even more emotional for them.

It would be wrong to focus on the downside after such a result but sadly there is one. We, the victims, won a battle last Thursday, definitely the biggest one we’ve fought so far – keeping that trial on track and getting the result (Paul and I have had to win 22 court battles over the last ten years to keep our house). But we haven’t won the war. HBOS have known about this fraud since 2006. Lloyds TSB have known about it since at least 2007 while Lloyds Banking Group (LBG) have known about it and certainly at a very high level, after the merger with HBOS in 2009. Peter Cummings, Andy Hornby, Lord Stevenson, Sir Victor Blank, Eric Daniels, Sir Win Bischoff and Antonio Horta Osorio. They have persecuted us and other victims for years in the knowledge every allegation we have made was correct. Why? How? How could this have happened? And even now when six people have been sent to jail for over 47 years, LBG are still putting out bland obfuscation as soundbites instead of doing the right thing. What will the latest Chairman of Lloyds Banking Group, Lord Blackwell, do now?

What will Andrew Bailey, the CEO of the FCA, do now?

HBOS could have resolved this years ago – so could LBG. It would have cost peanuts compared to what it will cost after the criminal trial. There must be a reason the Banks didn’t do the right thing? Is all this denial just hubris? Or is this because the management feel obliged to continue with their denials in order to stop an even bigger scandal coming out?

I’ve called this blog “Ill-founded and Misconceived” because that’s what the Deputy Chairman of Denton Wilde Sapte said about our irrefutable evidence back in 2008. He wrote this in a letter to us on behalf of the Board of HBOS and after HBOS had done various investigations establishing the facts as documented in the criminal proceedings. I think the ex Board members may well regret leaving the letter writing to Mr McAlpine.

One last thing – much as I think he was always fighting a losing battle and he lost, I was very impressed by Mills’ Barrister Kieran Vaughn QC. So that’s two names for the record – Brian O’Neill QC and Kieran Vaughn QC – just saying.

HBOS – The Long Road To The Truth SMEs Already Knew

I am of course delighted that yet another report is out about why HBOS failed and this time from the Treasury Committee. But I am also devastated to realise that 9 years after Paul and I started our investigation into HBOS; 8 years after we started writing letters and reports to the TSC; 8 years after journalist Ian Fraser and others published some of the unwholesome truths about HBOS and; 11 years after Paul Moore blew the whistle on the risks HBOS was taking, we now have yet another report arriving at the same conclusions we arrived at years ago re HBOS and the regulators. How can it be that such blatant misconduct has taken so long to identify?

As the truth becomes more and more apparent to the public, I can’t help feeling my family and many others would not have lived through 9 years of stress, anxiety and poverty had the authorities been prepared to listen to us when we first reported HBOS to them. Not just us and not just regarding HBOS but the numerous business owners who repeatedly report misconduct in our banks but whose views and allegations are not considered by any authority as we are not deemed to be ‘professionals’ with regard to the financial sector. Meanwhile the views and comments of bankers and other so called ‘professionals’ are given full consideration and endless hearings. I have been asking for a meeting with Mr Tyrie and the TSC for years – originally to give them information about HBOS and more recently to expose the collective issues of SME Alliance members.

I was disappointed again last week to hear Andrew Bailey, the new head of the FCA, pooh pooh SME Alliance to Andrew Tyrie – and, of course, we will not get a chance to reply except by letter. So while I’m really pleased the TSC is taking a more pro-active approach to miscreant banks and ineffective regulators, I really hope that in the future the voices from the SME sector are listened to earlier because we are on the front line and when it takes 9 years to expose the truth, we are the ones who suffer the consequences.

Here’s an extract from a letter to Andrew Tyrie and the TSC dated 27th February 2014 (the main part of the letter was about HBOS Reading so it can’t be published – yet).:

…..We bring this to your attention because this seems to be the crux of the problem between banks and SMEs:

There is no appetite from the authorities to prosecute serious criminality in the financial sector and because, it would seem, the FCA Objective of “Market Confidence” overrides all the other Objectives and Principles and even the Common Law. The Banks are fully aware of this and see no reason to stop the rape and pillage of SMEs because it is so highly lucrative for them.

The endless and substantial fines levied by the FSA/FCA against the big banks, are totally ineffectual in curtailing criminal activities or misconduct. How could these fines possibly work when no one is held responsible and the shareholders pick up the bill? We would ask how, in a democratic country, a bank can break the law by laundering money for drug cartels and yet no one is to blame? Do the drug cartels pick up the phone to an anonymous voice at a call centre specifically in place for money laundering – Press 1 for drug money, 2 for tax evasion, 3 for arms deals? Or do real people in the banks negotiate these deals? As we understand it, money laundering is considered to be a very serious crime – unless, apparently, you are a banker. And if Banks can override the law of the land so successfully, what hope is there that the authorities will step in to protect small businesses? And we have seen startling evidence where HBOS have been able to manipulate the justice system to keep the Bank and its employees out of criminal trials.

We have asked, on more than one occasion, for a meeting with you Mr Tyrie. The evidence we hold (which is not all with the police or the FCA – mostly because they do not want it under their remits) is, as our friend Mr Ken Olisa has described it, a time bomb waiting to go off. And even we, who are truly disgusted by the behaviour of some senior bankers, feel we should share the evidence with someone in authority. Not least because our 6+ years of work should be used to stop financial institutions being able to set up situations like HBOS Reading or GRG. Sub judice cannot last forever. Neither can the victims of these devastating crimes against small businesses be asked to rely on authorities who repeatedly do nothing to remedy the situation. And we believe pressure should be put on both Lloyds and RBS to rectify their bad treatment of SMEs before the true facts surrounding HBOS / Lloyds Banking Group are fully exposed as a last resort. ……

..Surely the time has come when the TSC has to listen to the voices of those business owners affected. We have watched the endless TSC/PCoBS interviews with bankers like Lord Stevenson, whose performances and explanations, quite frankly, beggar belief. But we never hear the TSC interview people from the other side of the fence. We never even hear about this being done ‘in camera.’

We can assure you the FCA has no interest in talking to individuals outside of the sector; the FOS is ineffectual when it comes to SMEs and; the police take little notice of reports of criminal conduct by banks if the report comes from individual business owners. In our case, when we made allegations of criminality at HBOS to the Cambridge police in 2007, we were told we were simply ‘”collateral damage” and only the Bank could request an investigation. The Bank, of course, did not want an investigation and insisted nothing criminal had occurred. Worse still, there is nothing the banks like more than to fight allegations against them by SMEs in the Civil Courts, where their highly paid legal teams rip business owners to shreds.

So who can SME owners report to Sir? As things stand, no one. And where can they get justice? No where. Our only hope is the Court of Public Opinion – and even that is becoming an increasingly lame option because most newspaper editors are unhappy to publish anything but the most generic of banking misdemeanour’s like PPI or IRSA. They need the advertising revenues and financial support from banks and, in many cases, the interests (some might say contamination) of executives who are board members of both banks and media groups, are instrumental in blocking adverse publicity.

What we need, without doubt, is a reliable and official method of communication between business owners and Government agencies like the FCA and the TSC. This must include people with first hand knowledge of serious malpractice by banks and/or bankers. We don’t suggest every business owner with a gripe against a bank should have access to the TSC. But where major frauds are perpetrated against multiple SMEs, we believe the TSC should be willing to listen to business owners and, further more, the banks should know the TSC will listen”……

Much has been said previously about giving the FCA more powers (to do what I wonder?) – personally I would like to see the TSC have more powers to act on all the information supplied to them. Because while I’m sure the great and the good dread being grilled by the TSC, ultimately they know little will come of it and that is a terrible waste of resource, time and opportunity. The TSC should be able to take action on their findings. Alternatively and as this latest report suggests, a completely separate agency should deal with enforcement of financial regulations. Either way someone should be able to deal more effectively than the FCA with financial misconduct and/or economic crime and it should be done in a timely manner – because 9 years is a long time to wait for justice. Not that we’ve seen much justice yet.

One last thought – we’ve recently had the FCA report into HBOS, the Andrew Green QC report into the FSA’s conduct in relation to HBOS and now the Treasury Committee report on Why HBOS failed – and that’s on top of the Bank of Scotland Censure report and the PCoBS report. We have all these reports identifying failure, negligence, incompetence and whole host of other issues  – so what happens next? Anything? Will we start to see bankers really held to account – will we see bankers prosecuted where appropriate?

Or will Mr Bailey’s comments in the Telegraph 14th December 2012 suggesting we can’t apply ordinary law to bankers, still hold fast:

“…would be a very destabilising issue. It’s another version of too important to fail. Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen and I’m not saying we are going to see… this is not an ordinary criminal indictment.” http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

The Village Of The Dammed – How Did We Get Here?

The other night I watched John Carpenter’s ‘Village Of The Dammed.’ I’ve seen it before and, much as I like John Carpenter films, I’m sure he would agree it is a bit dated (although the message is still very clear). But you know what it’s like when you get to that point of the evening, after an exasperating day, when you end up watching whatever happens to be on the TV but without making a conscience choice? Well that was me.

Some times I think nothing is random. As it turns out the film was actually so relevant to life in the 21st Century, it was even more scary now than when it was made. All the way through the film I kept thinking – this is where we are now. A very small minority has the ability to control and torture the majority. In that case it was a bunch of children sired by an alien life form. In our case it’s a bunch of bankers who don’t only have control over the people but also control over Governments. The same Governments who profess to work for the people because they were elected by the people – but, it would seem, are terrified of the banks.

It’s been interesting therefore to realise there is one species that considers itself superior to everyone – the so called Elite which includes bankers but also sharp practiser’s who are so wealthy they believe (and who would realistically question them) they are a cut above everything and even morality . Which is why Philip Green – the mega mogul who has been unbelievably successful in getting multi millions from banks can, it would seem, simply refuse to attend a hearing in front of a Parliamentary Committee if he doesn’t want to. Not only that, his terms for attending are so ludicrous (he requires the resignation of the Chair of the Committee) he knows they would never be adhered to – so he just won’t turn up and he’s off the hook. In a world full of sharks, there is always a bigger shark somewhere.

For anyone who doesn’t know who Philip Green is – he is the name behind a whole host of High Street stores like Top Shop, Debenhams, Dorothy Perkins, Burtons etc. etc. and, of course BHS. BHS which went into administration recently causing the loss of 11,000 jobs and with a £500M plus deficit in the pensions fund.

I think it would take a team of forensic accountants a very long time to get a clear picture of Sir Phil’s business empire and I’m not sure it would be possible unless all those Countries participating in the ‘off shore accounts club’ were to reach a unilateral agreement on transparency. It’s more likely Boris and Dave would make up and form a new State with Putin as its leader.

So this is where we are:

Our banks are so big they cannot fail. Our Government is so afraid of offending financial services they have agreed to the terms of La La Land. We have laws but they don’t apply to everyone and in part because the majority of people can’t afford the process of accessing the Courts let alone applying the laws. Our regulators (should I add our honoured regulators) seem so biased towards their remit of ‘Market Confidence’, they’ve shelved ‘Consumer Protection’. Our auditors are so reliant on mega bucks from Corporations they wouldn’t say boo to a toxic goose even if it was about to suffocate every one in a thousand mile radius. And, to add insult to injury, we have people like Philip Green who has milked the banks (including banks bailed out by the tax payer), and is now demanding the resignation of the Chairman of a Parliamentary Commission because – well, what better way to get out of answering any questions about anything.

If MPs annoy him enough, I dare say he’ll be so miffed he’ll close down the whole kit and caboodle, sell up and retire to Monaco. Yes he might lose his Knighthood but does anyone really think he gives a rats arse about a title as opposed to the several hundred million pounds it would now cost him to keep it? And if he did pay to keep it, how honourable would that appear to be? It wouldn’t change what happened to BHS or the cavalier way 11,000+ have been treated. It would just mean a billionaire dropped a few hundred million to remain a Knight of the Realm. What value would that put on being a Knight Of The Realm?
None of it says much for the progression of Capitalism. Not that Socialism, Communism or Fascism have worked too well either. So where do we go from here? Have the so called ‘Elite’ won the day? Have we come so far a billionaire can take delivery of a multi million pound yacht while thousands of people lose their jobs and their hard earned pensions and there’s nothing anyone can do about it? Unfortunately I think the answer is yes. Legally Parliament has no power over perceived inequality and proving a legal case against a smart operator getting incredibly wealthy at the public expense, is a non starter. Morally, Parliament has every right to ask questions but legally (and it’s all about the law), what good can pointing out moral obligation do?

Many people have watched ‘The Big Short’ and many people have been shocked by it – but most people in SME Alliance won’t be. Most of them are living with the consequences of the laws of La La land. The members of SME Alliance are exasperated at the way in which bankers have trampled over our businesses and our lives and we have made a small but definitely recognisable protest. We’re not particularly brave at SME Alliance but so many of us have been put with our backs against the wall we have had to collectively object and come out fighting. I’m sure, to those running multi billion Corporations, be they banks or business empires, they feel we are no more than gnats trying to infiltrate a Rhinoceros hide. If the likes of Philip Green can brush off Parliamentary Committee’s in such a cavalier manner, it doesn’t hold out much hope for us lesser mortals. Or does it?

People power – when enough people recognise corruption and inequality is getting out of hand, the results, historically, have repeatedly been surprising. The EU Debate will be the best test of people power. Whether you’re IN or OUT, it’s becoming more and more apparent that the people running both shows just don’t know any more which way the public vote will swing. And that has been a wake up call for those who thought the public were neither here nor there in the debate. As it turns out, it wouldn’t even be easy to rig this vote because there are strong forces on both sides.

However, if we do come out of Europe and for many reasons I have always been for Brexit, I see no bright future for Britain while we remain entirely under the control of an elite minority who can’t even be called to account by Parliament. Staying in Europe or coming out will result in little change unless we re-instate democracy, morality and the law – and we’re a long way from that while the powers that be have no ability to ask questions, let alone hold people to account. Even if Philip Green does turn up and answer questions in front of the Parliamentary Committee and even if the Committee don’t like his answers, what can they do about it?

As it turns out, ‘The Village Of The Dammed’ is not as dated a concept as I thought.

Now Is Not The Time To Stop Lobbying For Ethical Change.

I wrote this blog at the beginning of February this year but didn’t post it – I can’t remember why and I probably just got distracted by something to do with a bank! Anyway, today the article about George selling off Land Registry reminded me about this blog and why charitable or not for profit organisations like SME Alliance need to be lobbying more rather than less – and now we also need to lobby for the right to lobby!! If we don’t, I fear very soon freedom of speech itself will be threatened.

Happy Easter to all.

Nikki

Now Is Not The Time To Stop Anyone Lobbying For Ethical Change.

It seems the Government are closing yet another door to democracy. I find the announcement last week that charities cannot use State money (tax payers money) to lobby for any changes in the law, quite sinister and quite sneaky. Not least for charities who campaign for justice – of which there are many. I suspect funding from Government is quite minimal to such charities anyway but, whatever the amounts, it is likely to be diminished to any charity that dares to speak out against Government policy.

What I find so offensive about this new ruling is the fact that while Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, is right and this could result in charities, taking “a vow of silence”, it will also very definitely mean even less opposition or challenge to the mighty ‘lobbying machine’ of big business. It is already an inequitable situation because most charities are struggling for any kind of funding post the credit crunch and unlike big business, charities are not based on profits but on positive action for good causes. When charities lobby for a change in policy or law it is generally in reaction to what they have seen as the consequences of either ‘bad law’ or evolving necessities. When big business lobby’s, the goal is invariably market share, shareholder value, reduced regulation or, let’s face it, how to keep fat cats fat. And in far too many cases, ‘The Ministry of Revolving Doors’ means MPs or regulators have a keen interest in keeping big business happy.

I’m no expert in lobbying but, even a quick surf of the net shows just how important lobbying is. For example this simple explanation in the Guardian (March 2014) clarifies what lobbyists do:

http://www.theguardian.com/politics/2014/mar/12/lobbying-10-ways-corprations-influence-government

To a certain extent we are all aware of what lobbyists do and we’ve got used to the idea some companies believe (probably correctly) the best way to get results is to rely on the familiar maxims “you get what you pay for” and “it’s not what you know, it’s who you know.” If there is no other side to the coin i.e people lobbying for something just because it is fair, equitable and with no financial gain, then what we’re really doing is paving the way for important laws and policies to be swayed or decided on a ‘highest bidder wins’ basis.

What the Government is proposing is a curb on legitimate challenge by charitable organisations by restricting their ability to fund lobbying activities. This is rather like our inequitable two tier justice system whereby very few individuals or SMEs can ever challenge big business (especially banks) in the Courts because they have been priced out of the system.

I found an interesting article in the Bureau of Investigative Journalism about our Top 10 most powerful lobbyists – although the article does date back to 2012 and this list of names has probably changed by now:

https://www.thebureauinvestigates.com/2012/07/13/britains-10-most-powerful-finance-lobbyists/

Of particular interest to me was No.2 on the list, Anthony Browne, Chief Executive of the British Banking Association. This organisation is funded by its members – the banks – to the tune of £7,729,000 in subscriptions (2014) and no one can say Mr Browne hasn’t done a good job (from the bankers point of view). Recently we’ve seen; the review into banking culture cancelled; various reports delayed for so long it means they are now about as useful as wet loo roll; a complete u-turn on holding senior bankers responsible for what happens in their banks and; any number of deals brokered for banks to pay their way our of repeated misconduct against consumers, breaches of financial regulation or even criminal prosecutions. Even if Mr Browne has slipped down to 4 or 5 on the list, surely it is hugely important to maintain a serious opposition to the powerful banking lobby?

If I had to say which banks have been most damaging to the members of SME Alliance, I’d say RBS is top of the list, followed by Lloyds/HBOS. Both banks were bailed out for billions of pounds by the tax payer and they have both paid a fortune in fines or compensation for various examples of misconduct. Both have representation on the BBA Board:

https://www.bba.org.uk/about-us/bba-board/

And both are represented by one of the most powerful lobbyists in the Country (and Mr Browne is just one of many powerful lobbyists for the financial sector). So – tax payers bailed out these banks and they are able to use tax payers money to lobby at the highest levels of Government in the same way they have used tax payers money to pay their fines, fight their battles in the Courts and continue with their telephone number pay packets to their senior executives. But the charities who are busy mopping up the catastrophic austerity the banks were so instrumental in causing, cannot use tax payers money to lobby for change or reform in banking or anything else.

Why? Because, according to Cabinet Office Minister, Matthew Hancock “Taxpayers’ money must be spent on improving people’s lives and spreading opportunities, not wasted on the farce of Government lobbying Government.”:

http://www.dailymail.co.uk/wires/pa/article-3434720/Charities-set-ban-using-Government-grants-lobbying.html

Yes, you have read that correctly – charities can’t spend tax payers money lobbying MPs for anything because the Government wants all charitable donations made on our behalf to be spent on making our lives better. And if you believe that, you’ll believe anything. I think Mr Hancock is relying on the logic of La La Land and his statement is wrong. As long as this Government continues to be happy for the Country to be run for the commercial gain of a minority, it is crucial tax payers money is spent on exposing such an undemocratic system and that charities have every opportunity to be as vociferous as possible about any and everything they identify as detrimental to society because of bad law, bad law enforcement or inequitable access to justice.

Reading the list of the top 10 most powerful lobbyists in Britain, I would say the financial sector is becoming a bit of a ‘lobbying cartel’ which doesn’t just have the ear of the Conservative party, it controls the whole head, arms, legs and torso. When the Conservatives were voted back into power, it seems the real victory was for ‘The City of London’ and now the ‘masters of the universe’ have found another way to make its ‘puppet’ limit any further opposition to its avaricious and anti social plans. What next I wonder? We’ve already seen the results powerful lobbying has on Government (all three of the main parties) – the most obvious being soft touch regulation of a corrupt financial sector that brought the whole country to its knees and has seen thousands of people relying on food banks. Now we’re going to see ‘the consequences of inequitable lobbying power.’ Maybe we should all order in a good stock of banana’s before the next insidious brain wave.

Ironically and without doubt this latest and dangerous lunacy has come about because of powerful lobbying. And the spin factor, that ‘it’s all for our own good’, is very offensive and implies this Government thinks we, the public, are all very stupid. Now is not a good time to stop Charities lobbying – it’s time we all started lobbying our MPs to take power back from big business before we really do become a Banana Republic.

Justice delayed is justice denied #HBOS

I wrote this blog on Tuesday 6th October 2015 but I didn’t post it because I didn’t want to tempt fate. Unfortunately fate is doing it’s own thing right now and my premonition was no more than logic. Dressed up in different clothes but all the same, on 9th October 2015 the HBOS Reading trials were put back to September 2016.

There is nothing in this blog that breaches sub judice. This isn’t about the merits of the case it is only about the conduct of the case and I make no mention of the content of the allegations. I would however point out that 9th October was a very very sad and even catastrophic day for a lot of people – but, as always, that seems fairly immaterial to the situation and, as far as I know, no one considered the victims when the case was moved.

Justice delayed is justice denied (written 6th October 2015).

Six years ago today Paul and I finished writing a report for the FSA on the subject of HBOS Reading. At that point we had already been investigating events originating at HBOS Reading (that’s the PC description) for over two years. Also at that time we were living on the bread line, our business had been trashed, HBOS/Lloyds had already tried to evict us about 17 times (22 times in total) and no one was really interested in our allegations of fraud.

In 2010 Thames Valley Police finally started an investigation and 12 people have been arrested. It took until January 2013 for anyone to be charged and the criminal trials were due to start in January 2015. But in October last year, the victims of HBOS Reading were suddenly told the trials had been delayed for a year. They are now due to start in January 2016 – or are they?

Call me a cynic but the articles in the press yesterday about the Chancellor, George Osborne’s intentions to off load £2BN worth of Lloyds shares with various discounts and incentive schemes thrown into the pot, rang some alarm bells. This bargain basement sale is due to have completed by Spring 2016 and I can’t help but wonder if a major criminal trial about events in Lloyds unruly pup HBOS is really going to persuade the public they want to get involved with Lloyds?

Of course Lloyds don’t need to rely on the antics at HBOS to tarnish their reputation. At SME Alliance we see examples of outrageous and potentially criminal bank conduct every day and while it would seem Lloyds can’t actually hold a candle to RBS, they don’t do so well in the popularity stakes. Lloyds have huge issues to address and plenty of group litigations to look forward to. Do they care? According to Rowan Bosworth-Davies, giving a powerful speech at an SME Alliance meeting yesterday, top bankers consider themselves to be a protected species. I have no doubt he’s right and that’s exactly what they believe.

However, what worries me more than the conduct of bankers is the conduct of politicians and the judiciary.

To be honest, if I was George Osborne I would be absolutely desperate to get rid of all and any shares in RBS or Lloyds – and he clearly is. Apparently RBS are now going to buy back their own shares to help the Government out: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11900014/RBS-could-buy-back-its-own-shares-to-aid-Government-sell-off.html

Meanwhile Lloyds are now going to become the best thing since SID. Fine, and I really wouldn’t care (because I can see why George is doing it, although the ethics of letting RBS buy their own shares with the money they borrowed from the State, does seem something that would have Mr Micawber turning in his grave) except that, in the case of Lloyds, I have a horrible feeling that all those skeletons Mr Horta Osorio wanted dragged out of the cupboard when he took over as boss, are about to be put back in and even bricked up.

HBOS is a delicate subject in anyone’s book and I suspect the forthcoming book ‘Crash Bank Wallop’ by Paul Moore, the HBOS Whistleblower and a good friend, will be considered by some as being as delicate as the trigger on a hand grenade! There’s nothing the authorities can do about that and I dare say Mr Horta Osorio will react in a similar way to David Cameron when Lord Ashcroft’s book about him came out. In the name of dignity he will just try and ignore it. But it will rankle and it will beg the question “why the hell did Lloyds get involved with a basket case bank?”

Then there’s the HBOS report which apparently some MPs are getting a bit tetchy about. As I blogged the other day, we have been warned about the likely redactions. But in my opinion, redactions won’t be enough. I think it’s likely to be delayed again and, if not, the redactions and re-write’s to protect the great and the good (not Hornby, Cummings, Stevenson or Crosby – I don’t think they are a protected species any more) will mean the report has limited value. We may get something in October as we’ve been promised but I’m guessing the full report, when all the Maxwellisation and Re-Maxwellisation has been completed and enough lawyers have made sufficient money to sail off to the Cayman Islands in a beautiful pea green boat, will appear late Spring and after the Lloyds shares have been sold. And on whose orders?

A lot of people will be eager to read Paul’s book and the HBOS report (believe me, the book will be the better read). However, the victims of HBOS Reading are not waiting to read a book. Not even my book which is about HBOS Reading. We are waiting to get our lives back and we’ve waited a very long time. Given the trials are about events that happened between 2002 and 2007, some of us will have been waiting 14 years by the time the trials are over. And the idea (and it is only a suspicion) that the trials will be moved again to fit in with the Lloyds share sale or for any other reason, makes me feel physically sick. Not only because I am tired, I’ve had enough and I want out of the nightmare this has become – but because I am literally terrified at the idea politicians can manipulate the criminal justice system to suit their ends and those of the 1%!

Surprisingly I have a lot of friends who are lawyers, barristers, QCs and even the odd Judge. They are good people and I know many of them care passionately about justice. They are also common sense people and I know many of them have campaigned against the cut in legal aid and the rise in court costs for people who can ill afford to take on gigantic corporate organisations.

SME Alliance relies on the good advice we get from good people in the legal world – some of our members haven’t always had good advice but we are gradually getting together a very good team. When I explain to my friends how often the Reading trials have hit delays and for how long, they are shocked. I’m not sure our new friend Rowan Bosworth-Davies will be shocked if, for what ever reason the HBOS Reading trials are moved to late Spring. I don’t think my good friend Brian Basham will be shocked nor will Paul Moore be shocked.

I won’t be shocked but I will be devastated. If it happens and I genuinely pray we won’t have another delay, it will cause untold pain, misery and unhappiness for a group of people who are already at the end of their wits. And personally, whatever reason is given for another delay, I will find it hard not to think it is to accommodate George Osborne’s sale of the Lloyds shares. And, were that to be the case (although of course that would never be the reason given) that would be a bad day for democracy and for truth and justice because, whatever politicians do and what ever power they have, they should never have the power to interfere with justice.