>
£7m inflated by useless HBOS research: That included over £2.7m spent on lawyers, accountants and other experts
Weiden new: The bank’s then-boss Andy Hornby (pictured) is now chief executive of The Restaurant Group
A six-year investigation into the collapse of lender HBOS – which showed no further action was needed against its bosses – cost £7.2 million, the Daily Mail can reveal.
That included more than £2.7 million spent on lawyers, accountants and other experts brought in to help comb through mountains of documents.
Few details about the investigation have been made public, but now Lord Darling – then Chancellor – has called for the findings to be made public.
The collapse of HBOS came at the height of the financial crisis and ultimately resulted in a £20 billion taxpayer bailout.
The bank’s then-boss, Andy Hornby, is now chief executive of The Restaurant Group, which owns the Wagamama and Frankie & Benny’s brands – and was paid £1.2million last year. An investigation by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) into senior executives at HBOS ended earlier this year, but the watchdogs have not released detailed rationale for the decision not to take further action.
There is only a three-page press release announcing the conclusions of the investigation – showing that it has searched 2 million documents.
The PRA – the regulatory arm of the Bank of England – and the FCA, at the time of the investigation’s conclusion in August, claimed it was “rigorous and forensic”. They said they had no plans to release further details.
But the Daily Mail can reveal today that the cost of the investigation – disclosed by the Bank of England under freedom of information rules – was £7.238 million.
That included internal costs for the FCA and PRA employees who worked on the case, as well as separate costs from two independent decision-making committees within each organization. It also covers external costs amounting to £2,711 million for hiring legal counsel, forensic accountants and contractors to assist. Yet the details of what they found remain hidden from the public.
Lord Darling told the Mail: ‘There is a clear public interest in understanding why decisions are made. To do justice, it must be seen. Findings must be made public.’
Halifax Bank of Scotland collapsed in 2008 after collecting £45 billion in bad debts. That resulted in a government-rigged takeover by rival Lloyds, which in turn had to be bailed out by the Treasury at a cost of £20 billion, increasing the public sector debt mountain.
Central to the latest research was the question of whether former top executives should be banned from the financial sector. This was prompted by a report finding that a previous decision not to investigate ten senior executives, including Hornby and HBOS chairman Lord Stevenson, was ‘materially inaccurate’.
A separate report from the FCA and PRA in 2015 found that HBOS’s board was pursuing a “flawed and unbalanced strategy” based on lending more money for short-term profitability.
Only one former director, Peter Cummings – then head of corporate lending at the Bank of Scotland – has been punished.
He was fined £500,000 and banned from the city in 2012.