Another scandal is threatening to engulf Lloyds Bank boss Antonio Horta-Osorio before he signs off next year.
The Portuguese chief executive has admitted he knew of an alleged fraud in the HBOS Bristol branch which may have affected hundreds of small business customers.
Lloyds may now face a criminal inquiry over the events in Bristol, which could drag in figures including Horta-Osorio.
Signing off: Lloyds boss Antonio Horta-Osorio, pictured with his wife Ana, is set to step down next year
Kashif Shabir, a Cardiff landlord, saw his business placed into receivership by Lloyds in December 2009. Along with around 200 other customers, he claims to be the victim of a complex corporate fraud.
Together with hundreds of other claimants, Shabir has submitted evidence to Avon and Somerset Police.
He has spent more than six years battling Lloyds, and turned down a settlement which would have forced him to give up his right to pursue any further legal action.
The scandal dates back to before Horta-Osorio was chief executive, but there are questions about his handling of the affair.
The Lloyds boss acknowledged in a letter to Shabir’s MP, Jo Stevens, that he had been aware for several years of the alleged fraud, saying it had been ‘the subject of close scrutiny at senior level’.
Shabir borrowed money to fund his business in 2007 but things went awry in the financial crisis. After he missed some loan repayments, Lloyds commissioned a property agent, Alder King, to revalue his portfolio.
He claims the firm revised the value of his properties down so heavily that the bank then put his business into receivership.
Alder King later earned significant fees when it was appointed as the independent receiver of Shabir’s business and sold off the properties – in some cases for almost twice the value it had said they were worth.
The company denies under-valuing the properties and denies any wrongdoing.
Shabir believes that the bank wanted to clear his low-interest loan off its books so it could deploy the capital released on more profitable business.
Cardiff landlord Kashif Shabir claims to be the victim of a complex corporate fraud after his business placed into receivership by Lloyds in December 2009
Scores of other business owners claim they were driven to the wall by banks, including RBS as well as Lloyds, to bolster their own balance sheets.
In the infamous HBOS Reading affair, customers at a branch – now part of Lloyds – were fleeced by bankers and consultants. And in the GRG unit at RBS, businesses faced high fees and forced sales of assets.
Shabir wants to meet Horta-Osorio but the Lloyds boss has declined. ‘Antonio has admitted in writing that he and all the other senior managers have known about this for six years. Just the same as with HBOS Reading. We want to show him the evidence,’ said Shabir.
He says the ruin of his business caused severe stress as he tried to provide for his siblings after his father died. ‘Lloyds has no idea of the mental issues they caused. It affected my family,’ he said.
In cases like Shabir’s, the firms which complete valuations, advise the bank and act as receivers to sell the assets should be independent of each other – to avoid conflicts of interest where one could create business to benefit the others.
But Shabir has raised concerns over Alder King’s ties to Lloyds. He claims they colluded to wreck his business.
One employee of Alder King introduced himself to Shabir, via a Lloyds email address, as a ‘colleague’ of his bank manager, and later corresponded with Shabir on Lloyds-headed paper.
The man was in fact Alder King’s head of receivership, raising an apparent conflict of interest.
Lloyds says he was working there on secondment, although a senior bank manager at the branch said in an internal email that he had ‘not located any paperwork’ making this clear.
The bank has investigated Shabir’s treatment, and found no evidence of wrongdoing.
Shabir commissioned a senior criminal barrister to review his evidence. The lawyer’s report states that chunks of it ‘are indicative of criminal activity’.
The Avon and Somerset force has agreed to arrange a meeting with a fraud investigator, to review documents in detail.
Lloyds said: ‘While we understand this long-running dispute over the failure of his business has been deeply upsetting for Mr Shabir, his allegations have been reviewed a number of times and found to be without foundation.
‘Should he have new material to support his complaint we would be happy to review.’
Alder King said: ‘These allegations were the subject of a lengthy and thorough investigation by our professional body, the Royal Institution of Chartered Surveyors (RICS).
‘The RICS found no evidence whatsoever of professional misconduct on our part and cleared us of any wrongdoing.’
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