Lloyds shareholders have made a £14bn claim against the Treasury and bosses at the banking giant over its controversial takeover of HBOS in 2008.
Lawyers for campaign group Lloyds Action Now have written to the Treasury, Lloyds chief executive Eric Daniels and former chairman Sir Victor Blank, claiming investors were lured into voting for the acquisition without knowing Bank of England loans to the stricken HBOS amounted to about £25.4bn, The Daily Mail reports.
The Government and Lloyds bosses have 90 days to respond to a 'letter of claim' sent on Friday.
The Bank of England's loans to HBOS were made in October 2008 as the financial system froze after the Lehman Brothers collapse and just as Lloyds shareholders were considering the proposed HBOS takeover.
While the loans have since been paid back, the scale of the handout was not disclosed in the takeover documents and was not made public until it was revealed by Bank Governor Mervyn King in November. He said it had not been safe to do so for fear of sparking a financial panic.
Lawyers for the Lloyds shareholders argue that Daniels and Blank had a clear obligation to reveal the scale of the loans.
"Lloyds shareholders are bearing the brunt for having saved the banking system," Jim Rai of Winckworth Sherwood, the action group's law firm, says.
"They are picking up the bill on behalf of the country. They should have had a choice about whether they wanted to do that."
Lloyds Action Now, which has about 500 members, said the total claim could reach £14bn.
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