A group of Lloyds shareholders suing directors over the 2008 HBOS takeover will use the LIBOR scandal as further proof they were misled into backing the deal.
Lloyds Action Now (LAN) has instructed its lawyers to incorporate the allegation that Lloyds TSB directors knew that HBOS's real interest rates were not being quoted at the time they recommended the merger.
The group has been campaigning for the past three years for compensation for the 800,000 private shareholders who lost up to 90% of their investment as a result of the deal. It is in final negotiations with litigation funders to bring its claim for a total of £2bn compensation to court.
LAN said the interest declaration by HBOS was "a deliberate attempt to hide the depth of the crisis from shareholders".
Chairman Sir Andrew Watson said: "On 18 September 2008 HBOS posted figures for LIBOR that were clearly completely false and misleading. We now know that HBOS was not able to borrow from other banks and had to be the recipient of loans of last resort from the Bank of England and the US Federal Reserve in staggering sums.
"Despite this HBOS pretended that it was able to borrow money from other banks on an unsecured basis at rates more favourable than, for instance, HSBC Bank could."
LAN claim Lloyds TSB directors "closed their eyes to this" and "hid the fact HBOS had received massive secret loans" to keep it operating.
The HBOS merger cost Lloyds shareholders up to £4 a share, according to LAN's latest calculations. With 6 billion shares in issue the total value of the claim could, therefore, be £24bn.
LAN is writing to members of the Treasury Select Committee this weekend suggesting they raise the issue of LIBOR and Lloyds at their hearing into the banking scandal.
"Bob Diamond gave the impression that 'low-balling' the interest rate hurt no-one. In actual fact it hurt 800,000 Lloyds TSB shareholders, the majority of them pensioners, who have lost their life savings," a LAN spokesman added.
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