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City grandee says HBOS crisis 'worst moment' of his career

City grandee says HBOS crisis 'worst moment' of his career

‘I felt this could be a tremendous opportunity to create value for shareholders,’ said Jan du Plessis, concerning Lloyds’ 2008 bid for HBOS which is now the subject of a law suit.

Du Plessis, now chairman of BT, served as audit committee chairman at Lloyds during the financial crisis.

According to the Times, he said that attending the audit committees of the two organisations as losses spiralled was ‘one of the worst moments’ of his professional life.

He made the statement during an appearance at court on behalf of Lloyds, though he is not accused of anything.  

He gave evidence during the case brought against Lloyds by shareholders seeking £550 million in compensation who are alleging that they were misled over the ‘disastrous’ purchase of HBOS back in 2008.

The class action of around 6,000 shareholders alleges that five former Lloyds directors, including ex-CEO Eric Daniels, failed in their due diligence duties by advocating the deal.

Former chairman Victor Blank, ex-finance director Tim Tookey, Helen Weir, who was head of retail and ex-wholesale banking boss Truett Tate are the other defendants. They all deny any wrongdoing, as does Lloyds as a company.

Du Plessis defended the bank’s decision to offer a premium to buy HBOS in his statement. He added that neither Lloyds’ management team nor the market appreciated the seriousness of problems in mid-October 2008 when the government told banks they would need to raise billions of pounds in new capital to ‘bullet-proof’ themselves.

He said that the government told Lloyds that if it decided to remain independent and backed out from the HBOS deal, it would have to raise £7 billion, which an adviser told the bank that was not possible.

'I felt this could be a tremendous opportunity to create value for shareholders' in a deal that was 'low-risk, considering the potential opportunity,' he said. 

'I recall feeling that the risks were manageable after hearing the executive team’s reports during the course of that meeting [on September 17, the day before the deal was announced].'

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