Currencies

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Currencies

Nomura rounds up markets’ biggest misses in 2016

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Property

Spanish construction rebuilds after market collapse

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Currencies

Euro suffers worst month against the pound since financial crisis

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Banks

RBS falls 2% after failing BoE stress test

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Categorized | Banks, Financial

HBOS losses in alleged scheme reached £266m


Posted on September 30, 2016

From left to Right Michael Bancroft, David Mills and Lynden Scourfield in Barbados

(Left to right) Michael Bancroft, David Mills and Lynden Scourfield in Barbados more than a decade ago

HBOS had to write off nearly £266m of loans sanctioned by a senior bank manager who was showered with expensive gifts, cash, luxurious foreign travel and sexual encounters with escorts, a London trial has heard.

Lynden Scourfield, the lead director of HBOS’s impaired assets division, formed a “corrupt relationship” with business consultant David Mills between 2003 and 2007 in return for “huge rewards” it has been alleged in a trial at Southwark Crown Court.

    Mr Mills used his firm QCS to take over struggling businesses in HBOS’s impaired assets division. Such companies were then lent more money by HBOS and charged “huge fees” by QCS, the jury has heard.

    Tom Angus, a senior HBOS manager who started to investigate Mr Scourfield’s activities in 2006, told the trial on Friday that the bank had to write off close to £266m as a result of the losses incurred and its total risk exposure to the loans was £375m. HBOS was rescued by Lloyds Banking Group in 2008.

    The trial has heard that Mr Mills provided Mr Scourfield with gifts, travel and his own American Express card for personal spending. He also paid for Mr Scourfield and his wife to fly business class to Barbados where they stayed in a villa for a week to celebrate the 40th birthday of Mr Mills’ wife Alison.

    Mr Mills, 59, denies six counts including four of fraudulent trading. His wife Alison, 51, denies two counts of fraudulent trading and money laundering. Mr Scourfield is not on trial.

    Mr Angus testified to the trial that he had “never heard” of a bank employee being given their own credit card by a bank customer. This would be “completely inappropriate” as it would make them “hopelessly compromised”, he said.

    “Have you ever known of a corporate customer inviting a senior bank employee and his wife to join him and his wife in Barbados to celebrate a birthday — all expenses paid?” prosecutor Brian O’Neill put to Mr Angus.

    “I have never heard of anything like that.” Mr Angus replied.

    Co-defendants Mark Dobson, 55, an ex-senior banker at HBOS denies two counts including conspiracy to corrupt and money laundering. QCS consultant Michael Bancroft, 73, denies five counts including three of fraudulent trading.

    Jonathan Cohen, 56, an accountant at Brett Adams based in Pinner, Middlesex, denies two counts and John Anthony Cartwright, 71, — known as Tony — who lives in Hyde, Cheshire denies three charges.

    The case continues.