Manx Herald Isle of Man: HBOS ‘Rogue Banker’ scandal with links to EuroManx debated in Westminster

HBOS ‘Rogue Banker’ scandal with links to EuroManx debated in Westminster
================================================================================
Herald Editor on 05 June, 2009 06:06:00
 
Following hot on the heels of the broadcasting of BBC Radio 4’s ‘File on
Four’ programme, ‘Bankers Behaving Badly’, on Tuesday 26th May, a
‘Private Member’s Debate’ took place, on Tuesday 2nd June, in Westminster.
James Paice MP, member for south-east Cambridgeshire, made numerous allegations
regarding the supervision of the Reading branch of HBOS and the activities of a
manager, Lynden Scourfield saying: “Why was Lynden Scourfield allowed to keep
lending money to businesses that were already overborrowed, especially if, as we
believe, he was lending sums considerably in excess of his authorised limit?
What happened to the bank’s internal procedures?”
Further allegations were made about the involvement of a claimed ‘business
turnaround’ consultancy, Quayside Corporate Services.
Mr Paice said about their involvement: “My basic contention is that Lynden
Scourfield lent considerable sums to more than 200 businesses and that in many,
if not most, cases he required the businesses to engage Quayside as advisers or
turnaround specialists. In many cases, he also required that a Quayside
appointee be placed on the board. Then Quayside would advise significant
increases in borrowing, which Scourfield authorised and in which the business
owners acquiesced, as, after all, that was the advice of the bank’s
appointees. Subsequently, many of those businesses went down for far more than
if Quayside had not been involved, and the assets of the businesses were
acquired in one way or another by others involved with Quayside.”
The interest in this case for the Isle of Man public and taxpayers is the fate
of EuroManx and the loss of over £1m of taxpayers’ money when the airline
collapsed.
EuroManx was part of Corporate Jet Services which had the Scourfield/Quayside
treatment, going down owing £113m to HBOS.
EuroManx was disposed of via a management buyout and was in the hands of Quest
Aviation Services when it collapsed.
A director of Quest at the time of EuroManx’s collapse was also a director of
Quayside.
Mr Paice wound up his speech by stating: “I hope that this debate demonstrates
to the Minister that he should invite the regulatory authorities to investigate
the whole matter thoroughly. The public now own most of HBOS, and, although
there were many reasons for its decline, it seems clear to me that some of its
losses, probably hundreds of millions, stemmed from malpractice at the Reading
office. All of us are taxpayers, and we are justified in demanding to know how
that happened, why it was allowed to happen and whether any criminality was
involved. If we have a full inquiry that proves all my statements, allegations
and concerns groundless, I will, of course, accept the finding and withdraw
them. However, on the evidence that I have seen, I believe that an inquiry would
find otherwise.”
Ian Pearson, The Economic Secretary to the Treasury, responding to the debate,
said he was deeply concerned by the allegations he had heard.
He went on to say: “The debate has raised issues and allegations that require
full examination of the evidence, and I am happy to pass on any evidence that is
not already available to the FSA. If appropriate, I am also happy for the FSA to
refer matters to the police.”
Whether any investigation will extend to the activities, in the Isle of Man, of
some of the people mentioned in the Radio 4 programme, and the Westminster
debate, remains to be seen; but the Manx Herald is certain they warrant
investigation by at least one responsible authority.
http://www.parliamentlive.tv/Main/MeetingDetails.aspx?meetingId=4143
http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/26_05_09_fo4_hbos.pdf