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Former Lloyds CEO Eric Daniels sues for unpaid bonuses

Published: 18:11 22 Aug 2017 AEST

Lloyds
Lloyds has been dealt another blow

Lloyds Banking Group PLC (LON:LLOY) is being sued by its former chief executive, Eric Daniels, and its former head of the wholesale banking division, Truett Tate, for hundreds of thousands of pounds in unpaid bonuses.

Daniels, who was chief executive between 2009 and 2010 after heading Lloyds TSB for nearly six years, and Tate filed legal claims against Lloyds with the High Court this month, The Times reported.

Daniels is said to be seeking about £500,000 in compensation, which is likely to spark outrage given that he played a central role in the group’s £20bn government bailout in 2008 during the financial crisis and the payment protection mis-selling scandal that has so far cost the bank £18bn.

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It was unclear how much Tate, who resigned from Lloyds a year after Daniels, is seeking.

Daniels was forced to surrender up to £700,000 of a £1.45mln bonus in 2012 after the bank’s payment protection insurance mis-selling scandal.

The Treasury Select Committee of the House of Commons had questioned Daniels in 2009 over the banking crisis, including issues surrounding the takeover of HBOS the same year.

In 2008 Daniels met with then Prime Minister Gordon Brown and promised to save HBOS following a collapse in its share price. 

But the acqusition of HBOS by Lloyds TSB, which created Lloyds Banking Group, crippled the bank and led to its bailout.

Investors suing Lloyds over HBOS acquisition 

READ: Lloyds under the cosh as analysts expect PPI saga to drag on

Investors are suing Lloyds on claims management withheld information about the perilous financial state of HBOS before it was taken over by the bank in 2008.

Lloyds and its former directors are due to appear in court over the rescue deal on 2 October and it is expected to last 12 weeks.

The Lloyds/HBOS Shareholder Action Group, comprising 6,000 former Lloyds TSB investors, is seeking between £300mln and £350mln in damages.

Lloyds has denied any wrongdoing, saying it does “not consider there to be any merit to these claims and we will robustly contest this legal action”.

Lloyds declines to comment

The bank returned to private hands earlier this year after the government sold its 43% following a successful turnaround under current chief executive Antonio Horta-Osorio.

Lloyds declined to comment on the report.

“As this matter is a live legal issue, it would be inappropriate to comment,” a spokesperson told The Times

A spokeswoman for Daniels also refused to comment, while the law firm representing Tate did not respond to calls or emails. 

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