Vince Cable 'examines ban for former HBOS directors'
- 7 April 2013
- From the section Business
The business secretary has launched moves which could lead to three former directors of HBOS being banned from serving as company directors.
Vince Cable wants to see if there is enough evidence to start disqualification proceedings against Andy Hornby, Lord Stevenson and Sir James Crosby, a source told the BBC.
A report on Friday blamed them for failures in the bank's 2008 collapse.
Mr Cable "feels outraged" by the situation, the source said.
He has told officials at the investigations and enforcement branch of the government's Insolvency Service to see if there is sufficient evidence to start disqualification proceedings against the three, the Business Department confirmed.
'Architect' of the downfall
HBOS collapsed in 2008, wiping out shareholders' assets and costing thousands of jobs.
The bank was then forced to merge with Lloyds in early 2009 and received a £20.5bn taxpayer bailout. It was one of the most high-profile casualties of the UK's banking crisis, which precipitated a wider economic downturn.
In its report on Friday, the Banking Standards Commission expressed frustration that City regulators had "taken no steps" to consider banning the three men from further involvement in financial services.
None of the men has been formally punished for their roles leading up to HBOS's failure, despite what the commission described as a "colossal failure of management" and a strategy dating back to 2001 that "sowed the seeds of disaster".
A Department for Business, Innovation and Skills spokesman said: "The business secretary has instructed officials at the Insolvency Service to look into the Financial Conduct Authority report when it is published to see whether there are matters that could lead to further action."
Sir James has a pension pot worth £25m, entitling him to an annual income of £700,000, The Sunday Times reported. He also made millions by selling some of his shares in the bank in 2006, well before the bank's collapse, the newspaper said.
Labour MP John Mann - who sits on the House of Commons' Treasury Committee - has called for Sir James, described as the "architect" of HBOS's downfall, to be stripped of his title.
Following the report, Sir James, who served as chief executive at HBOS between 2001 and 2006, resigned from an advisory position he held at London-based private equity firm Bridgepoint.
But he retains other positions, including the post of non-executive director at Compass Group, a food services company.
Calls to strip Sir James of his knighthood echo what happened to Fred Goodwin, the former chief executive of Royal Bank of Scotland, who lost his knighthood in 2012 after being held responsible for the biggest annual loss in UK corporate history.
Mr Goodwin eventually agreed to a cut in his pension following an outcry over what happened to RBS - to £350,000 a year.
Lord Stevenson, who presided as chairman of HBOS throughout its eight-year existence, is currently a non-executive director at the bookseller Waterstone's.
Mr Hornby, who took over the running of HBOS in 2006, has been the chief executive of gambling company Coral since 2011.
The Banking Standards Commission was set up to improve the UK's banking system following the 2008 financial crisis.