James Hurley Enterprise Editor Published at 12:01AM, September 17 2015
MPs have called on the Serious Fraud Office to investigate Lloyds Banking Group and one of its property advisers over allegations that they conspired to abuse the insolvency process.
During a debate in parliament yesterday, Lloyds and Alder King, a firm of property valuers and receivers, were accused of “daylight robbery” by pushing small businesses to the wall as the bank sought to clean up its balance sheet after the financial crisis.
Last night, Lloyds and Alder King strenuously denied the allegations.
Jo Stevens, Labour MP for Cardiff Central, accused Lloyds of “colluding” with Alder King to manipulate the value of properties against which customers’ loans were secured.
It was claimed this was done to put the bank’s business customers in breach of the loan-to-value ratios on their secured debts. Ms Stevens suggested that these were “good customers allowed to borrow at low rates” who were subsequently deemed commercially unattractive in light of the banking crisis. She claimed these businesses were “targeted and eliminated” by Lloyds.
The bank and Alder King were also accused of not managing a “clear conflict of interest” in their relationship.
MPs referred to correspondence showing Julian Smith, an Alder King receiver, writing to accept an appointment to work on the foreclosure of affected borrowers’ property from Jonathan Miles, an Alder King asset recovery manager, who at the time was working on secondment within Lloyds’ restructuring department.
When Mr Smith was appointed as a receiver for this work, he was also working on a part-time secondment within Lloyds’ restructuring department.
Alder King was cleared of wrongdoing by its regulator, the Royal Institution of Chartered Surveyors.
MPs called on the SFO to provide an update on the case, which follows complaints by Lloyds customers Kashif Shabir and Alun Richards.
A Lloyds spokesman said: “These customers have made allegations about our treatment of them, all of which are completely baseless.”
Alder King said: “Alder King and all of its partners and employees strenuously deny any allegations of wrongdoing or professional misconduct, let alone criminality.” He added allegations of undervaluing property were “totally false” and “spurious”.
Robert Buckland, QC, the solicitor-general, said the allegations about Lloyds and Alder King were under “active consideration” by the SFO. He indicated the threshold required to launch a formal investigation had not yet been passed.