It reads like the plot of a new John Le Carre novel but a former HBOS banker and five other financiers have been jailed for their part in a £245m loans scandal.
Former HBOS banker, Lynden Scourfield, pleaded guilty to six counts of corruption. Scourfield looked after corporate customers at HBOS’ branch in Reading. In exchange for agreeing to additional lending, Scourfield’s customers were forced to use a “turnaround firm” called Quayside Corporate Services (“Quayside”) otherwise HBOS would call in its loans.
Many of these additional loans were used to pay the extortionate fees Quayside charged to these clients. Far from turning these businesses around, many of the businesses Quayside was trying to help were run into the ground or asset stripped.
Quayside used some of the fees it generated for dealing with these clients to bribe Scourfield with sex parties, luxury holidays and cash in brown paper bags for the introductions into the HBOS clients.
HBOS has written off £245m in relation to the conspiracy. The defendants have been jailed for between three and half years and 15 years for their involvement in this highly unusual case.
Whilst this does not bear any reflection on the behaviour of the vast majority of banks. It does serve as a useful reminder to ensure that your clients get their own independent advice.
Many banks will often recommend the services of large national firms of accountants / IPs to undertake business reviews for your clients at great expense. These firms will often make recommendations to your clients. It is imperative that your clients understand that these firms represent the banks / lenders and they have no obligation to help or advise your clients.