Lloyds Banking Group PLC (LON:LLOY) has reopened a case into its treatment of a former employee who produced a damning report on the bank’s handling of fraud at the HBOS unit in Reading.
The Financial Times said Lloyds chairman, Norman Blackwell, had decided the bank needed to look further into the matter as Lloyds comes under pressure to explain its treatment of the whistleblower, Sally Masterton.
Masterton, a former employee in the bank's high-risk division, authored the so-called “Project Lord Turnbull” report that alleged certain executives at HBOS had covered up the fraud that destroyed scores of small business customers.
The report was written in 2013 and released last month by Kevin Hollinrake an MP who co-chairs the All Party Parliamentary Group on Fair Business Banking. Masterton left Lloyds in 2014 and the reason for departure was unexplained.
Lloyds non-executive, Alan Dickinson, a former executive at Royal Bank of Scotland Group PLC (LON:RBS), is understood to be tasked with reviewing whether Masterton was fairly treated.
Lloyds confirms talks with whistleblower
According to the FT, the bank confirmed that it was in “private dialogue with the author of the Turnbull report who we believe has acted with the best of intentions”.
Lloyds has previously said it had not commissioned the report and contained unsubstantiated claims. The report said Lloyds had received, and failed to act on, evidence of the fraud, theft and money laundering.
Lloyds has set aside £100mln to compensate 64 victims of the loans scam. One of the victims is ‘Deal or No Deal’ TV star Noel Edmonds, who is seeking £64mln in damages on claims his entertainment business, Unique Group, failed a result of the scandal.
READ: Lloyds may need to pay more than £1bn for HBOS Reading fraud, says Noel Edmonds
Six people, including two former bankers at HBOS, were jailed last year for a total of 47 years for their role in the fraud after being accused of destroying several businesses and squandering the profits on high-end prostitutes and luxury holidays.