Lloyds sets up review for fraud victims under Prof Russel Griggs

The Scottish businessman will look at compensation claims stemming from the £245m fraud committed by Lynden Scourfield and other financiers

David Mills, centre, and his colleague Michael Bancroft, left, Lynden Scourfield, right (Thames Valley Police)

When you buy a business, you buy its problems, and the responsibility to sort them out.

Lloyds, the owner of HBOS, therefore needs to fix things for any business that lost out through the fraudulent actions of crooked banker Lynden Scourfield and his pals.

Scourfield was one of six financiers who were sent to prison for their parts in a scheme that drained the bank and small businesses of £245m, leaving some of the latter in serious difficulties while they lived the high life on the money.

Victims claim they have spent years trying to get HBOS and Lloyds to take their claims seriously.

Lloyds denies this and has now appointed Professor Russel Griggs to conduct a review into the cases of those who may have lost out.

Prof Griggs seems to be the go to guy when it comes to independent reviews of banking. Last year the Scottish businessman looked at the way bank branch closures were handled for the British Bankers Association that will see a new standard adopted.

Another of his reviews considered lending to small and medium sized enterprises (SMEs) and led to the adoption of another standard. He also in 2011 looked at the appeals process for SMEs denied credit.

As a former head of the CBI's small business panel, he clearly knows the territory on both sides of the issue. Too well? You could look at it that way.

Let's hope it serves to achieve as rapid a result as possible for those who have spent too long waiting for this issue to be resolved.

Anthony Stansfield, Police & Crime Commission for Thames Valley, had some pointed things to say about the case, which cost the police force he oversees a huge amount of money and manpower to bring to book, in a statement issued after its conclusion.

One of the issues he raised was this: “That a fraud of this size could have taken place either displays complicity or incompetence, a lack of corporate governance, complacency, and an absence of proper safeguards (on the part of the bank).”

Quite. Of course that was before Lloyds entered the picture. But it explains why the owner of HBOS now has a responsibility to address victims' criticisms and to ensure they are compensated.

Lloyds is once again making pots of money. The state’s stake in the institution is down to 3 per cent. But it is important, as it looks forward to a life free from the addition of “state backed” whenever people write about it, that things like this don’t get swept under the carpet.

If the conclusion to be drawn from Prof Griggs appointment is that the bank realises this, so much the better.