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Friday, 23 January 2009


Dear Readers, I apologise for radio silence here so far this year. This is because of my day in Edinburgh's Court of Session as an 'intervening petitioner' regarding the court's sanction of the convening of the general meeting of HBOS and The Schedule of arrangement for raising new capital via issuing new preference shares, share conversions, and takeover / merger of HBOS by lloyds TSB to form the new Lloyds Banking Group. In court we raised issues of cross-shareholdings pertaining to restricted voting by associated companies, potential for market abuse, malfeasance in withholding critically material information, and our disclosure (with the evidence) of £45bn in fund-raising by selling mortgage asset backed very long-dated paper achieved by HBOS (that the bank failed to publicise) over the very period during which the bank was claiming to be in a liquidity crisis and having difficulties in precisely the long end of the interbank funding markets? In Court it was also reported that HM treasury has destroyed all copies of the "Secret Dossier", a matter about which we can only speculate, but which seems highly questionable. When the only reason for the EGM and takeover was the bank's liquidity crisis, the absence of any supporting data that could be independently verified is a major questionable problem! Shareholders could only rely of the assurances of publicly discredited or 'disgraced' directors of the bank in the media and by politicians of all parties. This is furthermore a matter in which Government is not exactly 'independent'. In these turbulent times, however, there is scarcely a bank's prospectus that is not capable of being critiqued for misleading or negligent information. In this exceptionally important case, where the legal fees cost is about a quarter of a £billion (or 3 times the cost of President Obama's inaugeration ceremony) and where there is immense political and Scottish national issues, the matters we raised have a heightened sensitivity, about which our intervention was as judicious and responsible as we could manage. For the publicity (still continuing) see:

Ian Fraser

Robert McDowell

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