Anthony Hilton: The two issues Lloyds must come clean on before share sale

News from the Conservative party conference that the final tranche of Government-owned Lloyds Bank shares will be sold to the public next year has won general support, as would be expected, but it does raise a couple of issues.

Earlier sales direct to investing institutions require no documentation as they are transactions between sophisticated investors. In contrast, a retail offer requires the publication of a prospectus, which fully explains the risks as well as the attractions of the business.

It will be interesting to see what this says about the regulatory investigation into the near-collapse of HBOS, which got into such difficulties it had to be taken over by Lloyds.

This inquiry was started years ago by the then regulator the Financial Services Authority.

It was apparently completed years ago too but it has never been published. In the interests of full disclosure, it ought to be in the public domain before the shares are sold.

The second legal issue is closer to home. The law firm Harcus Sinclair is bringing a case that is in effect a claim for compensation for losses incurred by the HBOS takeover on behalf of several thousand Lloyds’ shareholders.

The defendants are Lloyds Banking Group and several of its directors at the time, notably Sir Victor Blank, Eric Daniels, Timothy Tookey, Helen Weir, and George Tate.