THREE former directors of HBOS bank could be banned as company directors after moves initiated by Business Secretary Vince Cable.
Mr Cable has asked officials to investigate whether there is enough evidence against two of Yorkshire’s most-highly paid bankers, Sir James Crosby, the former chief executive, and Andy Hornby, his successor and Lord Stevenson, the former HBOS chairman, for a formal probe under the Company Directors Disqualification Act.
Mr Cable said it was the first step in a process which could lead to the three – who have so far not faced formal sanction – being barred from acting as company directors.
The move comes in the wake of a damning report into the collapse of the bank by the Parliamentary Commission on Banking Standards, set up by David Cameron last year to see what went wrong in Britain’s banking system.
It found Sir James was the “architect of the strategy that set the course for disaster’’ and held primary responsibility for the collapse of HBOS along with former chairman Lord Stevenson and fellow chief executive Andy Hornby.
Their “toxic” misjudgments led to the bank’s downfall and £20.5bn taxpayer bail-out at the height of the financial crisis and they should never be allowed to work in the financial sector again, according to the influential commission of MPs and peers.
Mr Cable said: “It’s quite a legalistic process. I can ask (officials) to look at whether the companies investigations branch take action.
“We do have this power which I have begun to initiate.”
However, Hull East Labour MP Karl Turner accused the Business Secretary of putting on “synthetic outrage”.
He said: “I think the main question is whether they are fit and proper to work in financial circles and I don’t think they are.
“The Government are in a position to do something about it; it is no good just intimating.
“Why doesn’t Vince get his finger out and do something about this outrageous behaviour?
“He is Secretary of State for Business – he is not in Opposition any more.”
Sir James, who lives in Harrogate, stepped down from his role as a member of the advisory board of private equity firm Bridgepoint Capital, the owners of Leeds Bradford Aiport, on Friday.
But he remains chairman of the car credit company Money Barn and a senior independent director for Compass, one of the country’s largest catering firms, according to company spokespeople, as well as a trustee for Cancer Research UK.
Scarborough-born Mr Hornby is now chief executive of the bookmaker Coral, which has said he has their “complete backing’’.
Only one HBOS executive, corporate division boss, Peter Cummings, has so far faced sanction, having been fined £500,000 and banned for life from working in the City last September.
In contrast Leeds-born Sir James, who was chief executive of the Halifax Building Society during the 1990s before taking charge of HBOS following the merger, walked away with a pension worth a reported £570,000 a year.
According to reports yesterday, accounting for inflation that would have risen to £700,000 a year, requiring a pension pot worth as much as £25m.
His protégée and successor as HBOS chief executive, Mr Hornby, resigned in 2009, following the takeover and became chief executive of Alliance Boots.
He received a £2.4m pay-off from that post in 2011, before joining Coral.
Sir James and Lord Stevenson have so far retained their titles, although the Royal Bank of Scotland’s disgraced former boss, Fred Goodwin, was stripped of his knighthood.
Sir James last year admitted to a committee of MPs he cashed in about two thirds of his shares in the bank before it was forced into a rescue takeover by Lloyds in 2009.
He also told MPs he has not handed back any money, nor offered to waive part of his pension as former RBS boss Fred Goodwin did, because he “lost money” in the bank’s collapse.
Friday’s report made clear that HBOS was set on the path to disaster by the “aggressive” and “reckless” approach to landing that it adopted under Sir James’s leadership and which continued when Mr Hornby took over.
It stated: “The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank’s board from its birth to its death.”
Andrew Allison, of the TaxPayers’ Alliance, said: “The (committee’s) report highlights a catalogue of failures of those responsible for the collapse of HBOS.
“Policy mistakes and inept regulation bear a large responsibility for this crisis.
“These mistakes have cost taxpayers a fortune and to say they were a great deal for taxpayers is rubbish.”