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Cable calls for HBOS corporate loan investigation

Liberal Democrat Treasury spokesman Vince Cable has called on the Government to investigate BBC claims that HBOS lending irregularities led to business bankruptcies.

A BBC investigation has found businesses that took out HBOS corporate loans and were allegedly forced to deal with a management consultancy firm, which they say led to their bankruptcy.

BBC’s File on 4 has reported that HBOS bank executive, Lynden Scourfield, required business borrowers to employ consultants Quayside Corporate Services as a condition for getting a loan, a firm which the borrowers are alleging played a part in their eventual bankruptcy.

The BBC says both Quayside and HBOS deny any wrongdoing.

James Paice, MP for South East Cambridgeshire, told File on 4 that HBOS’s new owners Lloyds were not taking seriously their complaints and those of other businesses.

Mr Paice said to the BBC: “The whole thing stinks. The contention that I and my colleagues have is that the bank or some of the bank’s then officials were significantly party to allowing or indeed encouraging these businesses to get into greater difficulty than they may or may not have been in the first place.”

Mr Paice has secured a Commons debate next Tuesday.

Cable has called on the FSA to investigate evidence of “very, very serious allegations”. He said to the BBC: “If half of what I hear is true this is a very, very serious matter.”

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