Noel Edmonds has demanded £73 million in compensation from Lloyds Banking Group for what he claims was the destruction of his business empire, together with public humiliation and damage to his reputation, caused by the fraudulent activities of the bank's HBOS Reading arm.
In a letter to the Lloyds chief executive, António Horta-Osório, lawyers for the TV presenter allege he “suffered immense economic loss as well as (to put it very mildly) ‘distress and inconvenience’ at the hands of your bank as a direct result of the actions” of the individuals involved in the fraud at the Berkshire branch.
Six people were jailed in February after a jury heard they spent the proceeds of their fraudulent activities on superyachts and sex parties, while destroying businesses they had lent money to.
Among them was the former HBOS banker Mark Dobson, who was sentenced to four-and-a-half years in prison and is referred to in the letter sent to Horta-Osório by Edmonds' lawyer Jonathan Coad at Keystone Law.
The letter said: “These individuals were fraudsters whose corrupt activities also resulted in losses to my client of tens of millions of pounds, along with his suffering deep distress and public humiliation.”
Lloyds has set aside £100 million to compensate 64 victims of the HBOS Reading fraud, although this sum may need to be increased if Edmonds is successful in his claim against the bank for fraudulent activities that took place between 2003 and 2007.
Former DJ and children's TV presenter Edmonds, who presented Deal or No Deal from 2005 to 2016, said: "I confirm my lawyers have sent a detailed claim letter seeking compensation from Lloyds for the losses that I suffered as a result of fraud committed against me by one of its managers."
The biggest part of the claim is £50 million to cover the losses he incurred when his business, Unique Group, collapsed. Edmonds says the bankers' actions destroyed the entertainment firm and robbed him of future growth.
He is also claiming £12 million for loss of speaking fees, £100,000 for “pain, suffering and damage” to his reputation and £750,000 in legal fees.
“I am now trusting that Mr Horta-Osório is true to his word and ensures that I am ‘fairly, swiftly and appropriately’ compensated for both the destruction of my businesses and the significant damage to my reputation. If he is not, then I will pursue my claim against Lloyds via the courts.”
Dobson worked for Lynden Scourfield, a former HBOS banker who pleaded guilty to charges relating to his role in the fraud and was jailed along with his business associate David Mills.
The court heard that Scourfield gave inappropriate loans to businesses, which allowed Mills and his associates to profit from high consultancy fees, while the banker was rewarded with foreign cruises and sex parties.
Edmonds’ move comes as Horta-Osório prepares for Lloyds’ annual general meeting on Thursday, days before the government will be able to claim that the 43 per cent shareholding bought by taxpayers to rescue the bank in 2008 has been entirely sold off.
The HBOS fraud predates the rescue by Lloyds during the financial crisis, but an investigation is under way into whether Lloyds looked into the problems in Reading and reported them to authorities when it took over HBOS.
Edmonds claims that Dobson effectively became a shadow director of one his businesses, Unique, which was involved in a wide range of activities including Proms in the Park. The former Noel's House Party host claims HBOS prevented him from selling shares in another business, UBC, which would have helped repay a loan to HBOS.
“Had the sale of shares in UBC not been blocked, then the Unique bank accounts would have been in the black to the tune of about £1 million,” Edmonds’ lawyer said.
“This figure is substantially more than the sum then claimed by HBOS, which in turn led to our client being the subject of legal proceedings based on the personal guarantee that had been demanded of him by HBOS, including the substantial ‘exit fee’ that was wrongly levied against Unique.”
The aim was to force Unique into the Quayside business run by Mills, the letter said.
Coad, representing Edmonds, said: “Noel has waited 10 years to see justice done after his business empire was brought down by Mr Dobson’s fraud, and if the Lloyds review process does not provide the recompense due to Noel, then all the necessary ordinance, including litigation funding, is in place to start legal proceedings.”
Lloyds said the £100 million compensation pot could be increased if necessary. “As stated when we announced the provision, this is what is currently anticipated as compensation for the 64 customers in the review,” it said.
“If the review determines that the level of compensation due requires us to increase the provision, then we will absolutely do so.”
Lloyds did not confirm receipt of the letter.
Edmonds is thought to be one of the 64 customers in the review.