Tribunal analyses Lloyds TSB merger decision

The decision to allow the proposed merger of HBOS and Lloyds TSB was not influenced by statements made by the British Prime Minister and Chancellor of the Exchequer apparently in favour of the plan, a tribunal heard today.

The decision to allow the proposed merger of HBOS and Lloyds TSB was not influenced by statements made by the British Prime Minister and Chancellor of the Exchequer apparently in favour of the plan, a tribunal heard today.

Business Secretary Peter Mandelson was solely responsible for the decision and was not swayed by his colleagues’ views, the Competition Appeal Tribunal was told.

A legal challenge against the decision to waive competition law was heard by a panel of three legal and economic experts.

The challenge, heard under Scottish law, has been brought by the Merger Action Group (MAG), a group of businessmen, bank customers and shareholders opposed to the proposed deal.

They want the decision referred back to Mandelson, who they say should then refer it to the Competition Commission.

Paul Lasok QC, representing the British government, said allegations that Lord Mandelson had been influenced in his decision by statements from senior government figures in which they appeared to favour the deal were wrong.

The hearing was told of a radio interview, given before Mandelson’s decision was made, featuring Chancellor of the Exchequer Alistair Darling, which MAG’s representatives said showed high level support for the deal.

Mr Lasok said: “We are not in the field of collective cabinet responsibility.”

He explained that Mandelson followed strict government procedure and examined all the evidence in the case before making a decision.

He added: “The decision-maker will faithfully go through the process that he is required to go through to reach its conclusion.”

That view was echoed by Nicholas Green QC, representing HBOS, who said the decision was taken by the Secretary of State alone.

He said: “There is nothing to suggest the Secretary of State was affected by what might have been an over-enthusiastic statement by the Chancellor of the Exchequer.”

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