Co-op Bank’s directors speak out over Verde

Tim Wallace
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WARNINGS from directors at the Co-op Bank were ignored during the ill-fated attempt to buy Lloyds branches, despite them being appointed to advise disgraced former chairman Paul Flowers, MPs were told yesterday.

Flowers had no finance experience and was only appointed because of his leadership skills.

As a result the Financial Services Authority made Flowers appoint two deputy chairmen with more banking knowledge.

But Rodney Baker-Bates and David Davies said they found their worries over the plan to buy 632 Lloyds branches were ignored.

Baker-Bates had offered his resignation in autumn 2011 but was then persuaded to stay on. He quit in summer 2012 when the so-called Verde deal was approved by the rest of the board.

“I was ignored,” Baker-Bates told MPs on the Treasury Select Committee.

“I set out to convince the board Project Verde was a giant step too far, and it was overlayed on another major error, Project Unity – which was bringing bank and group leadership together.”

It was at that stage Davies said he wished to resign, but agreed to stay in post for another six months.

“Instead of ignoring their advice, alarm bells should have sounded on the main Co-op Group board,” said committee chairman Andrew Tyrie MP.

“It will be important to find out why this advice was ignored and whether or not the Co-op’s form of governance had anything to do with it.”