Lloyds investors ponder law suit over HBOS deal

A GROUP of small investors is preparing a legal campaign against the directors of Lloyds TSB over their takeover of HBOS, as the bank&rsquo;s board faces up to a showdown at this Friday&rsquo;s AGM.<br /><br />The UK Shareholders&rsquo; Association (UKSA) is sounding out more than a million small investors in Lloyds about a possible legal action against directors who were involved in the widely-criticised deal.<br /><br />Lloyds chairman and architect of the HBOS deal Sir Victor Blank has already paid the price for his involvement, announcing his impending retirement earlier this month. But both Blank and his fellow directors will face a barrage of criticism at the bank&rsquo;s AGM in Glasgow on Friday.<br /><br />UKSA has advised investors not to endorse Blank and to vote against all directors involved in the HBOS transaction, including the bank&rsquo;s new senior independent director Lord Leitch, tipped to succeed Blank as chairman.<br /><br />Proxy voting agency RiskMetrics has also advised shareholders to vote against Blank&rsquo;s re-election, despite the fact that he has promised to retire before the 2010 AGM.<br /><br />The Association of British Insurers has signalled its concerns with an &ldquo;amber top&rdquo; alert on the pay deal of chief executive Eric Daniels, who is also expected to face calls to quit.