At the height of the banking crisis in 2008, I took a phone call from one of the people closely involved in the banks’ rescue.
He pleaded with me to opine in print that Lloyds must be allowed to merge with the beleaguered HBOS and that the government must pump taxpayer money into HBOS. My source said it would trigger an economic tsunami if the institutions were allow to fail.
When I asked for evidence, he said it was common sense and promptly rang off.
That is where, by an large, the justice system has left the Global Financial Crisis, a mega event that was stunningly seen as axiomatic, rather than as a calamity for which the main actors should have been held responsible.
I was reminded of this exchange when the news surfaced — slipped out more like, on the eve of a long holiday weekend — that City watchdogs have concluded that no prosecutions will be brought against the former bosses of HBOS over its near collapse in 2008.
You may think that 14 years is a long wait. That might tell you something about the enthusiasm of the beaks, in the form of the Bank of England and Financial Conduct Authority, or FCA, to get involved.
In fact, this inquiry took six years. It was set to conclude in 2017, having been launched in 2016, but then the authorities discovered a cache of previously unexamined material.
In all, they had to go through a further two million documents before reaching a verdict of no action against those who presided over a fast-growth strategy in which the bank lent like crazy and ran up bad debts of £45 billion before being bailed out by the taxpayer to the tune of £20bn and being taken over by Lloyds.
The truth is that the 2016 investigation only began because the Bank and FCA were forced into action. They’d previously looked at HBOS’s failings and decided in 2015 that “ultimate responsibility for the failure of HBOS rests with its board”.
Despite this stark finding, they decided against bringing prosecutions.
It was only when a separate report by Andrew Green QC, also released in 2015, found that public interest decreed actions against the bank’s ex-chiefs be reconsidered that they reluctantly began their latest scrutiny.
Mr Green has described the earlier decision not to pursue the executive board directors — including chairman Lord Stevenson, former finance chief Mike Ellis and ex-chief executive Andy Hornby — as “materially flawed”.
The Bank and FCA said: “Independent decision-makers reviewed the matters under investigation and have each determined that no enforcement action should be taken against these former HBOS senior managers. These investigations have therefore been closed.”
The 2015 report had described a boardroom that lacked banking experience and a management team that drove a culture of growth at all costs. It said the bank “failed to set an appropriate strategy and also failed to challenge a flawed business model that placed inappropriate reliance on continuous growth without due regard to the risks involved”.
However, after “rigorous and forensic investigations”, after gathering more than two million documents, interviewing former bank managers, and undertaking “substantial analysis” of the bosses’ roles and responsibilities at what was then the country’s biggest mortgage lender and savings institution, the outcome is no further action.
This means that only one HBOS executive — former head of the commercial lending arm Peter Cummings — has ever been punished over what happened. Mr Cummings was barred from working in the City again and fined £500,000 in September 2012.
The logical extension of this is to suppose that Mr Cummings acted entirely alone — which, of course, is ludicrous. Certainly, he is entitled to feel more than a little angry over his apparent scapegoating.
What was the “too big to fail” argument, so eloquently explained to me above, spilt over into “too big to jail”.
No senior banker anywhere stood trial, let alone went to prison, for bringing the world’s financial services industry to its knees, for forcing governments to mount lifeboat operations that cost several billions of pounds and for causing a global recession with the loss of untold numbers of jobs, not to mention the infliction of misery on countless people, sparking mental and stress-related health issues.
HBOS was a shocking, basket-case of a bank. As well as the growth and lending policy, its Reading branch, which specialised in the rescue of small businesses, was at the centre of an enormous fraud.
Tens of smaller business customers were ruined between 2003 and 2007 when corrupt bankers conspired with so-called turnaround consultants to loot the businesses that had been placed in the bank’s “high risk” unit.
The scheme's discovery did lead to the conviction and jailing of six people. But they were not at the top and again, there is the sense of a prevailing attitude of sweeping things under the carpet rather than pursuing the bosses.
A whistleblower, Sally Masterton, was forced out in 2015 after writing a report that was critical of the bank’s handling of the Reading affair. Lloyds eventually apologised, paid her compensation and admitted she had acted with “integrity and good faith”.
In 2012, as I detail in my new book Too Big To Jail, HSBC was fined a record $1.9bn for enabling the laundering of money by the Sinaloa Mexican drugs cartel, headed by the notorious Joaquin “El Chapo” Guzman.
As much as $1.9bn was, it amounted to only five weeks of HSBC profits. Under the Deferred Prosecution Agreement, reached with the US Department of Justice, HSBC agreed to pay the sum and to undergo a six-year reform programme.
The HSBC bankers were pursuing a high-growth strategy — sound familiar? Warnings about what was unravelling in Mexico were simply ignored.
Make no mistake, the Americans wanted to prosecute, partly because they were acutely aware that no senior banker had been indicted over 2008. But the UK government, in the form of George Osborne, who was chancellor at the time, and the Treasury intervened, maintaining that indictments and possible convictions jeopardised the bank and with that the edifice of the banking system.
No evidence was offered for this assertion. The upshot, and this latest news from the Bank and FCA affirms this, is that bankers are somehow above and beyond. Fining them has minimal effect; what they understand and dread is the prospect of personal ruin, of prison.
To date, they have nothing to fear.
Chris Blackhurst is author of Too Big To Jail — Inside HSBC, the Mexican drug cartels and the greatest banking scandal of the century (Macmillan).
Company profile
Name: Thndr
Started: October 2020
Founders: Ahmad Hammouda and Seif Amr
Based: Cairo, Egypt
Sector: FinTech
Initial investment: pre-seed of $800,000
Funding stage: series A; $20 million
Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital
The biog
Marital status: Separated with two young daughters
Education: Master's degree from American Univeristy of Cairo
Favourite book: That Is How They Defeat Despair by Salwa Aladian
Favourite Motto: Their happiness is your happiness
Goal: For Nefsy to become his legacy long after he is gon
Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Killing of Qassem Suleimani
Fines for littering
In Dubai:
Dh200 for littering or spitting in the Dubai Metro
Dh500 for throwing cigarette butts or chewing gum on the floor, or littering from a vehicle.
Dh1,000 for littering on a beach, spitting in public places, throwing a cigarette butt from a vehicle
In Sharjah and other emirates
Dh500 for littering - including cigarette butts and chewing gum - in public places and beaches in Sharjah
Dh2,000 for littering in Sharjah deserts
Dh500 for littering from a vehicle in Ras Al Khaimah
Dh1,000 for littering from a car in Abu Dhabi
Dh1,000 to Dh100,000 for dumping waste in residential or public areas in Al Ain
Dh10,000 for littering at Ajman's beaches
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
Results
2.30pm: Dubai Creek Tower – Handicap (PA) Dh40,000 (Dirt) 1,200m; Winner: Marmara Xm, Gary Sanchez (jockey), Abdelkhir Adam (trainer)
3pm: Al Yasmeen – Maiden (PA) Dh40,000 (D) 1,700m; Winner: AS Hajez, Jesus Rosales, Khalifa Al Neyadi
3.30pm: Al Ferdous – Maiden (PA) Dh40,000 (D) 1,700m; Winner: Soukainah, Sebastien Martino, Jean-Claude Pecout
4pm: The Crown Prince Of Sharjah – Prestige (PA) Dh200,000 (D) 1,200m; Winner: AF Thayer, Ray Dawson, Ernst Oertel
4.30pm: Sheikh Ahmed bin Rashid Al Maktoum Cup – Handicap (TB) Dh200,000 (D) 2,000m; Winner: George Villiers, Antonio Fresu, Bhupat Seemar
5pm: Palma Spring – Handicap (PA) Dh40,000 (D) 2,000m; Winner: Es Abu Mousa, Antonio Fresu, Abubakar Daud
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Slow loris biog
From: Lonely Loris is a Sunda slow loris, one of nine species of the animal native to Indonesia, Malaysia, Thailand and Singapore
Status: Critically endangered, and listed as vulnerable on the International Union for Conservation of Nature red list due to growing demand in the global exotic pet trade. It is one of the most popular primate species found at Indonesian pet markets
Likes: Sleeping, which they do for up to 18 hours a day. When they are awake, they like to eat fruit, insects, small birds and reptiles and some types of vegetation
Dislikes: Sunlight. Being a nocturnal animal, the slow loris wakes around sunset and is active throughout the night
Superpowers: His dangerous elbows. The slow loris’s doe eyes may make it look cute, but it is also deadly. The only known venomous primate, it hisses and clasps its paws and can produce a venom from its elbow that can cause anaphylactic shock and even death in humans
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
'Fantastic Beasts: The Secrets of Dumbledore'
Rating: 3/5
Directed by: David Yates
Starring: Mads Mikkelson, Eddie Redmayne, Ezra Miller, Jude Law
