The High Court is set to consider whether Lloyds Banking Group should be held responsible for alleged "failings" in its dealings with Arena TV, according to a report in The Times.
Outside broadcasting company Arena Television collapsed in 2021 amid an alleged £1.2 billion scam said to be the country’s "largest ever" asset lending-based fraud. Lloyds Banking Group members Lloyds and Bank of Scotland have been accused of breaching duties of care and bank mandates when payments related to Arena TV were processed.
The banks have attempted to have the claim, launched by Arena’s liquidators, dismissed, but the court ruled that key parts of the £280 million claim should proceed to trial. The outcome may help to determine the extent to which duties of care are owed to banks’ customers when they are defrauded.
Arena’s owner, Richard Yeowart, has been accused by the liquidators of misappropriating funds of more than £1.2 billion. It is alleged that Yeowart secured lending on broadcast equipment with forged serial numbers, effectively using the same items as collateral for multiple loans.
In a judgment dealing with the dismissal applications, liquidators found that only 66 of the purported 8,196 equipment items actually existed. The liquidators have stated that the banks should have acted with greater diligence in their examination of the company’s transactions.
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Lloyds Banking Group said it continues to robustly defend the claim, which it stated seeks to wrongly hold the group liable for the consequences of a complex alleged fraud against more than 50 lenders.
An investigation into Arena TV was launched by the Serious Fraud Office in 2022. Crypto assets belonging to Yeowart were frozen earlier this year and three arrests have been made in relation to the affair. Yeowart, whose whereabouts are unknown, is being sought by authorities in France.
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