Former HBOS Plc executives could be prosecuted for allegedly concealing a £1 billion fraud at the bank's Reading office, The Sunday Times reported April 3.

Steve Baker, a member of the Treasury select committee, called for an investigation by the Financial Conduct Authority, after an internal report conducted by a senior Lloyds Banking Group Plc employee revealed that the 2008 fraud appeared to have been covered up.

He said the matter is potentially very serious and there could be criminal charges, according to the newspaper. Lloyds is the parent company of HBOS.

The scandal saw small businesses referred to a business turnaround firm that extracted huge fees and abused its relationship with the bank to strip firms of their assets.

Internal emails seen by The Sunday Times indicate that senior executives had discussed the matter and the need to keep it hushed up.