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Lloyds to hand over report into HBOS fraud probe to lawmakers

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Lloyds to hand over report into HBOS fraud probe to lawmakers

Lloyds Banking Group PLC has agreed to share the findings of an independent investigation into its handling of suspected fraud at unit HBOS PLC to the U.K. Parliament's Treasury Select Committee, The Daily Telegraph reported.

The probe, conducted by retired High Court Judge Linda Dobbs, aims to determine what Lloyds knew about the £1 billion fraud scheme after its controversial takeover of HBOS in 2009. The HBOS fraud scam, which affected hundreds of business customers, has led to the conviction of six individuals, including two former HBOS bankers.

Some critics, including the All Party Parliamentary Group on Fair Business Banking, have questioned the independence of the probe as it was commissioned by Lloyds. The investigation is expected to be completed in the second half of 2019.

Nicky Morgan, chair of the Treasury committee, welcomed the bank's decision but criticized the timescale for the report's publication, the report added.

The news comes after the publication of a 2013 report alleging that Lloyds had found evidence of the fraud at the time it acquired HBOS but failed to disclose it to shareholders. The so-called Project Lord Turnbull report, which was written by a former employee at Lloyd's high-risk division, also claimed that HBOS executives were aware of the £1 billion fraud scheme as early as 2004 but conspired to conceal it.

The U.K. Financial Conduct Authority is investigating HBOS and the extent of its executives' knowledge of the fraud, while the U.K. National Crime Agency has also launched a broader inquiry into the HBOS fraud to assess claims that fell outside of its initial criminal probe.