Sainsbury's defends new chair over Lloyds' takeover
Sainsbury's was forced to defend its incoming chairman after a shareholder raised questions over his involvement in Lloyds' disastrous takeover of HBOS.
City grandee Martin Scicluna, who chaired the audit and risk committee at Lloyds Banking Group, is set to become chairman of Sainsbury’s ahead of its £12 billion merger with rival Asda.
Mr Scicluna backed Lloyds’ 2008 takeover of HBOS, which nearly toppled the bank and led to huge losses for shareholders.
It ultimately culminated in Lloyds having to ask for £20bn of taxpayers’ money to avoid disaster.
At Sainsbury’s annual general meeting, an independent investor said the “lack of diligence” from those involved in the Lloyds-HBOS merger might have implications for Sainsbury’s investors.
“My concern at the moment is that lack of diligence in 2008 by a number of individuals - I don’t want a similar thing occurring in 2019 when we merge with Asda,” he said.
Sainsbury’s independent director Susan Rice, who led the search for a new chairman, said Mr Scicluna’s experience on large transactions was the reason for his appointment.
Ms Rice, who was previously CEO and chair of Lloyds TSB Scotland, said Mr Scicluna joined the board of Lloyds days after the terms of the deal with HBOS had been arranged.
“So he was certainly on the board during that period,” she said.
“That was a very complicated period, and the coming together of Lloyds and HBOS couldn’t be more different than the transaction that we are looking at just now.
“So I personally see absolutely no relation or overlap there.”
She said Sainsbury’s had done extensive due diligence on Mr Scicluna and that he would be a “positive force” for Sainsbury’s merger with Asda.