Lloyds has received a letter of complaint from Lord Sugar, who according to one source, is seeking the return of about £10 million in break fees paid to Lloyds to cancel the interest rate hedging contract returned, reports The Telegraph.
According to the title, Lord Sugar is understood to be considering legal action if his complaint is unsuccessful. The derivative is thought to have been for £97 million and taken out to protect against a rise in interest rates on a Lloyds loan.
Lord Sugar’s complaint makes him the most high-profile business owner yet to be linked to the mis-selling interest rate hedging product scandal, which saw thousands of smaller businesses across the country sold complex derivatives linked to interest rates. The products ended up costing them hundreds of thousands and even millions pounds in costs many say they were never warned about.
Lloyds, along with all of the UK’s other major lenders, including Barclays, HSBC and Royal Bank of Scotland, signed up in June 2012 to a redress scheme for victims.
Barclays has made by far the largest provision against swaps mis-selling, putting aside £1.5 billion to compensate customers, while RBS has made a provision of £750 million. Lloyds’ provision currently stands at £400 million, slightly more than the $598 million (£385 million) put aside by HSBC.
However, more than a year on from setting up the compensation process, no money has been paid out.
Lloyds and a spokesman for Sugar both declined to comment.
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