Ex-HBOS Chief Crosby Lands Moneybarn Windfall
A former banker who surrendered his knighthood last year will reap a profit running into hundreds of thousands of pounds from the sale of a car finance company he chairs.
Sky News can reveal that James Crosby, who ran HBOS, Britain's biggest mortgage lender in the years leading up to the banking crisis, will cash in from the £120m takeover of Moneybarn by Provident Financial, announced on Thursday.
Mr Crosby, who was criticised by MPs and peers in a report on the collapse of HBOS, is understood to have acquired a stake of just under 1% of Moneybarn's parent, Duncton Group, when he became the company's chairman in 2011.
Insiders said that he would receive total proceeds from the sale of £850,000 and that his profit from the deal would amount to several hundred thousand pounds, and that the deal signalled the end of his last remaining corporate chairmanship.
Mr Crosby, who went on to become the deputy chairman of the Financial Services Authority, resigned from the board of the regulator in 2009 after a whistleblower, Paul Moore, alleged that he had been sacked by the bank chief after he warned about the state of its finances.
Last year's report by the Parliamentary Commission on Banking Standards also triggered Mr Crosby's departure from the board of Compass, the FTSE-100 catering group, the advisory board of Bridgepoint, the private equity firm, and as a trustee of Cancer Research UK.
As well as surrendering his knighthood, Mr Crosby also volunteered to give up a third of his £580,000-a-year pension.
"Shortly after I left HBOS, I received the enormous honour of a Knighthood in recognition of my own - and many other people's - contribution to the creation of a company which was then widely regarded as a great success," he said at the time.
"In view of what has happened subsequently to HBOS, I believe that it is right that I should now ask the appropriate authorities to take the necessary steps for its removal."
The FSA's successor body, the Financial Conduct Authority, assumed responsibility for regulating consumer credit earlier this year, although it is not thought to have exerted any pressure on Mr Crosby to relinquish his role at Moneybarn.
Mr Crosby is just one of several high-profile financiers who will profit from the company's sale, which specialises in providing car loans to customers with poor credit records.
Sources said the company's shareholders also included David Hoare, the new chairman of Ofsted, the education watchdog; James Lupton, the banker who is co-treasurer of the Conservative Party; and Peter Norris, the Virgin Group chairman.
Provident said its takeover of Moneybarn would create a valuable additional "leg of earnings".
"Moneybarn's origination has been muted recently, given funding constraints, and this leaves scope for growth going forward. The board believes that the business is highly scalable, given the strength of broker relationships and market leading credit decisioning, combined with the strength of the group's balance sheet," it said.
Mr Crosby and Provident declined to comment.