LORD Mandelson was yesterday condemned for attempting to "bully" the businessmen behind the legal challenge to the Lloyds TSB/HBOS merger into dropping their case.
Lawyers acting for the Business and Enterprise Secretary have threatened to sue those leading the legal bid to thwart the takeover, which they claim would put 40,000 jobs at risk and ruin Edinburgh's reputation as a financial centre.
MSPs ac
cused Mandelson of intimidating and threatening the six businessmen, who have united to form the Merger Action Group (MAG), and urged the anti-takeover campaigners not to bow to "undemocratic bully-boy tactics".
Yesterday, it emerged that Ian Forrester QC, the lawyer acting for MAG, had received a letter from lawyers acting for Mandelson's department on Friday afternoon. The letter indicated that Mandelson would not pursue legal costs if MAG withdrew its challenge by 5pm that day. It also warned that if MAG's appeal to the Competition Appeal Tribunal (CAT) went ahead, Mandelson's lawyers would pursue each of the six businessmen for the money.
It is understood the Government's legal bill has reached around £42,000 since MAG launched its bid last weekend to stop the merger. This would rise dramatically in the event of an appeal against CAT's judgment.
A cross-party group of MSPs made up of Lib Dem leader Tavish Scott, senior SNP backbencher Alex Neil and independent MSP Margo MacDonald has backed MAG and yesterday described the lawyer's letter as an "extraordinary ultimatum".
MAG has vowed to continue with its action, which will open tomorrow in London when the group's legal team urges CAT to overturn Mandelson's decision not to refer the merger to the Competition Commission.
MacDonald said: "I find it breathtaking that a group of responsible people whose only motive in taking this legal action is what best serves the public interest can be subjected to such threats and intimidation by a member of the UK Government.
"But the question has to be asked: 'Why is Lord Mandelson's legal team behaving in this way and employing these outrageous bullying tactics? Is it, perhaps, because they think they are going to lose?"
Neil has tabled a motion in the Scottish Parliament calling on Mandelson to refer the proposed merger to the Competition Commission as was recommended by the Office of Fair Trading at the outset.
Neil said: "Prime Minister Gordon Brown, should call off the attack dogs because these kind of tactics offend our ideas of decency and fair play."
The six people referred to in the Government's letter are the MAG official spokesman Malcolm Fraser, Dan Macdonald, the chief executive of Macdonald Estates, Peter de Vink, the Edinburgh financier, Mark Shaw, the chief executive of the Hazledene property group, Tim Noble, the former chairman of Noble Merchant Bank, and David Alexander, the chief executive of DJ Alexander, one of Scotland's largest independent residential letting firms.
Fraser said: "I can confirm that our lawyers did receive a letter from Lord Mandelson's legal team on Friday inviting us to withdraw our appeal. The invitation was declined. We are committed to our case and, in the public interest, we are determined that it should go ahead. Given that the appeal is going to be heard by the Competition Appeal Tribunal this week. We don't feel it is appropriate to comment any further on this matter."
An aide to Alex Salmond said: "The Scottish Government regards the actions of the Secretary of State for Business, Enterprise and Regulatory Reform as not a strong move but a weak one, and indicates real concern in the UK Government that there is a substantial case to answer about the behaviour of Lord Mandelson towards his responsibilities and the clear lack of the promised level playing field."
