Paul Moore, the whistleblower whose evidence was key to last week's parliamentary commission on banking, has accused his former HBOS boss Sir James Crosby of "trying to rewrite history" about Moore's sacking from the Edinburgh-based bank.
In an interview with the Sunday Herald, Moore said Crosby's evidence to the commission was "a total misrepresentation" and urged the questioning under oath of participants in the catastrophic £40 billion failure of the bank.
He said: "My job [at HBOS] was a role required by the regulator – [known as] 'control function 10', and a 'control function 11'. These are required functions within a bank, so it would have been impossible for my job to have been 'made redundant'. I did not leave of my own accord, and the way Crosby presented it to the commission was a total misrepresentation."
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Moore's comments are the latest episode of a long-running dispute, which also saw he and Crosby repeatedly contradict one another's evidence to a Treasury Select Committee in 2009.
Moore, former group head of regulatory risk at HBOS, maintains that Crosby personally fired him in November 2004 after he presented research to the bank's audit committee and board concluding that HBOS's "fundamentally flawed" business model meant the bank was heading for disaster.
In a gruelling and tense session of the Parliamentary Commission on Banking Standards last Monday, Crosby denied having fired Moore. Instead, he claimed that the experienced risk-analyst's role had "become redundant" following a routine restructuring.
Crosby also told the commission – whose members include former chancellor Lord Lawson, former head of the civil service Lord Turnbull and future Archbishop of Canterbury Justin Welby – that a report commissioned by HBOS into Moore's departure from accountancy firm KPMG was "completely independent". Crosby told the commission: "There was no way that we in any way removed Paul because he was a source of challenge."
Former HBOS chairman Lord Stevenson – branded "either dishonest or delusional" by Lawson the next day – made similar claims about Moore and the April 2005 KPMG report during a lengthy session on Tuesday.
Crosby stepped down as HBOS chief executive in July 2006, and was forced out as deputy chairman of the FSA following Moore's evidence to the Treasury Select Committee in February 2009.
Moore claims to have warned HBOS's directors during a board meeting in July 2004 that their focus on sales, combined with inadequate or perfunctory internal controls, was putting the bank at risk of collapse. In his report to the board he said HBOS was "going too fast" and had become "a serious risk to financial stability and consumer protection". Moore claims the bank's then finance director, Mike Ellis, ensured the warnings were not recorded in the board minutes.
Moore told the Sunday Herald: "It is absolutely untrue that I left voluntarily as part of some kind of internal reorganisation. I raised protective disclosures – blew the whistle – in the boardroom. The disclosures related to actual or potential breaches of law or regulation. The first was that the group's focus on sales and marketing was markedly out of balance with its systems and controls and the second was that the board should reconsider its strategy for sales growth if it wished to avoid risk to customers and colleagues.
"These words were clearly expressed in the boardroom but they were not permitted to be minuted, there is corroborating evidence to prove that. Crosby then fired me, and he sent me a memo dated November 23, 2004, and it said, 'The decision is mine and mine alone'.
"The bank [then] appointed KPMG, a firm that could not have been 'independent' because they were the bank's auditors, and they failed to conduct the investigation in an independent fashion. They failed to interview key witnesses, they failed to corroborate clear evidence and they reached conclusions which were incapable of withstanding proper scrutiny."
Moore also believes that Crosby's failure to challenge any of the initial allegations Moore made to the select committee in February 2009 is significant. "If he disagreed with [my] allegations, he should have commented straight away, not waited three-and-half-years.
"I don't think it is a forum that is appropriate to a forensic inquiry and people are not giving evidence under oath."
Moore has advocated an independent judicial inquiry into the reasons for the failures of banks including HBOS.
Last week's session contained the first apology by Crosby for his role in the bank's collapse, telling the hearing that he was "horrified and deeply upset" and "very sorry" for its near collapse.
"I am apologising for the fact that I played a major part in building a business that subsequently failed."
KPMG declined to comment. Crosby did not respond to requests for comment.