Lloyds TSB was yesterday obliged to make an embarrassing apology after miscalculating the share entitlements of 1,662 dairy farmers in last week's flotation of Dairy Crest, the UK's third biggest milk processor.
The mistake, which the bank said had cost it ''a substantial sum'', was discovered after one farmer telephoned to check his allocation. An audit by Lloyds Bank Registrars last Wednesday, the day of the flotation, then revealed the extent of the error.
About 29,000 farmers were allocated shares in Dairy Crest, the former processing arm of the now defunct Milk Marketing Board, which had been owned on their behalf by the residuary milk marketing board until last week's float. The bank had allocated too few shares to 1,662 farmers, giving them cash instead. They had all requested more shares than their basic allocation and should have got 86 per cent of the quantity requested; they received only 71 per cent. Lloyds had to buy nearly 400,000 extra shares in the market as the price shot up from the 155p offer figure. It reached 196 1 /2p on the first day of trading and yesterday closed at 190 1 /2p.
Richard Vause, a director of Lloyds Bank Registrars, said the number of shares involved was just 0.36 per cent of the total of 110m. ''However, that doesn't alter the fact that we made a mistake and this simply should not have happened,'' he said.
We are working very hard to put this right, and can only apologise profusely for the inconvenience we have caused to the dairy producers.'' Lloyds has written to the 1,662 farmers offering shares at 155p in exchange for the cash they were given. It said they should not feel penalised financially by the error, as the shares had risen.
