Lloyds Share News (LLOY)

UK Chancellor George Osborne has been asked by the parliamentary treasury committee if he or other ministers put pressure on the Co-operative Group or Lloyds Banking Group over the sale of 632 Lloyds branches.The Co-op was in talks with Lloyds to buy its branches but the deal was scrapped last year following the discovery of a £1.5bn capital shortfall at the Co-op's banking division.Former Co-op Bank Chairman Paul Flowers subsequently left the company in June and was asked to repay some cash to the mutual.In November he was arrested on drugs claims and was accused of hiring male prostitutes. Speaking for the first time publicly, he told the BBC this week that he had "sinned".He also revealed that during his time as Chairman of the troubled Co-op Bank, he had come under "considerable pressure" from ministers to buy Lloyds' branches. The sale of the Lloyds branches was required by the European Union as a condition of Lloyds's taxpayer-funded bailout.Britain's parliamentary treasury committee, is now looking into the claims."A variety of views have been presented in evidence to the committee regarding the alleged extent of political involvement in this divestment process," Chair of the committee, Andrew Tyrie, wrote to Osborne in a letter dated March 26th and made public on Thursday."Did Treasury Ministers or any Treasury officials at any time bring undue pressure to bear on the Co-operative Bank or Group, or Lloyds Banking Group, in respect of the sale of the Verde branches?"Tyrie said the committee will investigate the issue when it questions Osborne on the Budget on April 3rd.RD