Woodford shock as he is dragged into Stobart court row
NeIL Woodford was dragged into a boardroom battle yesterday in yet another setback for the fund manager.
The 58-year-old told the high Court he was shocked by what he described as ‘totally false’ allegations he was part of a conspiracy to harm Southend Airport-owner Stobart Group.
Woodford was called as a witness for Andrew Tinkler, the former chief executive of Stobart who is being sued by the company.
The infrastructure group claims Tinkler breached his duties as a director and conspired to oust chairman Iain Ferguson at Stobart’s AGM this summer.
With the support of Woodford, a leading shareholder in Stobart, Tinkler wanted to replace Ferguson with edinburgh Woollen Mill boss Philip Day.
Woodford (pictured) said he had backed Tinkler because he was central to the company’s success.
‘I was aware that [Ferguson] had become obviously the chairman of this company, but I don’t believe he had any part to play in the creation of value in this business.
‘And, therefore, when it became increasingly clear that there was a decision to be made between two individuals, it was very clear to me what decision I needed to make in order to protect the interests of the people that I represented: my investors.’
he said it was ‘becoming increasingly clear’ to him that it was not going to be possible for Tinkler and Ferguson ‘to coexist on this board’. he added: ‘Andrew Tinkler had been the entrepreneurial genius, if you like, and the driving influence, if you like, of the company.’
Woodford told the court he only met Day for the first time in April this year.
Tinkler and Stobart’s former Cenkos broker, Paul hodges, introduced Day and Woodford in person to discuss a potential deal for the then-ailing house Of Fraser.
Woodford said: ‘Philip Day talked to me about why it would be an attractive proposition and why he was interested in it.
‘But there was no deal on the table, if you like, with respect to house Of Fraser, and indeed I think Philip specifically said to me, “I don’t need your capital, I just wanted to talk to you about what an interesting deal – or what an interesting position – this would be.” ’
Woodford told the judge: ‘I am shocked to see that Stobart has chosen to make allegations that I was a party to a conspiracy to use unlawful means to injure the company. Those allegations are untrue and there is no evidential basis for them.’
he said he had managed funds invested in Stobart for more than a decade, adding: ‘Why I would want to injure Stobart, in which I have chosen to invest my investors’ funds, is never explained, as is the allegation that I conspired with Andrew Tinkler to pursue his interests over those of Stobart. I owe duties to the funds I manage, and it is in the best interests of these funds for Stobart to be as successful as possible.’
Woodford’s time in the witness box is just the latest in a string of bad PR for the former Invesco whizz who set up his own firm in June 2014.
But his flagship fund has halved in size in the past 18 months – from a peak of £10.2bn in summer 2017 to £5.1bn in October, according to data from Morningstar. he has reportedly sold £1.4bn of shares in the past six months. The fund has been burned from bad investment calls such as Provident Financial, Astrazeneca and Capita.
Woodford was giving evidence at the beginning of the second week of what is expected to be a two-week trial. As well as the conspiracy allegation, Stobart claims Tinkler breached his duties as a director.
Tinkler – the only defendant – is asking the court to dismiss Stobart’s claims and rule he was unfairly dismissed, and that Ferguson was not validly re-elected to the board. The trial continues.