SHOWDOWN AT STOBART
Lavish expenses. Underhand tactics. The inside story on an ugly boardroom battle fought out in the High Court
ONE of the most vicious High Court battles ever to grip the City drew to a close yesterday.
The fight between airports operator Stobart Group and its former boss Andrew Tinkler has seen a parade of well-known figures, including investment veteran Neil Woodford and retail tycoon Philip Day, take the stand.
At the last moment, Stobart Group dramatically withdrew claims that Tinkler (pictured) had ‘improperly’ racked up £5m of expenses on private travel and lavish corporate shindigs. The company had previously been demanding repayment. It is, however, still at odds with Tinkler, who was chief executive from 2007 to 2017.
The explosive corporate lawsuit has laid bare the personalities and the clashes at the top of the FTSE250 company, bringing the usually private drama of the boardroom into the public arena.
Among a complicated set of claims, Stobart has argued that 54-year-old Tinkler breached his duties as a director. It claims he launched a conspiracy with well-known business figures – including Woodford and Edinburgh Woollen Mill boss Day – to oust its chairman and harm company interests. It wants the judge to rule he was lawfully dismissed earlier this year.
Tinkler denies wrongdoing and, in a set of counter-claims, has asked for the court to rule that his sacking was not valid. He also claims that Stobart’s chairman, Iain Ferguson, was not validly re-elected to the board and has lodged financial claims of an unknown amount against the company.
Under Tinkler’s leadership the trucking division Eddie Stobart floated for £550m in 2017 and is now a separate company, although Stobart Group retained the rights to the name and a 12.5pc stake.
The dogfight began after Tinkler stepped down as chief executive last June.
HE HANDED over the reins to former Easyjet operations chief Warwick Brady, then the deputy chief executive at Stobart, although Tinkler remained on the board.
The narratives then diverge. Tinkler said he spent the next year becoming increasingly worried with the way Brady was managing the business.
The Stobart side has argued that Tinkler was interfering and became more and more concerned about how much he’d been paid when he was leading the firm.
Its claims include that he shared confidential information with people outside Stobart and that he began plotting against the company, hatching a plan to remove Ferguson and replace him with Philip Day.
In June, Stobart Group fired Tinkler from the board for allegedly breaching his contract and duties. Tinkler then won re-election to the board at the company’s annual meeting later that month – and was promptly fired again.
Ferguson also narrowly won re-election to the board.
At the trial, Woodford denied claims he was conspiring to harm the interest of a company when his investment firm held its shares. Day said the allegations against him were completely unfounded and he was offended by them.
He explained that he was approached by Woodford, Tinkler and others to consider standing as a chairman candidate, and then said he confirmed he would do it only with the support of the majority of shareholders.
Dropping the claims about Tinkler’s expenses is a climbdown for Stobart.
A spokesman said that although it still believes the amounts were excessive and unnecessary for a company of its size, ‘based on the evidence presented in the trial it was not demonstrated that these were incurred improperly’.
He added: ‘We believe we have a strong case on all other matters, including Mr Tinkler’s disregard for his fiduciary and contractual duties to the company.’
A spokesman for Tinkler said: ‘It is astonishing that the claimant has now withdrawn one of its central claims in its entirety. We have presented a thorough, evidencebased defence and counter-claim.’
Among the allegations of improper expenses that have now been dropped, court documents show that Tinkler spent £1.6m on private jet and helicopter travel – provided by aviation companies he owns – between 2015 and 2018.
More than £1m of helicopter flights he put on his Stobart expenses were payable to Apollo Air Services, which was one of his companies.
AroUND another £594,000 was payable to other companies including WA Developments International, which he owns.
Tinkler spent another £2.9m on corporate entertainment, mostly for racing events between late 2014 and 2018, as well as two bills of £65,000 and £67,500 to companies owned by former Boyzone singer ronan Keating, a personal friend of Tinkler who has tweeted that Stobart’s treatment of the former boss has been disgraceful.
The documents also show that in February 2015, Tinkler bid at a Cancer research UK auction for a £50,000 range rover. He billed the company for the car, which was later used by his daughter, Laura.
She was also allowed to live rentfree in a flat leased by Stobart Group in Soho Square, London, one of the capital’s priciest locations. And he put in a number of claims for embroidered clothing.
As well as the £5m expenses claims that have been dropped, another £4m of alleged tax liabilities – part of the wider dispute between Stobart and Tinkler – have been struck off by the judge.
Judge Jonathan russen, who oversaw the non-jury trial, struck off the claim during the first week of the proceedings. Stobart is appealing against the decision.
The judge is expected to deliver his verdict by late January or early February, though it could be sooner. Until then, investors, analysts and the City can only hold their breath.