A former senior member of the accountancy giant PwC has denied supplying confidential details which wiped millions off the sale price of a law firm acquisition.
Watchstone plc, formerly known as Quindell, alleges in a High Court claim that a 'secret meeting' took place between the PwC representative and a member of the advisory firm Greenhill, which was working with Slater and Gordon on the talks over acquiring Quindell’s professional services division.
Watchstone alleges that the confidential information disclosed at this meeting was ‘exploited’ by Slater and Gordon in negotiations which caused the price to come down from £700m to £637m. PwC denies all claims of a conspiracy. The 2015 deal was completed by the former Australian parent company of Slater and Gordon, which has since changed ownership.
The court heard on Tuesday from the PwC representative at this meeting, former partner and head of business recovery services Ian Green, who is now retired.
He admitted meeting Greenhill’s Gareth Davies for a ‘quiet coffee’ in January 2015, four months before the deal completed. Green described Davies as a ‘larger than life character’ and said they had known each since 2010, maintaining what Green called a ‘professional relationship’ through the occasional meet-up.
The court heard that in 2014 PwC was engaged by Quindell and its lenders to assist with a number of different workstreams in relation to the claims company’s distressed financial position. This became known as Project Goldfish.
Green was not initially part of Project Goldfish but became involved on a temporary basis when the lead relationship partner went on holiday in December 2014. He was party to confidential information about the financial state of Quindell during this time and chaired meetings to discuss the best approach to take.
Green accepted he first became aware that Greenhill was involved in the talks over the acquisition on 7 January 2015, which was eight days before his meeting with Davies.
On 12 January, Davies emailed Green’s secretary asking to set up a meeting. Green did not remember reading this email but said he would not have regarded it with any significance. He assumed the meeting was a ‘regular catch-up’ and nothing to do with the Quindell sale.
In its particulars of claim, Watchstone noted an email exchange involving Davies two weeks before his meeting with Green in which he suggested ‘we could also access the PwC guys directly at some point’. Following the meeting, Davies had emailed colleagues to say Quindell was ‘running out of cash mid-15’ and that its portfolio of hearing loss claims was a ‘hugh [sic] uncertainty/opportunity/risk’.
Green, who made no note of his meeting with Davies, said that the emails sent between Greenhill colleagues afterwards were not an accurate record of what was discussed. He denied passing on any confidential information in the 15 January meeting or at any other time.
In his witness statement, Green accepted that the issue of the Quindell sale came up at the coffee meeting, but he added: ‘At the time, I did not think this was a consequential meeting – all I had done was let Mr Davies talk, without confirming anything or challenging him on any of the points he raised.’
On cross-examination, Green was repeatedly asked about what he understood to be confidential information and whether it would be suitable to disclose any such information. Green said that would indeed be inappropriate, but he denied this is what happened.
Tim Lord KC, for Watchstone, suggested Green ‘babysitted’ Project Goldfish and knew details of Quindell’s financial predicament. Lord added: ‘The question of Quindell’s financial position and projected position would have been absolutely dynamite intelligence about that company.’ Green replied: ‘That is one way to describe it, yes.’
The hearing continues.
