Stobart has triumphed in a bitter boardroom battle turned courtroom brawl against sacked chief executive Andrew Tinkler, and involving star manager Neil Woodford, with the High Court ruling the former boss’s dismissal was “lawful and valid”.
Posting the key findings of the judgement in an RNS update on Friday, the infrastructure firm said the High Court found it had lawfully dismissed Tinkler as CEO and a director at the company for breaching his fiduciary and contractual duties by criticising the board and business to key shareholders and “agitating” for the removal of Stobart chairman Ian Ferguson.
Tinkler was shown the door in June after he wrote to Stobart shareholders and employees that he would be using his shares to vote against Ferguson’s re-election and instead install billionaire Peter Day.
Stobart said the court ruled that Tinkler had improperly shared confidential information with Day and said his counterclaim to be reinstated as an employee and director of the company had also been rejected.
Conspiracy claims dismissed
However, judge Jonathan Russen QC ruled Stobart had failed to establish its claim that Tinkler was behind an unlawful conspiracy to “injure” the infrastructure business.
Stobart bosses had accused the ex-chief executive and other key shareholders, including Woodford, of plotting to buy a majority stake in Stobart’s aviation business and then sell it for double what they paid a short time later.
Woodford said he was “shocked” by Stobart’s conspiracy allegations, which he denounced as “untrue” and going against the interest of his investors in a written statement read before the High Court last November. “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,” he said in a witness statement.
Woodford owns a 19.53% stake in Stobart. The stock is the 16th largest holding in his flagship equity income fund making up 2.01% of the portfolio. His Woodford Income Focus fund holds 1.64% in Eddie Stobart Logistics, Stobart’s trucking business.
Small victories
In another small victory for Tinkler, the court ruled Stobart directors Iain Ferguson, Warwick Brady, John Coombs and Andrew Wood had breached their duties to the company by transferring 5.3 million shares to Stobart’s employee benefit trust ahead of the AGM where Ferguson’s re-election was being voted on.
Tinkler had been trying to install himself and Day on the board, after he was ousted as chief executive. Woodford supported this move, even writing to Ferguson that he should step down, and was uncharacteristically vocal in his support of Tinkler. This put him on the opposite side of the boardroom battle to his former employer Invesco, which sided with the board.
The resolutions to install both Day and Tinkler never made it before shareholders.
Despite the improper transfer of shares, judge Russen concluded that Ferguson’s re-election was valid, pointing out that he would have had enough votes to be re-instated as chairman regardless.
Several other claims brought by Stobart against Tinkler fell by the wayside during the court case.
Tinkler’s former employer had also accused him of improperly racking up £5m of expenses, including shelling out £1.6m of the group’s funds on private jet and helicopter travel, £2.9m on corporate entertainment and £50,000 he paid for a Range Rover that he won at a Cancer Research UK auction, but these charges were dropped at the eleventh hour.
A £4m tax liability was also thrown out.
Stobart said a full copy of the judgement will be made available on its website shortly.
The court will determine what relief Stobart is entitled to receive from Tinkler for breaching his fiduciary and contractual duties in a further hearing that will take place in due course.
Woodford declined to comment on the judgement.
