Stobart Group drama played out in Guernsey court

Friday 29 June 2018

Part of an ongoing high profile boardroom dispute between the Stobart Group and their former Chief Executive - Andrew Tinkler - has played out in Guernsey's Royal Court.

Mr Tinkler was in attendance at the civil case this week, where Judge Russell Finch was to decide on whether a resolution due to be discussed at Stobart Group's AGM could be adjourned.

The resolution - resolution four - itself was an item on the agenda for the AGM regarding the election of directors to the company, and the dispute arose over whether shareholders of the Stobart Group could make decisions on the matter. If the resolution remained, Mr Tinkler was still up for election as Director, but if it was removed his competitor, Mr Iain Ferguson, would be elected.

Debate arose over whether the shareholders would be getting a say in said election or not - Mr Tinkler said they would not be if the resolution was removed.

This was just one legal proceeding in what has been a very high profile business dispute centred around former Stobart Group CEO, Andrew Tinkler and his differences with what his lawyers referred to as the 'Ferguson fraction.'

Stobart Group is a recognised brand within the UK, derived from a transport and logistics business run by Edward Stobart from 1976 to 2004. The Stobart Group is registered in Guernsey, which is why this court proceeding relating to company actions was taking place here.

Pictured: Mr Tinkler arriving at court.

Most of the media reports have come about since Mr Tinkler left the Stobart Group as Board Director. Questions still stand over whether Mr Tinkler was fairly dismissed by the Stobart Group - they claim it was because he was involved in wrong doing. But his argument is their claims are false, and therefore he was unfairly dismissed. It was noted in court that despite this, Mr Tinkler still remained a 9% shareholder - the third largest sharholder of Stobart Group. 

This alleged wrong doing includes, according to the national press, Stobart Group having to file a legal claim with the Commercial High Court against Mr Tinkler to recover an unspecified amount, all in relation to a tax scheme he set up and a colleague as part of a related-party transaction in 2008.

Pictured: Mr Tinkler outside court yesterday.

But on the other side of things, Mr Tinkler has also said in the UK press he will “issue proceedings” against five fellow board members if they fail to retract a statement made in a regulatory statement that he says contained "false and defamatory material about me”.

Yesterday the Guernsey Court heard from both parties about the motion or 'resolution' listed for discussion at The Stobart Group AGM. The Stobart Group wished to adjourn the particular resolution from the AGM and instead have it decided two weeks later when other proceedings relating to the Group and Mr Tinkler should have been resolved.

Their AGM had been due to take place on 28 June, but was delayed after this boardroom dispute arose as Mr Tinkler said he would oppose the re-election of chairman Iain Ferguson.

Mr Tinkler wrote to Stobart Group shareholders on 8 June urging them to vote against the re-election of Mr Ferguson. The letter said: "I am therefore writing to urge you to cast your vote at the AGM against the re-election of Mr Iain Fergusson, the company current Chairman, as director of the Company."

A further notice on 14 June 2018 sent to shareholders from the Stobart Group announced that Mr Tinkler would cease to be a Director from that date and that the company would be writing to shareholders shortly to provide them with further information on the situation, including its concerns that Mr Tinkler and his associates are attempting to secure control of the Company.

The Stobart Group has now rescheduled the AGM to 6 July at St Pierre Park and this particular court case has come about as Mr Tinkler is pursuing a civil claim against Stobart Group to be reinstated as a director on the ballot at the AGM.  Mr Tinkler says shareholders should have the right to make a decision on his candidacy, while the Stobart Group are stating that at present he is no longer a director and there are some discrepancies on whether he should be up for re-election.

Therefore it was down to Judge Finch in Guernsey to decide if Mr Tinkler would be successful in getting an injunction, meaning that the Stobart Group would be legally obliged to defer the resolution.

Prior to the case being heard, lawyers from both parties had passed Judge Finch paperwork which amounted to "around four times" as he was used to in serious criminal cases, he said.

The case was being heard in Guernsey because the Stobart Group is registered on the island.

The court heard a lengthy argument made on behalf of Mr Tinkler, which went into further detail about his claim he was unfairly dismissed and that in his opinion a committee put together to oust him had no authority to remove him. His lawyers said this background and information was necessary as even though other disputes would ultimately be heard in the UK the details were important for this courts decision to grant or not grant the injunctive.

Mr Tinkler's lawyers put his case forward with him present in the public gallery. They said the removal of Mr Tinkler as Director was not valid and that the decisions were void as in breach of fundamental duties. They put to the court that Mr Tinkler continued proceedings in the best interests of the company. The court heard that he intended to offer himself for re-election as Director and put the case to the judge that the shareholders should be able to decide on either Mr Ferguson or Mr Tinkler. They stated that resolution four must be put to shareholders and should not be removed from the AGM agenda.

Lawyers for the Stobart Group argued that they were not wishing to take the decision away from shareholders, they merely wished the relevant resolution be adjourned. Lawyers continued stating that Mr Tinkler by his own admission was a very wealthy man and had many legal avenues open to him with top lawyers, but instead he chose to pursue this injunctive relief. They said it was an odd, optimistic and speculative way to reverse engineer the situation.

One lawyer for The Stobart Group also stated that it was not relevant to discuss or go over all the matters relating to his dismissal as the decision as to whether or not he was fairly or unfairly removed would be for the English Courts. He said: "This court is not here to decide Mr Tinkler's case."

Both parties iterated their desire to minimise damaging PR for the company, yet this small legal proceeding signifies yet another public dispute mainly centred on Mr Ferguson and Mr Tinkler. Mr Tinkler's lawyers presented a case where he would not work with Fergusson, however lawyers for the Stobart Group said that nowhere did it say this was a war of attrition and that it was perfectly perceivable that when a vote took place both could be elected.

He further stated that there was no attempt to manipulate this resolution and that it had always been retirement by rotation and therefore subject to reappointment.

The court adjourned late Thursday afternoon after hearing all the evidence from both parties.

Judgement was reserved and a decision will be made early next week, mindful of the 6 July AGM.