PwC’s UK business has successfully defended a £63m High Court claim that it leaked confidential information that put its client Kundel at a disadvantage in deal negotiations.
In a judgment published on Friday, the High Court ruled that software and insurance group Quindell, now known as Watchstone, had failed to prove that a former PwC partner leaked confidential information to investment bankers at a meeting in 2015.
Watchstone alleges that information allegedly provided to the company’s financial advisers from Greenhill & Co was then shared with the bank’s client, Slater & Gordon, enabling it to submit a lower bid in negotiations to acquire part of Quindell’s business.
However, the court ruled that Slater & Gordon “had no real or substantial chance of obtaining a higher offer than that presented”. The law firm ended up paying Kundel around £637m for its professional services arm.
The meeting between Ian Green, who was then PwC’s UK restructuring leader, and the Greenhill banker came after the Big Four had been hired by Kundel to review the company’s finances and advise on restructuring following negative publicity about its accounting practices.
Quindell had argued that Green had provided the banker with an “inner rail” and “verified view of the inside (the) tent” of Quindell’s business, allowing Greenhill’s client, Slater & Gordon, to submit a lower bid than it would have otherwise .
In his 85-page judgment, Judge Jacobs said “the evidence presented by Watchstone in support of Mr Green’s serious breach of trust lacked any real persuasion”.
On the other hand, the judge concluded that emails sent by Greenhill’s banker to colleagues, which allegedly conveyed information Greenhill had given him, were “not reliable as a meeting record.”
PwC said: “We welcome today’s judgment; we have always maintained that this claim is baseless.”
Watchstone said it was “disappointed” with the court’s decision and was considering whether to appeal.
The company, which no longer has any business, has sold its business and shifted its focus to recover returns for shareholders through litigation.
It had a market capitalization of £2.7bn at one point, but an investigation by the Financial Conduct Authority ensued following an attack by short sellers and the ensuing suspension of trading in shares in 2015. The company later restated its books by hundreds of millions of pounds to correct “aggressive” accounting practices.
The ruling will come as a relief to PwC as it struggles to limit the international spread of another leaking scandal in Australia that has seen its chief executive and two other senior partners resign in the country. duty.
Emails released last week revealed that personnel at the British company had received information related to classified information from the Australian government related to a tax crackdown on multinational companies. The global boss of PwC has hired law firm Linklaters to conduct a review.