Watchstone Group PLC Proposed counterclaim by Robert Terry and others (0331C)
13 June 2019 - 4:00PM
UK Regulatory
TIDMWTG
RNS Number : 0331C
Watchstone Group PLC
13 June 2019
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR").
Watchstone Group plc
("Watchstone" or the "Company" or the "Group")
Proposed counterclaim by former Executive Chairman, Mr Robert
Terry and others
In the ongoing High Court proceedings brought by Watchstone
against its former Executive Chairman, Mr Robert Terry and others,
for breach of the share purchase agreement entered into by the
Company with Mr Terry and others on 28 April 2011 in respect of the
sale and purchase of shares in Watchstone Limited ("WL") (the "SPA"
and the "SPA Proceedings"), the Company has received an application
by Mr Terry and the other defendants, seeking permission to bring a
counterclaim for approximately GBP14.7m.
The Company has obtained legal advice on the proposed
counterclaim, and considers it to be without merit and lacking in
credibility.
Although the proposed counterclaim is materially lacking in
detail, in essence it appears to be a claim in negligent
misrepresentation arising out of a tax indemnity that Mr Terry says
the Company's subsidiary WL granted to him orally in 2011 (the
"Oral Indemnity"). Mr Terry alleges that, in 2013, at and around
the time when WL paid approximately GBP3.1m to Mr Terry (the then
Chairman and Group Chief Executive) in respect of personal tax
liabilities arising as a result of the disposal of shares in WL in
2011 pursuant to the Oral Indemnity, the Company expressly (and by
conduct) made false representations that it would not challenge the
validity of the Oral Indemnity and would not seek to recover any
amount paid under the Oral Indemnity, including under the SPA.
Mr Terry now says that, in reliance on these alleged
representations, he did not seek to sell some 22.59% of his then
shareholding in the Company between January and March 2013 (which,
he says, would have yielded some GBP20m), and thereby suffered a
loss of approximately GBP14.7m relative to the price for which he
eventually sold his shares in the Company between November 2014 and
January 2015 shortly after he left the Company.
The Company's solicitors have written to the defendants'
solicitors to identify deficiencies in the proposed counterclaim.
If it is maintained (in its current form or otherwise) the Company
intends to defend it vigorously and to continue with the SPA
Proceedings.
The release of this announcement has been authorised by Stefan
Borson, Group Chief Executive Officer and Company Secretary of the
Company.
For further information:
Watchstone Group plc Tel: 03333 448048
investor.relations@watchstonegroup.com
Peel Hunt LLP, Nominated Adviser and broker Tel: 020 7418 8900
Dan Webster, George Sellar
-------------------
1. By way of background, on 16 November 2018, in separate
proceedings, Mr Terry, and other connected parties including Mrs
Terry, successfully established the existence of the Oral Indemnity
and claimed GBP1.0m (plus the award of costs and interest) from WL
in respect of further capital gains tax liabilities arising as a
result of the disposal of shares in WL in 2011, and associated
fees, pursuant to the Oral Indemnity. One issue in those
proceedings was whether the Oral Indemnity was voidable as a
substantial property transaction entered into without shareholder
approval, contrary to section 190 of the Companies Act 2006. The
High Court found that it was not susceptible to challenge on that
ground, and on 18 February 2019, the Court of Appeal granted WL
permission to appeal on that issue. The appeal is listed to be
heard in November 2019. If the appeal is allowed, WL would be
entitled to repayment of the sums paid under the Oral Indemnity
(exceeding GBP4m in total).
2. The Company's claim in the SPA Proceedings is a claim to
recover amounts paid by WL under the Oral Indemnity, and is
therefore contingent on the outcome of the appeal in the Oral
Indemnity proceedings.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCGGUAGQUPBGRP
(END) Dow Jones Newswires
June 13, 2019 02:00 ET (06:00 GMT)
Watchstone (LSE:WTG)
Historical Stock Chart
From Apr 2024 to May 2024
Watchstone (LSE:WTG)
Historical Stock Chart
From May 2023 to May 2024