The former head of PwC’s restructuring business has denied leaking confidential information to a London investment banker that allegedly helped City law firm Slater & Gordon get a better price in a £637m acquisition, a London court heard today.
Ex-PwC partner Ian Green is accused of disclosing commercially sensitive information about software developer Quindell’s financial status to an investment banker at New York firm Greenhill.
Green is accused of attending a “secret meeting” with Greenhill managing director Gareth Davies, during which he allegedly revealed confidential information about his client, Quindell, to the banker whose firm was advising Slater & Gordon on its acquisition of Quindell’s professional services arm.
Quindell’s successor firm Watchstone – which is bringing £63m claim against PwC in London’s High Court – claims the leaked information helped Slater & Gordon negotiate a lower price for its purchase of Quindell’s professional services arm.
When cross-examined at London’s High Court today, Green, however, denied handing over information about Quindell’s cash flow position to Davies.
Green claimed Davies “never asked me for my view” on Quindell’s financial status and said the banker was “very well aware where lines were drawn”. He said his discussions relied on publicly available information.
Watchstone claims that Slater & Gordon had initially intended to pay £700m for the professional services business, before being made aware of Quindell’s financial status by Greenhill – including information that the firm was on track to run out of cash by mid-2015.
In explaining his relationship with the Green hill banker, the ex-PwC partner said he maintained a “professional relationship” with the investment banker, as he claimed he was “expected” to maintain contact with market participants as part of his job at the Big Four firm.
Following completion of the deal, Slater & Gordon wrote down the value of its newly acquired professional services business to zero, before suing Watchstone for £637m in 2017, for fraudulent representation and breach of warranty, in a lawsuit that was later settled in 2019 for an undisclosed sum.
Quindell had originally hired PwC to review its accounts following publication of a 74-page report by short selling group Gotham City Research about the firm and its management. From 2014 to 2015, Quindell paid PwC more than £5m in fees.
Watchstone is now suing PwC for £63m for breach of contract, breach of confidence, breach of fiduciary duty and unlawful means conspiracy.
PwC denies any breaches. The Big Four firm said, however, that even if breaches occurred, the price Slater & Gordon paid for Quindell’s professional services unit was more than the amount money the business was actually worth, court documents show.
The trail continues.