Directors and company secretaries – Stobart Group Ltd v Tinkler
A bitterly fought board-room conflict between logistics firm Stobart Group and their former chief executive Andrew Tinkler has come to a welcome conclusion for chairman Iain Ferguson who says he found himself on the receiving end of a “tirade of abuse” from the CEO.
Jonathan Russen QC found Mr Tinkler had acted in breach of his fiduciary and contractual duties to Stobart in a number of ways – for one, speaking to the company’s significant shareholders and agitating for the chairman’s removal by orchestrating a letter to the board by the executive leadership team and a petition by employees.
The judgement ruled that his constant criticism of management and improper sharing of confidential information with retail magnate Philip Day were examples of occasions in which the former CEO acted against the interests of the company. On these grounds, the high court found Mr Tinkler’s dismissal by Stobart to be lawful as was the re-election of Mr Ferguson at the company’s AGM in July 2018.
Tinkler’s intention was for Philip Day to replace Stobart’s chairman Iain Ferguson
so the board could increase Mr Tinkler’s pay and reinstate him as chief executive or executive chairman. On this basis, Stobart Group bosses sued Mr Tinkler, claiming that he conspired against the company. Mr Tinkler, who acted as CEO for the FTSE 250 company for just under a decade denied any wrongdoing and launched a counter-claim against Stobart Group for unlawful dismissal.
Ian Rosenblatt, senior partner for the firm who acted for Stobart said: ”It is not acceptable for one dissenting director to try to destabilise the company while remaining a board member.” The Judge did, however, find that four Stobart directors were within breach of their own fiduciary duties by using company funds to swing a vote at the AGM in their favour. According to Tinkler, these findings serve to prove that those four directors “have no place on the board”.
Nevertheless, the high court concluded that the directors were specifically not in breach of duty in removing Mr Tinkler as a director of the company, bringing the case to a conclusion – for now. According to judge Jonathan Russen, the former CEO Andrew Tinkler “had developed a real grumble about what he felt had been his serious under-remuneration — whether in cash or shares — for his time, efforts and results when he had been CEO.”
In light of the judge’s findings regarding the £5.3m in shares that were transferred to the employee benefit trust ahead of the AGM, Mr Tinkler called for the four directors to “step down without further delay” and is likely to appeal.
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