QUINDELL’S controversial founder, Rob Terry, has been accused of claiming £185,000 in fraudulent expenses in a High Court battle with his former employer.
The troubled insurance technology company, now called Watchstone Group, alleges that Terry spent £100,000 on a swimming pool for his family home in Hampshire and £32,000 on a holiday in Mallorca to celebrate his fifth wedding anniversary.
“The expenses were each fraudulent,” Watchstone claimed in court in papers filed last month and obtained by The Sunday Times. “[Terry] knew that he was not entitled to fund such personal expenditure from company resources.”
It is the latest twist in a saga that has rocked the City. Terry, 47, brought Quindell to the stock market in 2011 when it reversed into a cash shell called Mission Capital. In its early days, Quindell consisted of a country club near Terry’s home in Fareham, Hampshire, with a small tech division and a chauffeur service tacked on. He took it on an acquisition spree, buying more than 25 companies in complex deals often involving his past business associates.
Quindell became an insurance processing giant with a market capitalisation of £2.5bn. But trouble struck in April 2014 when an American short-seller, Gotham City Research, published a 74-page attack describing the company as a “country club built on quicksand”.
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Terry was ousted seven months later after, in effect, selling £7m of shares before telling the market that Quindell’s broker, Canaccord Genuity, had resigned. The company’s new bosses then restated its 2013 and 2014 accounts, sparking a Serious Fraud Office investigation.
Slater & Gordon, an Australian law firm that bought Quindell’s legal services division for £637m last year, is now fighting for survival after suffering a heavy writedown.
Terry was given a severance payment of almost £1.5m. He received £740,000 in December 2014, with the rest to be paid in monthly instalments. He is suing Watchstone for the final four payments — amounting to £250,000 — which he says it has withheld.
In its counterclaim and defence, Watchstone alleges that Terry broke his settlement agreement by failing to disclose fraudulent expenses. It is claiming “at least” the £1.2m it has already paid him. Watchstone has also proposed to bring Terry’s wife, Louise, into the court action. She was at one point Quindell’s finance director. Watchstone alleges she was involved in Terry’s fraudulent expenses.
Both sides declined to comment.