Capital Corp sues three former employees

Nigel Cope

City Correspondent

Troubled casinos operator Capital Corporation yesterday issued a writ against one of its former directors and two former employees "for conspiracy to injure the company and other matters arising since 1996". The company said it had taken the action "to defend the value of the business".

Capital has been hit by a series of damaging allegations about its operations which have included questions over its gaming controls and food and beverage operations as well as the conduct of directors.

Those cited in the writ are Kenneth Thompson, the former acting chief executive, Des Pereira, the former company secretary and head of finance, and Guy Hutchinson, the former purchasing manager for food and beverage.

The writ claims that the three man formed a "conspiracy" which included:

r bringing the company and its management into disrepute;

r hampering the company in the presentation of its business and the financial position in its audited accounts and its defence against the hostile pounds 192m takeover attempt by London Clubs International; and

r that they encouraged 11 other employees to wrongfully terminate their contracts in April and that they disseminated confidential information about the company, including board minutes, to the press.

Capital is seeking damages, the return of all confidential information and an injunction preventing further disclosures.

There is an additional claim against Mr Thompson for damages "on any profits made by reason of his breach of his duty [to Capital Corporation] as a director from 7 September 1993 to 22 May 1997".

The writ claims that Mr Thompson, a former finance director of Royal Bank of Scotland, acted on behalf of Ogden Corporation, a rival US casino group in connection with the proposed acquisition of the Cromwell Sporting Enterprises business which owns the Cromwell Mint casino. Capital Corporation was also trying to acquire the Cromwell Mint casino at the same time.

There is a further claim that in early 1997 Mr Thompson, Mr Pereira and Mr Hutchinson acted "to make a secret profit" by procuring Capital to purchase high-quality Cuban cigars for pounds 104,450 from a business in which they had an interest.

It is expected that Mr Thompson and Mr Pereira will hold a press conference later this week to present their case. It is also understood that Mr Thompson's lawyer has a letter from Ogden's saying that he never acted for them.

Capital's chairman, Ernest Sharp, said the company would "continue to defend the company's business and interests vigorously".

The Gaming Board, which regulates the casinos industry, is looking at the company's affairs following the allegations. Derek Burns, its deputy chief inspector, said the Gaming Board had the right to enter Capital's premises at any time during its gaming hours and inspect documents and computer files.

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