Co-op to press for hefty damages
CWS threatens legal action as Regan returns boxes of confidential information to the High Court
Thursday 24 April 1997
The move came after Mr Regan returned seven boxes of confidential CWS information to the High Court. The material had been obtained with the help of Allan Green, the former retailing controller of the CWS who was suspended last week. The CWS said Mr Regan was then using the information to prepare to launch an audacious pounds 1.5bn break-up bid for the 130-year- old movement.
The boxes contained a breathtaking array of information including minutes of CWS board meetings, computer disks, management accounts, policy documents, information about directors and the name and address of every CWS member.
In his sworn affidavits Mr Regan admitted that the confidential material was copied widely within the financial community and that Hambros, his financial advisers, retained copies. Stolen computer disks were downloaded on to several computers in the City. The CWS said the contents were still on the hard disks of computers at Lloyds Bank Registrars and at Galileo, the offshoot of Lanica Trust being used for the bid.
A CWS spokesman said: "The affidavits filed in court by Andrew Regan tell an extraordinary story. Over many months, Allan Green was systematically stealing documents to order and it appears that he was encouraged to do that by Mr Regan and David Lyons [Mr Regan's right-hand man]. [They] then used that for their own purposes."
In a string of abusive letters sent to Mr Regan, his fellow directors and his advisers, the CWS lambasts the young entrepreneur's tactics and his ethics.
A letter from the CWS chief executive, Graham Melmoth, said: "Mr Green stole an enormous quantity of documents - they fill seven large boxes ... Could you please tell us what reward or inducements were offered to Allan Green?"
In his affidavit, Mr Green admits to meeting Mr Regan six of seven times between September last year and this April: "I now unreservedly accept that I exceeded my authority and was in breach of my obligations as an employee," he said. Mr Regan said that material was copied and sent back by courier to Mr Green's home.
The CWS also despatched letters to Mr Regan's financial and legal advisers questioning their integrity. The letter to Lord Hambro, chairman of Hambros Bank describes Mr Green as "a common thief". It also asks when Hambros was shown the confidential information and why it did not question how they was obtained. "Did any of you people ask Mr Regan: where did these documents come from and how were they obtained? If not why not?".
In an attempt to diffuse the situation, David Lyons sent a letter to every member of the CWS board trying to call off the legal wrangle. It said: "I am writing to ask you whether, in preference to continued legal proceedings, it would be in he bet interests of members to receive details of the proposal and allow them to reach a decision."
This was treated to a contemptuous response from Lennox Fyfe, the CWS chairman.
He said: "You mention the legal proceedings. Let me make the position clear. We intend to press on with those proceedings and to secure a judgment for substantial damages against you and your fellow conspirators ... As for your proposal, I have given instructions that it should be returned to you unopened and unread."
The CWS maintains that its board is unanimous in its opposition to Mr Regan's break-up bid. It says that its corporate members, the regional societies, will voice their support for the CWS at its annual meeting next month.
Meanwhile the CWS denied that it was still operating a surveillance operation on Mr Regan and his advisers. The Regan team claims they are still being followed and and being filmed. The CWS says it called off the security firm Control Risks on Friday.
However, it has emerged that Control Risks was not the first firm approached. The CWS went to rival firm Kroll Associates first but found that they were already looking into Regan's affairs for another party. It is understood that Kroll had been hired by Allied Irish Banks, which Mr Regan had lined up to buy the Co-op Bank if his break up bid was successful.
Nomura International has emerged as Mr Regan's main backer and is prepared to fully underwrite pounds 1.2bn of debt finance for his bid. This would see Co-op members receive a cash payment of pounds 1,000 each. The Co-op Union would receive pounds 10m to give to "good causes."
One source close to the bid camp said: "The Co-op is now in play. If Regan does not get, someone else will."
The CWS and the Regan camp are due in court tomorrow where Justice Lightman will decide whether or not the injunction banning the use of confidential information should be lifted.
The CWS says it will ask the court to make the interim injunction permanent."
Comment, page 21
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