KPMG could face single writ
Tuesday 28 February 1995
More than 100 dockers,supervisors and security staff allege they were forced to surrender their investment in Medway Ports at far below its true value. A joint action would mean a more powerful case against the accountancy firm, which is blamed for the staff missing out on a multi- million-pound windfall.
KPMG said the shares were worth £2.50 each. But the company was sold shortly after for £38 a share. The former employees sold a total of 350,000 shares worth £875,000 at £2.50 each. Yet, at £38 a share, they would have made a profit of £13.3m.
Des Crampton, Medway's former operations director, and Keith Middleton, former legal director, owned 113,000 shares between them. They missed out on an estimated £4m payout after selling shares on the basis of KPMG's assessment, made in March 1993. Six months later Medway was sold to Mersey Docks and Harbour Company for £104m, with remaining employees making an average of at least £25,000 each.
Peter Vincent, then chief executive, made about £12m and has since left the company.
The ex-employees have been trying to negotiate with KPMG to agree integration of the writs, but have felt the accountancy firm was dragging its feet.
They are now considering seeking High Court approval for consolidation, which they argue would substantially reduce their legal costs. The process is rare but their counsel believe it is possible in what they regard as exceptional circumstances.
KPMG said any action would be vigorously contested but spokesman, Tim Roberts, refused to comment on suggestions the firm was using delaying tactics. "Several things about this affair are inaccurate," he said.
Medway was sold to a management-employee buyout in 1992, but dockers were involved in a strike over contracts and were deemed to have made themselves redundant and thus had to sell their shares, which went mainly to city institutions. An industrial tribunal found they had been unfairly dismissed.
Originally, four writs were issued against KPMG by employees. It had not been decided how much to seek in damages in a single writ.
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