L&G 'wanted to massage forecasts'
Sunday 26 November 1995
Management consultant George Hosking is suing Legal & General Ventures (LGV) for pounds 3.8m after he was forced out of the team that eventually bought the Consumer Products Division (CPD) of BP Nutrition, now called McBride.
Mr Hosking claims he initiated the bid and was promised the job of executive chairman and a 5 per cent stake.
Mr Hosking's barrister, Michael Briggs, QC, told the court that his client was under pressure to produce higher projected profit figures to help secure backing from other financial institutions.
He said LGV based its figures on CPD's, and removed from his client's business plan "great tracts of the risk analysis" and substituted more optimistic projections. He said that between the pounds 272m buy-in in 1993 and McBride's pounds 329m flotation last summer, his client's forecasts "proved to be nearer the mark",
LGV claims Mr Hosking was in breach of contract due in part to a botched presentation to potential investors. His insistence on a programme of cost-cutting to achieve profits of pounds 51m by 1995 was seen as disharmonious.
The relationship was terminated after Mr Hosking and Michael Hanley, now the chief executive of McBride, failed to agree on their roles. The company eventually chose Lord Allen Sheppard from Grand Metropolitan to be its non-executive chairman. The case continues.
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