The controversial flotation of the defence technology group Qinetiq ran into fresh trouble yesterday after Cambridge University scientists launched a $400m (£230m) lawsuit against the company.
British Titanium, a tiny spin-off set up by a group of former Cambridge metallurgists and entrepreneurs, claims Qinetiq reneged on a deal to sub-license a revolutionary new technique for producing titanium, the ultra-expensive metal used in applications from spacecraft and stealth bombers to tanks and car engines.
James Hamilton, the chairman and chief executive of British Titanium, alleges he went to Qinetiq's forerunner, the Defence Evaluation Research Agency, for help in commercialising the technology but the company then decided to end a licensing agreement with British Titanium. Mr Hamilton, who says British Titanium has contracts with Nasa, bases the $400m claim on loss of potential future investment and profits. One of its directors is Derek Fray, the former head of Cambridge University's department of material science and metallurgy who originally developed the titanium process.
Mr Hamilton, who has put £300,000 of his own money into the project, said: "I am as mad as a snake. I have spent eight years of my life developing this and just as we are on the point of going ahead they say they are terminating the licence."
Qinetiq said it had taken legal advice and believed the allegations were "unsubstantiated and without merit". It added that British Titanium's claim was "spurious, speculative and without basis" and would be vigorously defended. A spokesman added that the threatened action would not have a "material adverse effect" on Qinetiq's financial position, nor would it interfere with the flotation. The company's financial advisers will price the shares on Thursday night and they will begin trading the following day.
It is the latest in a series of controversies to dog the sale, the first flotation of a state-owned asset since Labour came to power in 1997. There has been an outcry over the sixfold profit the US private-equity group Carlyle will make from its initial investment, and the £24m shareholding that Qinetiq's executive chairman, Sir John Chisholm, will emerge with after the float.Reuse content