The founder of troubled outsourcer Quindell has issued an apologise for his role in a controversial share deal that resulted in his ousting and left the company’s reputation in tatters.
Rob Terry announced he had quit as chairman, alongside finance director Laurence Moorse and non-executive Steve Scott, but tried to justify his actions.
All three have been under intense pressure since taking part in an opaque share-buying arrangement under which it had originally appeared that they had increased their holdings in Quindell.
However, it later emerged that their stakes had in effect been reduced due to a sale-and-repurchase agreement with US finance provider Equities First Holdings to fund the share buying.
The confusion sent the company’s shares into a tailspin and deepened yesterday when Quindell admitted it had parted ways with its corporate adviser Canaccord.
“I entered into the share transactions with the best of intentions for the company and all shareholders, and it would have been my intention to acquire more shares were it not for the restrictions due to the discussions leading to this announcement,” Terry said today. “I am clearly disappointed and sorry that events turned out as they did.”
The decline in the shares — which today edged up 3 per cent to 57.25p — has also triggered a margin call to put up more cash or shares to back up the loans, as part of the arrangement with Equities First Holdings. This will hand the US firm more than eight million Quindell shares.
Terry added: “It is likely that a margin call will be made in relation to the share transactions and, at the current share price, I would expect to relinquish my rights to acquire 8,850,000 shares rather than satisfying the margin call, as this would now no longer make economic sense.”
Based on its current share price, Quindell — which provides services to insurance companies — is worth around £300 million, compared with a peak value of around £2.5 billion.
This is the second time that Terry has been forced to quit a company he has founded, having previously resigned from the board of outsourcer Innovation Group in 2003 after it suffered a similar share price fall.
Former Investec banker David Currie — who is a Quindell non-executive and was also an adviser to Innovation Group — will take over as interim chairman. He said that Terry will remain a paid adviser to the AIM-listed group, that Scott will leave immediately and Moorse will stay for up to a year while a replacement is found.
“Rob is the founder of the business and has made a huge contribution to Quindell’s growth to date and the board thanks him for that,” Currie added.