Plans by Sir Tom Hunter to make the billionaire Philip Green a shareholder in The Gadget Shop and put him on the board led to open hostilities between the company's shareholders within months of their takeover of the business in 2002, a court heard yesterday.
Peter Wilkinson, a technology entrepreneur and an investor in The Gadget Shop, who is suing fellow shareholders Sir Tom Hunter and his business partner Chris Gorman, told the High Court yesterday he was "seething" about Sir Tom's attempts to "chip away" at his shareholding in the company by bringing in more investors.
He and Jon Wood, a star trader at UBS, are seeking multimillion-pound damages from Sir Tom and Mr Gorman, claiming they were excluded from Sir Tom's separate purchase of the card retailer Birthdays, which they say should have been carried out through The Gadget Shop. The pair are seeking a sum equal to what they believe their 40 per cent stake in the combined business would have been worth, estimated to be about £100m.
The court heard how Mr Wilkinson had invested in The Gadget Shop in 2000, taking a 3 per cent stake, and that by April 2002, the company was teetering towards administration. Mr Wood was then persuaded to invest to help save the company, as was Sir Tom.
Sir Tom's West Coast Capital investment vehicle took a 50 per cent stake in the restructured group; Mr Wilkinson and Mr Wood owned a combined 40 per cent; Jonathan Elvidge, one of The Gadget Shop's founders, owned 10 per cent. By June 2002, however, Mr Wilkinson said Sir Tom wanted to bring Mr Green on to the board and wanted to make him a shareholder. "Why would I have wanted to give shares to Philip Green? I don't even know him," Mr Wilkinson said. "I told him, 'Will you please stop trying to take shares off me for people you know and people I don't."
At a meeting of shareholders in February 2003, Mr Wilkinson recalled that he felt he "had had enough." He said: "I thought we had done a fair deal and that we were now going to go off and make some money. But every time we heard from Sir Tom and Gorman, it was that they wanted more shares from us, and more shares and more shares."
Mr Wilkinson defended his conduct at the meeting in which he described Mr Gorman, brought in as chief executive of The Gadget Shop by Sir Tom, as "Billy Big Bollocks" and Mr Elvidge as a "gay Dutchman". "You don't expect a middle-aged man to turn up to a board meeting with dyed bright orange hair."
Mr Wilkinson claimed that later on in the same meeting, Sir Tom mentioned the Birthdays business was up for sale in the context of it being a good acquisition for The Gadget Shop to make. Sir Tom, however, has denied this in a witness statement read out to the court. He said that given the tone and aggressive atmosphere of the meeting up until this point, it would have been "ludicrous" to suggest that The Gadget Shop buy another business.
Lawyers for Sir Tom and Mr Gorman have accused Mr Wilkinson and Mr Wood of "baseless and unnecessary mud slinging" in their case against them. Lord Grabiner QC, for Sir Tom, has argued that there was no agreement between the shareholders to acquire Birthdays.
Mr Wilkinson admitted that he and Mr Wood had fallen out between themselves over their investment in the business. Mr Wood, Mr Wilkinson said, had made it clear he was not happy that Mr Wilkinson had agreed to give Sir Tom 50 per cent of the business when the Scottish retailing entrepreneur had agreed to invest in April 2002. Mr Wood was also against a share incentive scheme for the management of The Gadget Shop, believing that it was too generous and lacked sufficiently stringent performance targets. "He called me a fucking soft git," Mr Wilkinson said.
The Gadget Shop went into administration last April. The case continues.Reuse content