A computer services company was built up by Tory-controlled West Wiltshire District Council in the 1980s into a profitable concern but was then transferred in mid- 1988 to a group of council officers as a private company, West Wiltshire Information Systems. The council received no payment for the company nor did it get a valuation or independent advice.
Six former council officers have denied conspiring to defraud West Wiltshire by dishonestly obtaining the computer business.
They are Gerald Garland, the former chief executive, Rodger White, the former leisure director, Frank Archer, the former technical services director, David Wilkie, the former council solicitor Richard Gilbert, the former computer services director and Raymond Perkins, the former software marketing manager. Roger Pugh, the former deputy chief executive, has been ruled unfit to plead.
Mr Garland and Mr White also face a further charge of conspiring to defraud the council by dishonestly converting bonuses into salaries for Mr White and Mr Pugh who, unlike the others, remained in the council's employment after the company was formed.
John Royce QC, for the prosecution, said the men 'were sitting on a gold mine and they were looking for an even bigger pot of gold at the end of the rainbow'. The council was panicked into privatising its successful computer business, which supplied many other local authorities, after being wrongly advised by Mr Garland that new government legislation restricting the scope of council-owned companies was likely to affect the future of the company. The legislation, however, did not apply to computer services.
Without obtaining independent advice, Mr Garland advised councillors to pass the computer services business to WWIS, which had as its three directors Mr Garland, Mr Perkins, and Mr Gilbert, who owned three-quarters of the shares. In the six months after privatisation, the company made a profit of pounds 100,000 and soon afterwards the owners were offered pounds 6m for it. This meant the three directors would have been worth pounds 1.5m each.
Mr Royce added: 'By 1991, it could have been worse, in the order of pounds 20m.' Yet the business, Mr Royce said, had come from 'council assets' rather than from 'the entrepreneurial skills of the former council officers'. Mr Garland was 'well aware of the value of this council property and could see the opportunity for personal gain'. When privatisation was first mooted, the council was to have retained a 49 per cent share. Yet, a few weeks later this was dropped to 25 per cent and by the time it was privatised in mid-1988 the council retained nothing.
Mr Royce said Mr Garland was central to the conspiracy and despite his involvement with WWIS, remained as chief executive of West Wiltshire District Council for another year. It was 'a classic conflict of interest'.
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