SBC staff back claims over L&G
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SWISS BANK Corporation employees have accused the venture capital arm of Legal & General of producing shaky profits forecasts for a client business, according to documents filed in the High Court.
The allegation came in a witness statement in support of a pounds 3.8m lawsuit by management consultant George Hosking, who is suing Legal & General Ventures (LGV) for pounds 3.8m.
Mr Hosking alleges he was forced out of a management buy-in team because he refused to go along with an attempt to massage profit projections upwards to attract investors.
SBC had been brought in to be an equity partner in the purchase of the Consumer Products Division (CPD) of BP Nutrition, now called McBride. He pulled out before the deal went through, taking instead a position as a creditor.
"LGV was well aware - indeed we had written to them about it on 19 March 1993 - that we were concerned about the achievability of the forecasts in the CPD plan," said Richard Bryant, an SBC banker working on the deal, in his witness statement. Mr Bryant also said that at a meeting on the same date the letter was sent, the future chief executive of McBride, Mike Handley, "did not seem to know enough about the CPD plan or what his strategy would be in order to achieve the forecasts contained in that plan, although he did state that he strongly believed there was 'slack' in the capital expenditure plans".
Another SBC official, Gerry Lynch, now managing director of global structure finance at SBC Warburg, said in his witness statement that a week later LGV abruptly changed its view of the business plan put together by the buy-in team from "excellent" to "a load of crap".
Mr Hosking, in his statement, alleged that he received "a number of signals ... [from] Mike Handley or LGV telling me what profit forecasts to produce ... The common factor ... was that the recommended forecasts appeared to be a function of the answer that was 'needed' to make a suitably attractive case for prospective investors".
LGV is contesting all of Mr Hosking's allegations. It claims he undermined the buy-in team by challenging its projections and was in breach of contract due to a botched presentation to investors.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments