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Ex-Quindell boss Rob Terry sues Watchstone over 'oral indemnity'

Watchstone said its ex boss was alleging that he had lost out by being prevented from selling Quindell shares at their peak due to "false representations" from the company

rob terry
Rob Terry and two board colleagues were fired by Quindell after a controversial share deal in 2014

Rob Terry, the former boss of Watchstone Group PLC (LON:WTG) when the insurance technology firm was known as Quindell PLC, is looking to sue the company for £14.7mln. 

Watchstone, which is already in a High Court battle with Terry, said the proposed counterclaim was “materially lacking in detail” but added that, based on legal advice it has obtained, it “considers it to be without merit and lacking in credibility”.

READ: Watchstone revenues driven lower by ingenie car insurance arm as challenges continue

Watchstone said that, as it understood, Terry was claiming the money he has lost out from not selling Quindell shares at their peak due to "false representations" from the company. 

The allegation suggests that Watchstone Ltd (WL), which at the time was a subsidiary of Quindell, orally granted Terry a tax indemnity in 2011 and then two years later, when Terry was paid approximately £3.1mln by WL in respect of his personal tax liabilities arising from the disposal of WL shares, the company “made false representations that it would not challenge the validity of the oral indemnity and would not seek to recover any amount paid under the oral indemnity”.

Terry's new claim is that, because he had received these alleged representations, he did not seek to sell his 22.59% Quindell shareholding between January and March 2013, which he said would have yielded some £20mln. 

Terry, who along with two other directors was fired in late 2014 over a controversial director share deal and was later found to have received almost £100,000 when the company “inadvertently” supplied him an interest-free loan for nine months, sold his Quindell shares for just over £5mln shortly after leaving the company, which is his basis for arguming that he suffered a loss of £14.7mln.

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Watchstone has been suing Terry in the High Court for breach of a share purchase agreement entered into by the company in April 2011 in respect of the sale and purchase of shares in subsidiary Watchstone Limited, just before the company floated on AIM in May of that year.

The company is also embroiled in a legal tussle with Aussie law firm Slater & Gordon, which is alleging fraudulent misrepresentation and breach of warranty as it seeks to recoup £637mln in damages for the £673mln it paid to buy Quindell’s legal services arm in 2015. The trial is expected to begin in October.

If that was not enough, Watchstone is also subject to an ongoing Serious Fraud Office criminal investigation, examining its business and accounting practices during the Quindell years.

Shares in Watchstone were up 0.6% to 76.42p in afternoon trading on Thursday.

Quick facts: Watchstone Group PLC

Price: 50.5 GBX

Market: AIM
Market Cap: £23.25 m

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