A personal statement. By John Duffield.
As readers of the financial press may be aware, Patrick Evershed, a former fund manager at New Star Asset Management, the firm I founded, has in recent weeks taken an unfair dismissal case against New Star to an employment tribunal.
I was not a party to the litigation and was not called as a witness. I was, therefore, not able to exercise a right of reply. Furthermore, everything Patrick told the tribunal panel was privileged and he could, therefore, make extreme and colourful statements knowing his statements could be reported extensively in the media.
Patrick decided to settle the case after his evidence was fully presented over five and a half days but after only one and a half days of evidence from New Star. The reporting of the case, therefore, inevitably left a one-sided view in the public mind.
Patrick made a number of statements that were exposed as misleading during cross-examination or were refuted under oath by New Star’s witnesses before he truncated the hearing. As a result, further witnesses did not have the opportunity to refute his allegations. I am, therefore, disappointed the case was settled before the tribunal panel made its judgement.
Six disputed statements at the heart of Patrick’s case are listed as examples below.
one. One of Patrick’s main complaints was I bullied him into ‘reopening [his] fund and removing the £50 million cap’ and this impacted performance
Patrick’s fund was enlarged with his agreement and subsequently he himself initiated a further enlargement. When Patrick joined New Star he accepted an incentive package that gave him more shares the larger his fund grew. Later when his fund had grown to £200 million his public statement to Bloomberg Money was, ‘My fund is only £200 million, which makes it easier for me to move round in smaller companies.’
two. Patrick claimed I bullied Roger Dossett, New Star’s UK property fund manager.
Roger told the tribunal, ‘John has never bullied me… From my experience, Duffield is a forthright man and he can be blunt but I never found him to be unreasonable or a bully… He certainly did not bully me or any members of my property team otherwise I would have instantly handed in my notice.’
three. Patrick said I ‘bullied and dominated main board directors, employees, the press and major investors’ and ‘bullied virtually everyone [I] came across’.
In a free society, it is impossible to ‘dominate’ the press. All significant companies seek to influence media coverage but if I had been able to ‘dominate’ the press, adverse articles about New Star would not have appeared. Investors cannot be ‘dominated’ and major New Star shareholders sold significant holdings during its period as a public company. As for New Star’s fund managers, I deliberately created an environment in which they had freedom to invest where they wished subject to compliance and regulation.
four. Patrick claimed he raised his concerns about bullying with three executive directors, Rupert Ruvigny, finance director, Mark Skinner, marketing director, and John Jay, development director.
At no point until the day before Patrick left New Star do Rupert, Mark or John recall Patrick making complaints about me bullying him or other fund managers.
five. In relation to fund managers allegedly being bullied, Patrick claimed, ‘twenty people were off with sickness and stress’.
The document relied on by Patrick showed nine employees out of more than 400 had been off sick as a result of stress over a 15-month period; none were shown to be fund managers.
six. Patrick claimed he had left his previous employer, Rathbones, after he became unhappy with its launch of a technology fund close to the top of the technology boom but the matter ‘was resolved amicably a short time afterwards’.
Patrick left Rathbones in acrimonious circumstances and threatened to sue for constructive dismissal. The matter was only resolved after I intervened and negotiated a peaceful settlement on Patrick’s behalf.
I do not intend to comment further on these matters. I would, however, like to express my sympathy for the innocent people who were victims of Patrick’s claims, in particular Gregor Logan, New Star’s chief investment officer. Gregor and my other former colleagues are very capable people with total integrity, yet their reputations have been sullied by Patrick in judicial proceedings. Finally, I wish to thank all those former colleagues who have made contact in recent weeks to disassociate themselves from Patrick’s views.