Plantation A Legal Thriller

by J M S Macfarlane

  Chapter 65

  After a good night’s sleep, Ashby was at his Fenchurch Street office at half past six on Monday morning. The building was deserted and the night watchman had to let him in. No-one else was on the floor occupied by Plantation. In the teleprinter room, the machine was always switched on to receive incoming telexes from around the world.

  He knew how to work the machine and quickly entered Malory’s telex number and name with the message which read : “For Malory re Plantation, James Ashby deceased Feb 1983. Please contact Robert Ashby Urgent.”

  After he sent it, he removed all copies and destroyed them, then went to his office and thought about the coming day.

  Half an hour later, Roger Grenville walked past Ashby’s room, then stopped, walked backwards and stood at the open door.

  “Robert....you’re rather early this morning ?”

  “Yes, there’s a lot to get through today. Have you seen this morning’s paper ?”

  “No, I’ve just got in.”

  “Look at this.”

  Grenville walked into Ashby’s office and looked at the newspaper lying on the desk. On the first page of the business section was an article headed “Plantation Re Appoints Liquidator”. Ashby read from the article :

  “At the conclusion of a hearing in the High Court on Friday, there were dramatic scenes after judgment was given against Plantation Re for twenty million pounds in favour of Hellas Global Shipping Company of Athens. Outside the courtroom, Plantation’s board made a surprise announcement that it had appointed a Provisional Liquidator to wind up the company. In response, Plantation’s Managing Director, Mr Robert Ashby appeared to contradict what his board had announced about the winding up. Mr Ashby said that the judgment awarded to Hellas Global was being appealed and that there was to be no liquidation. In a separate hearing the previous day in the High Court, it is understood that Plantation’s bank accounts were frozen by an injunction obtained by another of the company’s creditors. When asked for his views on the developments at Plantation, a representative of the LRE said that he would be consulting with Mr Ashby today....”

  “This article is wrong. We must put out a press release clarifying the position and also notify the Exchange of what’s going on and call a temporary halt in our underwriting.”

  “Well, the board did pass a motion on Friday appointing George Waring to wind up the company and it a seems a little late in the day to....”

  “I called a board meeting for 10 o’clock this morning. You’ll be there, won’t you ?”

  “10 o’clock.....uh, yes, I should be around. It’s fairly short notice, though. I’m not sure whether everyone will be able to attend.”

  “That shouldn’t be insurmountable, should it ? After all, at the board meeting on Friday which I didn’t attend – a motion was passed in my absence. We may only need a quorum anyway.”

  “A quorum – yes....well, the Chairman, the Managing Director, the Secretary plus two other directors. I’m not sure whether Nigel is in today.”

  “We’ll have to get by without him if he’s not there. Also, I’ll be calling an Extraordinary General Meeting of all shareholders, twenty one days from now.”

  “What for ?”

  “Since I’ve taken over from my father, there are several things requiring urgent attention. The composition of the board for one thing – I want it changed.”

  “Well, uh....that may be difficult. Before the merger with Stirling, your father agreed they should have seven places on the board. That was a condition of the merger and why all of the old directors resigned.”

  “I’m not happy with it and I want it changed. If the Stirling directors won’t go voluntarily, then I may have to make them go. And I will be appointing further additional directors of my own. Also, it seems obvious to me that the merger hasn’t worked out – Stirling has been pure poison. It’s destroying us. And I want out.”

  Grenville became agitated and began to lose patience. “Your father understood what he was taking on before the merger and agreed to it. We didn’t have any choice.”

  “Let’s discuss it later – when everyone’s here. I want to make sure that everything is on the record.”

  “As you wish.”

  Then Grenville wandered off while thinking to himself that he and Black would have to devise new ways around any changes Ashby wanted to push through. It was clear that his enemy was becoming more adept at dealing with the problems inherited from his father and that the son intended not to repeat the father’s mistakes.

  As soon as Black arrived in the office, Grenville saw him alone and told him what was going on.

  “We’ve already set things in motion and before he gets time to do anything, it will be curtains,” smirked Black.

  When ten o’clock arrived, Ashby entered the board room with his secretary, Tara and found that all of the Stirling directors along with Black and Grenville were expecting him.

  “Come in, Robert,” said Nigel Black. “We’ve been waiting for you.”

  “Here is an agenda I’ve prepared,” said Ashby, as he handed around a sheet of paper with a list of items for discussion.

  “Now, let’s see,” said Grenville, scanning the list. “What do we have –

  ‘Item 1. Appeal against Hellas Global

  Item 2. George Waring, Westbridge Actuaries & Auditors

  Item 3. Company accounts and overseas transfers

  Item 4 Injunction by Caspian Ltd

  Item 5 Resignation of Directors & Appointment of New Directors

  Item 6 Extraordinary General Meeting of Shareholders

  Well, we certainly have a lot to get through, don’t we ?”

  “It won’t take long, I assure you,” said Ashby, taking a seat at the opposite end of the table, directly facing Grenville and the others. “I’ve brought Tara with me to take a shorthand note of everything which is being said and she will type up the Minutes at the end of the meeting.”

  “How very efficient,” said Black.

  “Items 1 and 2 – on legal advice from Plantation’s lawyers, we are appealing against the judgment which Hellas Global obtained last week. The papers will be with the Court this morning. Until the outcome of the appeal, Plantation is not insolvent, it does not owe anything to the shipowners and there is no liquidation.”

  “Can that be right ?” said Black, shaking his head ponderously. “There’s a debt which the court ordered the company to pay immediately, we have insufficient funds and we’re supposed to do nothing ?”

  This was Black’s usual way of questioning any professional advice as unsafe and unreliable.

  “If the appeal is upheld, your appointment of Waring on Friday would mean we’d be liquidating a company which hasn’t gone bust. No-one would want to do that – unless they want to sell the company off and I certainly have no intention of doing that. Which brings me to my next point – why was a liquidator appointed in my absence ?”

  “We were told that the case had gone against us, Robert and we thought it was our duty to bring in Waring straightaway. It was my decision as Chairman,” said Grenville.

  “I see. Well, I draw your attention to Rule 14.7 of the company’s Articles of Association – the Articles are the constitution governing how the company operates and what we do as a board. Rule 14.7 says

 

  “There shall be no motion passed by the board of directors to liquidate the company unless the motion is approved by a majority vote of the full board and a majority comprising at least seventy five per cent of shareholders.”

  “The motion you passed on Friday was unlawful and what are the words used by the lawyers – ‘null and void’. Until there’s a final decision by the court and a motion passed by the full board including me as majority shareholder, there will be no further talk of liquidation. I want a motion passed to that effect now and recorded in the Minutes.”

  “There’s no need for the formalities, Robert, everyone here agrees,” said Grenville while
trying to ignore signals from Black, Batistin and Wilkes to dispute the point. When Grenville said nothing, Black spoke out.

  “Well, I don’t agree. What happens if one of the claims is successful, a liquidation becomes unavoidable and you’re not in the country ?”

  “That wouldn’t be a problem. My proxy would vote for me.”

  “I hold your proxy as Chairman and I can vote for you.”

  “Thank you, Roger but I will be appointing a new proxy.”

  “And who will that be ?”

  “Plantation’s solicitor, Ed Meredith of Meredith & Macready.”

  “But he isn’t a director.”

  “Precisely, which we will deal with at item 6 Appointment and Resignation of Directors. Next – about Waring and Westbridge. They were brought in after my father’s death. I know nothing about them. If it does become necessary to bring in a liquidator, I would like to interview a range of firms and select the best candidate. Liquidators can sometimes have conflicting loyalties.”

  “But we’ve used George Waring’s firm for years.”

  “And look at the state we’re in,” shouted Ashby, as he got out of his chair and paced slowly up and down at the head of the table. “How in God’s name did Plantation ever get into this mess ? Who’s responsible for it ? My father died trying to fight off these accursed claims which were part of the business brought in from Stirling. You think that I don’t know what’s been going on ? I can see through the lot of you. That’s why there are going to be some changes – big changes – from now on.”

  While Ashby had been haranguing them, Grenville and Black had exchanged looks in which they agreed to let Ashby have his say and do whatever he wanted – but to get around it later. Both of them thought it would make no difference what he wanted. They would simply humour him. It would be impossible for him to overcome the six claims and he’d fallen at the first hurdle.

  “Now, item 3. I would like to know why various amounts of money were transferred to our nominee company in the Cayman Islands. I want to know who authorised them, how much has gone out and when. Can someone get that information for me now ?”

  “Ray, can you go to the accounts department and get that for us,” asked Grenville to Ray Wilkes. “It shouldn’t take them long – tell them we’re waiting for it.”

  “Item 4 – the injunction by Caspian. Roger, I would like to ask you this : how is it that a firm of solicitors who are hounding us for eighty five million pounds were able to get some highly confidential accounts when I, as the managing director, had never seen them ?”

  “Unfortunately, Robert, you weren’t in the office on Wednesday and we couldn’t get word to you because you were at the hearing.”

  “Why wasn’t I shown the letter ?”

  “They wrote to us Robert, in your absence and asked us to disclose the accounts. As they were threatening to injunct us, I thought it would hold them off.”

  ”Instead, it had the opposite effect – it persuaded a High Court judge that we were shifting money out of the country to avoid paying claims.”

  “We had to do something – we couldn’t just ignore it.”

  “You seem to have an answer for everything, don’t you ? You told me that my father approved these transfers. I don’t believe that.”

  “You’re calling me a liar ?”

  “I know that my father would have had no reason to want any of our capital to leave the country. We need it here. At any rate, I want a motion passed now that all of that money will be transferred back today. And we as a board will be giving an assurance in the High Court later this week that the money is back with us in our accounts at our banks in London.”

  “But that’s madness,” said Black. “If it’s brought back, it will just be available for Hellas, Caspian, Victor Oil and all the other claimants to get their hands on it.”

  “So be it. But it must come back today. Agreed ? And I want it recorded in the Minutes of today’s meeting and signed by everyone here.”

  “Of course,” said Grenville. “We needn’t have a show of hands. Everyone is in agreement with that.”

  “In future, whether I’m in the building or not, all claims correspondence, notices and so on will all go to Tara and then to Simon Wells or Ed Meredith who will speak with me about it. Is that understood and agreed ? From now on, only Simon Wells, Ed Meredith and I will deal with the six claims – and no-one else. Also, you as Financial Controller must present an up to date spreadsheet to the board every week so that we all know how much money is coming into and going out of the company.”

  “Robert, you’re in charge of the claims and they are your responsibility. We’re all absolutely agreed on that. But your father trusted me to keep him informed of the accounts position which I did on a regular basis. Why should we change that ? Don’t you trust me ? Your father did.”

  “That has nothing to do with it. Don’t you understand ?” yelled Ashby in frustration. “We are in a crisis. We don’t know whether Plantation is going to survive from one day to the next and the accounts position is crucial. In fact, I want to see a spreadsheet every day from you about where things stand. Is that agreed ?”

  “Of course, if that is what you want.”

  “Agreed and to be entered in the Minutes. Item 5. Resignation and Appointment of Directors.”

  Ashby had got out of his chair again and walked across to the window, looked out for a moment and then turned around to face everyone.

  “The merger between Plantation and Stirling has been a disaster – would all of you say that that is a fair comment ?”

  For several moments, there was silence.

  “It’s certainly been a disaster for Stirling,” sneered Nigel Black. “Before we joined Plantation, we had a five hundred per cent profit margin and overnight that was destroyed – by Plantation.”

  “Please,” said Ashby, “don’t take me for a fool. I’m an underwriter too. You took on high risk business for sky-high premiums. Stirling’s clients were communist dictatorships and the apartheid regime in South Africa. You know and I know – and everyone in this room knows – it would’ve taken just one claim to wipe you out. Instead, you passed all of your toxic claims on to us. Since then, you’ve tried to disown any responsibility. And to cap it all, you’re giving evidence against us in court. That was very neatly done. Instead, it hasn’t worked – or at least not yet. Now, I’m not going to mess about. I want Stirling to reverse itself out of the arrangement with Plantation and for both to go their separate ways. Or else.”

  “Or else what ?” shouted Black. “Don’t try and threaten me.”

  “But what you’re asking is impossible,” said Grenville. ”The cake has already been baked – you can’t go back and separate the ingredients. It’s too late for that.”

  “Well, we shall have to consider who gets a slice of the cake and who doesn’t. And the way the claims position is going, no-one is going to get anything. But to return to the original point – while we’re all going along together and until a de-merger takes place, the board will have to change. I want a new board appointed consisting of you, Roger, Nigel, myself, Simon Wells and Ed Meredith – and everyone else to resign.”

  “You’re not serious ?” said Joaquin Batistin. “We were directors of Stirling before the merger and now we’re being thrown out ?”

  Grenville raised his hands to calm the uproar in the room which continued for a solid half hour. Some of the original Stirling directors walked out in disgust while others pleaded with Black to protect them. Eventually, Grenville was able to say, “If there is to be a de-merger, then obviously the shareholders will need to vote on that. In the meantime, we will look at the composition of a new board.”

  Ashby continued. “Item 6 – an Extraordinary General Meeting of Shareholders. As Plantation is currently going through the worst period in its history, we need the approval of all shareholders to what I’ve proposed so that we can all start afresh. At the moment, unless changes are made, there w
ill be no company left at all, only a shell and all of the business will be in run-off for the next thirty years. So I hope I will have your co-operation on that – we really don’t have any choice. Well, that concludes nearly everything, for the time being. A copy of the Minutes and Resolutions will be sent around for everyone’s signatures. I will also be issuing a press release later this morning saying that there is no liquidation and writing to the LRE and our main business partners about it.”

  As he finished speaking, Ray Wilkes returned with the spreadsheet showing the transfers which had been made to the Cayman Islands. Ashby sat down for a moment and found the total for overseas balances. Just as Grenville was leaving the room, he said : “Is this correct ? It shows that twenty two million pounds have been deposited in a special account in the Caymans during the past....fourteen months.”

  “Yes, that sounds about right,” replied Grenville.

  “But if this money is brought back, we would have more than enough to settle the Hellas Global claim in full – if it came to that.”