David Ross takes the stand in Gallagher vs Ardonagh trial

royal-courts

David Ross, CEO of the Ardonagh Group, yesterday gave evidence at the Royal Courts of Justice in an ongoing trial between Gallagher and Ardonagh-owned Bishopsgate.

Gallagher-owned Alesco is accusing the defendants of poaching staff and business, after a number of employees left Gallagher-owned Alesco for Ardonagh companies in 2017.

Ross was cross-examined by Gavin Mansfield QC, the lawyer for Alesco, who contended that, with regard to the recruitment of four former Alesco employees, Ardonagh “didn’t care if it was lawful so long as you didn’t get caught”. Ross denied that.

The contention came in a line of questioning concerning an Ardonagh remuneration committee meeting on 9 May 2017.

Ross said that the recruitments from Alesco were “certainly discussed” at the meeting, though there are no minutes for the meeting in question.

Asked by Mansfield why this was the case, Ross said that it was “complicated” and “unusual” meeting, citing ongoing M&A activity and the presence of a number of advisors in the room.

When Mansfield asked Ross about a note written at the meeting by Ardonagh legal counsel Caroline Fallon, which read – in relation to Gallagher – “conflict inevitable”, Ross said he was “acutely aware” of the possibility of legal action in response to the recruitment of Alesco employees.

“We set this up to be a legal move, but thought they would probably litigate anyway,” he said. “It’s an imperfect science hiring people in London.”

The loan to Peter Burton

A large part of Mansfield’s cross-examination was concerned with a £625,000 loan to Peter Burton, one of the former Alesco employees who joined Ardonagh-owned Bishopsgate from Nevada TopCo: an investment vehicle of Ardonagh private equity firm Highbridge, a move allegedly arranged by Ross.

Pointing out that Ross did not know Burton well from Gallagher, having not been in contact with him since his departure from Gallagher in 2015, Mansfield asked the Ardonagh CEO whether his role in arranging the loan was out of friendship.

Ross said it wasn’t, saying that his reasons were “partly commercial, partly humanitarian”, in reference to financial difficulties Burton had found himself in.

Ross went on: “I affected an introduction including a recommendation that if it could be done, we should help Pete out.”

Drawing the court’s attention to emails which seemed to show the loan arrangement being dealt with by Ross’ office, with documents attached to emails to and from Ross’ personal assistants, Mansfield asked whether it was the case that Nevada had merely “rubber-stamped” a loan set up by Ross.

Ross said: “No, they were aware of it from the remuneration committee meeting, where I spoke about Pete.”

Ross described the terms of the loan – which was interest-free, provided that Burton repaid the amount by 30 September 2017 – as “favourable”, adding: “I didn’t set the terms.”

Asked what the security on the loan was, Ross said: “Pete was the security”, explaining that the money was lent against the price Burton was likely to command if he was retained by Alesco or went elsewhere in the market.

He denied accusations that the money was lent with the view that Burton would come and work for Ardonagh, saying that Burton could have paid back the money whether he stayed at Gallagher or went to another player like RK Harrison. The loan was there purely to offer Burton, “breathing space”, Ross said.

When Mansfield asked if such arrangements were unusual, Ross admitted: “This is a very unusual arrangement yes.”

The recruitment of James Brewins

Ross was also questioned on the matter of whether Burton knew about Ardonagh’s efforts to recruit James Brewins, with whom he worked at Alesco.

Ross said: “Pete Burton was worried about being homeless, not worried about James Brewins,” and the “only conversations we were having with Peter Burton were about his financial predicament. That was it.”

Mansfield later asked Ross if he remembered meeting with Brewins on 8 June, the day before Brewins resigned from Alesco. Ross said that while he didn’t recall, he was “happy to agree I did have it” [the meeting].

Pointing out that Ross’ witness statement made no mention of the meeting with Brewins, Mansfield put it to him that he had “sought to distance yourself from discussions with Brewins”. Ross denied this.

The court also heard about an email exchange between Robin Todd and Darren Conlon, who had already been recruited to the Bishopsgate energy team, in which Todd wrote to Conlon: “thought Brewins was supposed to be part of the second wave”, suggesting a planned timeframe to the resignations from Alesco.

Ross’ response to the email was to say that Todd and Conlon “actually didn’t know anything”.

Todd had sent the email chain to Conlon’s former work email address at Ed Broking, the contention being that they were “just up to mischief I think.”

Ross had earlier seemed to suggest to the court than Todd and Conlon were doing some of the “legwork” in regard to Brewin’s recruitment.

When it was put to him that this conflicted with what he had said with regard to their not knowing about Brewins, Ross said: “I appear to have misspoken” and that he was “talking to Robin [Todd] and Darren [Conlon] about energy, but I don’t think they were aware of James Brewins.”

The recruitment of Nawaf Hasan and Gerard Maginn

Ross was also questioned about the recruitment of Nawaf Hasan and Gerard Maginn.

A Whats App message sent to Ross from recruitment consultant, Arabella Cooke said: “Met with GM [Gerard Maginn] this am. There are some things were need to help him with. We cannot rely on N to completely speak for him.”

Asked by Mansfield whether he thought this showed that Hasan and Maginn were negotiating to leave Alesco for Bishopsgate as a team, Ross said: “I don’t read it that way.”

Asked whether he had made it clear to Cooke that the two needed to be dealt with separately, which Mansfield said seemed absent from the Whats App message logs produced by Ardonagh’s solicitors, Ross said: “I was crystal clear with Arabella on that.”

Mansfield also read out messages between Ross and Cooke in which Maginn was referred to as Hasan’s “sidekick”, and asked Ross whether this showed that Hasan was having conversations with Cooke on Maginn’s behalf as well.

“I would agree on this one,” said Ross.

Mansfield put it to Ross: “You just didn’t care that Hasan and Maginn were talking to each other. You knew you were talking to them as a team and not as individuals.” Ross denied this.

Ross was also questioned about a meeting orchestrated by Hasan with Basil El-Baz, the CEO of Carbon Holdings, the parent company of one of the clients Alesco alleges to have lost business from to Ardonagh-owned Price Forbes.

Ross said he couldn’t recall the meeting and that he met with El-Baz “to explain the Ardonagh group”.

“I definitely wasn’t there to pitch for a client,” he went on. “It was at Pret A Manger and it was informal.”

With reference to Ross’ witness statement, in which he conceded that meeting El-Baz was inappropriate “in hindsight”, Mansfield said that he knew it was inappropriate at the time.

He said: “You just didn’t care whether you were on the lawful or unlawful side of the line.”

“That’s definitely not true,” said Ross.

Ross will continue to give evidence in court today. The trial continues.

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