A dramatic twist in the High Court battle between Sara Murray OBE (pictured) and her former firm Big Technologies plc has seen it accuse her of forgery and deliberate falsification of documents.
Murray is accused of doing so to push through the company’s £577m IPO in 2021 after five former shareholders claimed they had been forced to sell their holding in the company during a 2018 management buyout, denying them the opportunity of cashing in from the float.
The new accusation could “materially adversely impact the position of the company in the… litigation [brought against it by the former shareholders]”, Big Technologies said, adding: “The company has also concluded that it and Buddi are unlikely to be able to successfully defend material elements of the claim.”
Big Technologies is embroiled in a £320m High Court battle with Murray after dismissing her from the position of CEO in March. In June we reported how Murray’s assets had been effectively frozen during the case; now Big Technologies is expanding its claim against her, although it has opened the door to an out-of-court settlement.
Murray – who founded and sold comparison website Confused.com earlier in her entrepreneurial career – launched people monitoring specialist Big Technologies, trading as Buddi, in 2005. It provides the Buddi electronic tagging system to the prison service, among other products.
She led a management buyout for £12.3m in 2018 – the circumstances of which are at the centre of the controversy.
Ex-husband
Five of the company’s early investors – representing aggregate interests of approximately 7.9% – are suing Buddi, alleging that Murray rigged the 2018 buyout vote.
Murray hit back by claiming that they had been bankrolled behind the scenes by her ex-husband Michael Jackson, former chairman of software giant Sage, whom she split from in 2009. Both the former investors and Jackson denied this accusation.
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Dismissal
Murray – who was once appointed to the technology strategy board of Gordon Brown’s Labour government – was sacked this summer following an internal investigation with legal counsel.
She was accused of failing to disclose interests in entities that collectively hold 17.3% of Big Technologies’ shares, and of providing false information during the company’s 2021 IPO.
The entities in question are Zinc Limited, Monitoring Partners Limited, RCP Limited and Romelle Limited. The accusation is that she used offshore shell companies to push out minority shareholders.
The Rickmansworth-based firm alleges that Murray also improperly diverted significant funds from the group prior to 2019.
In May Big Technologies plc appointed Ian Johnson as CEO and Mike Johns as director and CFO of the company, while interim CEO Daren Moris stood down. Alexander Brennan joined as chair in April.
Latest development
Big Technologies notified the London Stock Exchange this morning that it had identified several cases of forgery and falsification of documents by Murray.
It said these include board minutes of Buddi from 2018 and emails from the same period which, on their face, purported to be sent by certain shareholders, showing their agreement to sell their shares to the company for cash.
The firm said metadata showed these documents had been forged or deliberately falsified more than three years after the dates on their face – and, specifically, in the days immediately after the former shareholders first notified the company of their litigation.
Big Technologies is accusing Murray of doing so to “cover up her wrongdoing at that time, including so that the company’s IPO could proceed”.
“There were no such board meetings at the purported times and places in 2018 and the company believes no such meetings occurred,” Big Technologies stated.
“In particular, the company has checked all mailboxes of the directors of Buddi at that time to which it has access and there are no calendar invites and no emails indicating that the meetings were going to, or did, happen.
“In fact, at the time of one purported meeting, one director was in Scotland and at the time of the other purported meeting, another director was in Australia.”
In response, Big Technologies has provided draft re-amended particulars of claim to the defendants in the ongoing proceedings against Murray and others in the High Court which include new claims and further particulars of wrongdoing.
It said it had taken the unusual step of releasing the information “so that there is no room for doubt about the severity of, and responsibility for the implications of, these matters, and also so that any statements that Sara Murray may make… can be understood and assessed against the background of the clear, specific and detailed facts that the company is disclosing today”.
Despite admitting its position in the litigation against it by the former shareholders may be materially compromised, it added: “The claimants’ case is still, in the company’s view, flawed and is therefore denied on a number of other bases, including in relation to the extent of the loss (if any) of the claimants and the remedy (if any) that may be available to them.
“There can be no certainty at this stage as to the precise outcome of the Buddi litigation, but the company would like to achieve a consensual outcome, if possible on acceptable terms.”
It also offered mediation, with a view to settlement, to Murray and associated parties “as an alternative route to what will otherwise be protracted litigation”.
Alexander Brennan, chairman, said: “The new developments announced today are of a very serious nature and have important implications for the company’s proceedings against Sara Murray, as well as its position in the Buddi litigation.
“Whilst the board has been successful in enabling the executive team to focus on the group’s strategy and delivering for shareholders without the distraction of litigation, we very much hope mediation can be achieved so that all parties can move forward efficiently.”
Share price
The firm saw its share price drop from 105p to 64p in March. It recovered most of that value but has plummeted below 81p after a 12% drop in the first hour of trading this morning.
It has a market cap of £239m at the time of writing (9am), with £30m having been wiped off its value since 8am.