One Man Vs The company He Founded
Garnham, who lives in a two-bedroom council flat, just lately suffered a bowel
condition that has precipitated him to lose considerable weight. His seventy two-yr-outdated
wife works for minimal wage to help them, as they are all however penniless.
He describes it as “a miserable existence”.
But Garnham believes that he needs to be a multimillionaire. Rightly or wrongly,
he is angered, embittered. Even those near him giggle that his feeling of
injustice is “probably what keeps him going”. Many a true word is
spoken in jest.
His is an extraordinary story that strikes on the very origins of one of many
most profitable companies on the alternative Funding Market (Aim), the
junior stock change.
The story focuses on a variety of places, from the exotic to the mundane,
from Cameroon and Cyprus to Dumbarton and Tring. Prime ministers, present
and former, have been drawn into what boils right down to a dispute involving simply
a handful of seemingly obscure gentlemen.
Even more stunning is that the dispute surrounds an oil and gasoline producer,
Bowleven, which, although value £56m as of last Thursday, has not as but offered
even a drop of crude.
The free cannon
Garnham was one in every of the original founders of EurOil, an organization included in
1996 that is at present the main subsidiary of Bowleven. By the top of 1997, two
alleged mistakes meant that Garnham was stripped of his directorship and his
19 per cent shareholding in EurOil. This stake would probably have earned
him just a few million pounds when Bowleven listed in December 2004. For nearly
12 years, Garnham has been combating to get back that stake, hiring lawyers,
a forensic accountant and even a PR specialist people keen to work for
To Bowleven, there is no such thing as a substance to Garnham’s claims. Even if there were,
the argument comes to nought: the claim is from lengthy sufficient in the past to be heating oil price ri time
barred. Bowleven can also be recognized to possess legal opinions that suggest any
declare would, at this time, account for lower than 5 per cent of the company, meaning
it does not must be announced to the stock exchange.
And the company did acknowledge and element the dispute in its Aim admission
doc 5 years ago.
However, Garnham’s more and more erratic actions might be of interest to
Bowleven shareholders. Earlier this 12 months, the corporate was in talks with an
unnamed bidder to be sold for £130m, an enormous premium on shares that had
tumbled as commodity prices sunk. The talks terminated in April, however solely
after Noble Power was identified by the press as a possible bidder. And solely
after Garnham had fired off an e-mail to Charles Davidson, Noble’s chief
The e-mail described Garnham’s lengthy relationship with senior figures within the
Cameroon authorities to whom he had promoted British exports, from designer
shirts to spare components for tractors. He claims that this work helped result in
the West African nation joining the Commonwealth in 1995.
It additionally detailed a complaint, naming Bowleven, that Garnham had filed in
Douala High Courtroom in Cameroon. That case was thrown out in 2007, when
Garnham’s lawyer failed to turn up. It is still not sure that Noble was
the interested purchaser, and even when it have been, Garnham’s fairly unstructured
rant might look little more than the work of a crackpot. However, Garnham’s
erratic actions would surely put in danger any future negotiations.
Even Caroline Crawford, Garnham’s solicitor, admits: “Peter is a unfastened
cannon, however only because of his absolute belief that he has been wronged.”
And what can now be revealed is that a minimum of certainly one of EurOil’s founders, John
Kennedy, a man who went on to grow to be a Bowleven director and whose wife held
19 per cent of EurOil’s shares, believes that Garnham deserves compensation.
Others fervently disagree, though it is usually recognized that the board mentioned
compensation as recently as December 2005. However, Terence Heneaghan, the
then chairman, and fellow directors are understood to have dominated out the
transfer, arguing that the corporate owed Garnham nothing.
This is kind of some dispute, and one through which each side believes that it’s
one hundred per cent in the proper.
Paphos results in bathos
Bowleven buyers handed a resolution on Friday that may see the corporate
elevate $114m to be used to appraise a latest oil discovery in Cameroon. By
2011, Bowleven may at lengthy last be in the enterprise that EurOil was founded
for 15 years beforehand: producing oil.
It was late 1995 and Garnham contacted Chief Ephraim Inoni, now the Cameroon
Prime Minister, to congratulate him on the country becoming a member of the Commonwealth.
There was a second cause for the decision: Garnham wished to know the chances
of successful an oil concession primarily offshore sites for exploration
and drilling in the Gulf of Guinea if he formed an indigenous company. The
World Bank had known as on Cameroon to develop its oil belongings and the then
60-year-previous spied a cash-making opportunity. Inoni responded that it was a
A remarkably disparate group of characters then went about creating an organization
to benefit from Cameroon’s oil wealth. In 1976, Garnham had received
chatting to a Cameroon lawyer by the title of Chief Tabetando at a bar in
Tring, Hertfordshire. Primarily they turned enterprise companions, and
Tabetando would arrange Euro-Cam-ba Oil, the predecessor to EurOil, in
About a yr earlier, the Garnhams had met a Scottish physician and his wife
while holidaying in Paphos, west Cyprus. They struck up a friendship and
Garnham went to go to the couple in their home in Dumbarton. The physician
introduced Garnham to John Kennedy, a former bricklayer who had become
one thing of an entrepreneur.
Kennedy basically put teams of people together to develop initiatives, and
labored out of the offices of Glasgow architect Cobban margin:4px;”>Your adverts will likely be inserted here by
EurOil was advised to find a chairman who was recognised internationally for
work in the oil sector. This was to be Terry Heneaghan, one other outdated
acquaintance of Kennedy’s, who was chief government at listed oil exploration
and production company Pittencrieff Assets. Heneaghan left Pittencrieff
in June, and shortly after started as a guide to EurOil before becoming
chairman in 1998.
Garnham says that from the March assembly onwards, he was supplied with restricted
data on the corporate as he was no longer a director. For example, he
claims to have been unaware of Heneaghan’s involvement in 1997. He additionally
recalls being instructed off by some of the other most important characters for “talking
too much” about EurOil’s plans and prospects.
The money call
At 8pm on a Friday night time in November 1997, Garnham received a fax giving
Cantrust 14 days to pay for a portion of his shares. Underneath the company’s
articles of association, directors could ask shareholders to pay for up to a
quarter of their share holdings inside two weeks.
Cantrust and the opposite four major shareholders must pay £24,325 every,
whereas Brewster wanted to search out £6,400. Strapped for money, Garnham couldn’t
pay for Cantrust’s shares. Nonetheless, he believed and still believes that
these shares have been already totally paid up. Indeed, he has in his possession a
sequence heating oil price ri of share certificates that state these shares were fully paid up.
Garnham says that they had been basically granted to him as paid up in
alternate for his work at EurOil.
The issue for Garnham is that the company’s legal firm, McClure Naismith,
discovered that a series of fully paid up shares have been, in reality, issued
incorrectly. Brewster thought his shares were additionally absolutely paid up and he even
challenged the money name before forking out the £6,400. Share certificates
belonging to others, such as Lironi and Kennedy’s spouse, have been also recognised
as being nil paid up even if they acknowledged otherwise.
A spokesman for Bowleven says: “The error [of shares being issued
incorrectly] was established by McClure Naismith between June 1997 and
November 1997, and formally corrected. The correction process is famous in
Board Minutes dated 4 November 1997. McClure Naismith supplied advice and
assistance to the Board of EurOil on the process and liaised with local
Cameroon solicitors to check that every thing was appropriate beneath Cameroonian
law. The company has obtained a variety of opinions since then which have
confirmed that to be the case.”
The opposite directors and shareholders “capitalised mortgage notes” to pay
off their parts of the money call. In essence, this meant that the other
shareholders did not must stump up any money. The expenses they had
incurred have been considered loans to the corporate and have been recompensed out of
share capital, covering the money call. For example, Vandergrift had spent
£37,899 in “directors and consultants expenses” in addition to
£62,500 in “technical expenses”.
Garnham/Cantrust’s failure to pay up meant his 19 per cent shareholding was
deemed forfeit. The Bowleven spokesman says: “Whether there was any
indebtedness on account of Peter Garnham, who was no longer a director, is
irrelevant; there was no indebtedness as a result of Cantrust they usually were the
registered shareholder. Presumably, Mr Garnham may have assigned his
curiosity in any monies as a result of him at the moment to Cantrust and thus paid up
the shares that approach. But he didn’t do so and Cantrust’s shareholding was
Heneaghan provides: “The firm did all the pieces in keeping with legislation and Garnham
had each probability to stump up for his shares.”
In minutes dated four December 1997, the board did award Cantrust choices on eighty five
shares that could possibly be bought at £1,000 a pop at any time over the next five
years, “in recognition of Cantrust’s contribution to the company”.
The Bowleven spokesman says that the award was made “on the premise of
representations by Chief Tabetando on behalf of Mr Garnham and in
recognition of his lengthy standing private friendship with Mr Garnham”.
In accepting the choices, the EurOil administrators believed that the state of affairs
was resolved. Charles Malet de Carteret, the Cantrust trustee, wrote to the
board on 4 December acknowledging that the choices have been “granted in
substitution for the nil paid company shares which have been forfeited”.
Nevertheless, that same day, Garnham despatched a letter of his own stating the options
have been accepted “under protest”. Garnham says: “I was
confronted by a scenario where I needed to make a quick decision. I requested my
solicitor what to do and he said ‘You haven’t received any cash, settle for the
options, if only to stay in the game’.”
Yet one more dispute emerged, this time over bills owed, with Garnham
claiming £27,549.Sixty two. He later obtained about £5,000.
In 1999, Garnham was declared bankrupt because of unrelated work in
Cameroon, two months after the investors had exchanged their EurOil stakes
for Bowleven shares. The new company’s title got here from the Bow River, which
runs through Calgary, and the River Leven, which runs close to Kennedy’s
home in Dumbarton.
A year later, Garnham was stripped of his share options. He had hired a
forensic accountant, John Papi, to look into his claims. At a board assembly
on 13 November, minutes show it was resolved that Cantrust would have the
choices cancelled from 5pm two days later until there was “written
confirmation that they [Cantrust] settle for that the forfeiture of their EurOil
shareholding (190 nil paid shares) was carried out correctly and in accordance with
the articles of EurOil”.
Tabetando did not comply with the cancellation of the choices. In a note to the
board, Tabetando stated: “I have a robust ethical obligation to object to
the cancellation of the Certificate of Share Choices.”
A Bowleven spokesman points out that Garnham didn’t problem the
cancellation. Garnham says that by this stage, he was only interested by
recovering the unique shareholding.
Since then, Garnham has remained vocal, taking, and failing in, a courtroom action
In an additional blow, Papi issued a deposition to the court backing the board’s
version of occasions. Papi says: “I feel extremely sorry for Peter. He’s
worked laborious pursuing the case, however it’s on the flawed premise. It’s a
Cantrust matter, not a Peter Garnham difficulty.”
Garnham counters that he is the consultant of Cantrust. It’s also true
that he’s authorised by the trustees to act on this matter.
His British solicitors contacted Bowleven for information in 2003, by and
giant getting quick shrift. Just final month, his public relations man wrote
to Joe Clark, a former Canadian prime minister who is now a Commonwealth
special envoy to Cameroon, asking if “he may be able to help”.
Most of the principle characters have left Bowleven, even if they retain a
stakeholding. Kennedy, for example, resigned after falling out with different
members of the board, while Heneaghan left in December 2006. Heneaghan was
concerned in a large bust-up with Philip Rhind, a South African who was
chief government from 2004 to 2006. Rhind was dismissed for alleged gross
misconduct. Shortly after his dismissal, he claimed to have a “red
button” dossier which he handed to the Bowleven board. More than 50
pages long, the dossier is believed to have referred to the Garnham-Cantrust
state of affairs. Bowleven and Rhind finally settled out of court.
Tabetando is the chairman of EurOil, which is listed as a one hundred per cent owned
subsidiary of Bowleven. A senior tribal chief, Tabetando’s phrases carry
weight in Cameroon, and he is patron of the Cameroon Affiliation of English
Speaking Journalists. Lironi’s golf handicap has slipped to five, whereas
Vandergrift, who declined to comment for this text, lives in Calgary.
Bowleven is actually in the hands of a very different group of people. The
current chief executive, Kevin Hart, admitted earlier this year that the
company “was in want of resuscitation” when he took over in 2006.
Garnham continues to work on what he alleges was an unfair lack of his shares.
Kennedy, who stays in his beloved Dumbarton, now brazenly backs him: “Peter
deserves compensation for being deprived of his shares.”
The Bowleven spokesman says: “The  share name was validly made. The
level is that the shares were not paid up and that position was accepted at
the time by the entire shareholders, including Cantrust.”
However Garnham is determined to battle on. He has more letters, emails and
allegations to fireplace off. Garnham remains to be round, able to trigger trouble.
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