One Man Vs The company He Founded
Garnham, who lives in a two-bedroom council flat, recently suffered a bowel
condition that has brought about him to lose considerable weight. His seventy two-12 months-previous
spouse works for minimum wage to support them, as they are all but penniless.
He describes it as “a miserable existence”.
However Garnham believes that he needs to be a multimillionaire. Rightly or wrongly,
he’s angered, embittered. Even those near him laugh that his feeling of
injustice is “probably what keeps him going”. Many a real word is
spoken in jest.
His is an extraordinary story that strikes at the very origins of one of many
most profitable companies on the choice Funding Market (Aim), the
junior inventory trade.
The story focuses on a variety of areas, 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 just
a handful of seemingly obscure gentlemen.
Even more shocking is that the dispute surrounds an oil and gas producer,
Bowleven, which, though value £56m as of final Thursday, has not as but offered
even a drop of crude.
The loose cannon
Garnham was one among the unique founders of EurOil, a company integrated in
1996 that’s petroleum equipment hsde johnson right now the main subsidiary of Bowleven. By the tip of 1997, two
alleged errors meant that Garnham was stripped of his directorship and his
19 per cent shareholding in EurOil. This stake would in all probability have earned
him just a few million pounds when Bowleven listed in December 2004. For almost
12 years, Garnham has been preventing to get back that stake, hiring legal professionals,
a forensic accountant and even a PR specialist folks keen to work for
To Bowleven, there is no such thing as a substance to Garnham’s claims. Even when there were,
the argument comes to nought: the declare is from long enough in the past to be time
barred. Bowleven is also identified to possess legal opinions that recommend any
claim would, right this moment, account for lower than 5 per cent of the corporate, which means
it does not must be announced to the stock change.
And the company did acknowledge and detail the dispute in its Goal admission
document five years ago.
Nevertheless, Garnham’s increasingly erratic actions may very well be of curiosity to
Bowleven shareholders. Earlier this yr, the corporate was in talks with an
unnamed bidder to be offered for £130m, an enormous premium on shares that had
tumbled as commodity prices sunk. The talks terminated in April, but solely
after Noble Vitality was identified by the press as a doubtless bidder. And solely
after Garnham had fired off an e-mail to Charles Davidson, Noble’s chief
The email described Garnham’s lengthy relationship with senior figures within the
Cameroon government to whom he had promoted British exports, from designer
shirts to spare parts for tractors. He claims that this work helped result in
the West African country becoming a member of the Commonwealth in 1995.
It additionally detailed a complaint, naming Bowleven, that Garnham had filed in
Douala High Court docket in Cameroon. That case was thrown out in 2007, when
Garnham’s lawyer failed to show up. It remains to be not certain that Noble was
the fascinated purchaser, and even when it had been, Garnham’s pretty 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, but only on account 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 change into a Bowleven director and whose wife held
19 per cent of EurOil’s shares, believes that Garnham deserves compensation.
Others fervently disagree, although it is also recognized that the board mentioned
compensation as not too long ago as December 2005. Nonetheless, Terence Heneaghan, the
then chairman, and fellow administrators are understood to have dominated out the
transfer, arguing that the corporate owed Garnham nothing.
This is sort of some dispute, and one through which each facet believes that it’s
one hundred per cent in the proper.
Paphos leads to bathos
Bowleven investors passed a decision on Friday that can see the company
elevate $114m to be used to appraise a latest oil discovery in Cameroon. By
2011, Bowleven might at lengthy final be in the enterprise that EurOil was founded
for 15 years previously: producing oil.
It was petroleum equipment hsde johnson late 1995 and Garnham contacted Chief Ephraim Inoni, now the Cameroon
Prime Minister, to congratulate him on the nation becoming a member of the Commonwealth.
There was a second motive for the call: Garnham wanted to know the possibilities
of profitable an oil concession primarily offshore sites for exploration
and drilling within the Gulf of Guinea if he formed an indigenous company. The
World Bank had known as on Cameroon to develop its oil assets and the then
60-yr-outdated 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 bought
chatting to a Cameroon lawyer by the name of Chief Tabetando at a bar in
Tring, Hertfordshire. Essentially they turned enterprise partners, and
Tabetando would arrange Euro-Cam-ba Oil, the predecessor to EurOil, in
A few 12 months earlier, the Garnhams had met a Scottish doctor and his spouse
while holidaying in Paphos, west Cyprus. They struck up a friendship and
Garnham went to visit the couple in their house in Dumbarton. The doctor
launched Garnham to John Kennedy, a former bricklayer who had turn out to be
something of an entrepreneur.
Kennedy primarily put teams of people collectively to develop tasks, and
labored out of the workplaces of Glasgow architect Cobban margin:4px;”>Your advertisements will likely be inserted here by
EurOil was suggested to discover a chairman who was recognised internationally for
work in the oil sector. coal Gasification This was to be Terry Heneaghan, another outdated
acquaintance of Kennedy’s, who was chief executive at listed oil exploration
and manufacturing company Pittencrieff Resources. Heneaghan left Pittencrieff
in June, and shortly after began as a guide to EurOil earlier than changing into
chairman in 1998.
Garnham says that from the March meeting onwards, he was provided with limited
data on the corporate as he was not a director. For example, he
claims to have been petroleum equipment hsde johnson unaware of Heneaghan’s involvement in 1997. He additionally
recalls being instructed off by a few of the opposite primary characters for “talking
too much” about EurOil’s plans and prospects.
The cash call
At 8pm on a Friday evening 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 may ask shareholders to pay for up to a
quarter of their share holdings inside two weeks.
Cantrust and the other four principal shareholders would have to pay £24,325 each,
while Brewster needed to search out £6,four hundred. Strapped for cash, Garnham couldn’t
pay for Cantrust’s shares. However, he believed and still believes that
these shares had been already fully paid up. Certainly, he has in his possession a
series of share certificates that state these shares were fully paid up.
Garnham says that they have been essentially granted to him as paid up in
change for his work at EurOil.
The issue for Garnham is that the company’s authorized agency, McClure Naismith,
discovered that a series of totally paid up shares have been, the truth is, issued
incorrectly. Brewster thought his shares had been also absolutely paid up and he even
challenged the cash call earlier than forking out the £6,400. Share certificates
belonging to others, resembling Lironi and Kennedy’s wife, have been additionally recognised
as being nil paid up even if they acknowledged in any other case.
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 procedure is noted in
Board Minutes dated four November 1997. McClure Naismith provided recommendation and
help to the Board of EurOil on the procedure and liaised with native
Cameroon solicitors to verify that all the pieces was correct beneath Cameroonian
legislation. The company has obtained quite a few opinions since then which have
confirmed that to be the case.”
The other directors and shareholders “capitalised loan notes” to pay
off their parts of the cash name. In essence, this meant that the other
shareholders didn’t need to stump up any money. The bills that they had
incurred were thought-about loans to the company and were recompensed out of
share capital, overlaying the money name. For instance, Vandergrift had spent
£37,899 in “directors and consultants expenses” as well as
£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 as a result of Peter Garnham, who was no longer a director, is
irrelevant; there was no indebtedness resulting from Cantrust they usually had been the
registered shareholder. Presumably, Mr Garnham may have assigned his
curiosity in any monies resulting from him at the moment to Cantrust and thus paid up
the shares that method. However he didn’t accomplish that and Cantrust’s shareholding was
Heneaghan provides: “The firm did the whole lot in keeping with law and Garnham
had each likelihood to stump up for his shares.”
In minutes dated four December 1997, the board did award Cantrust options on 85
shares that could be purchased at £1,000 a pop at any time over the next 5
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 personal friendship with Mr Garnham”.
In accepting the choices, the EurOil directors 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 were “granted in
substitution for the nil paid firm shares which have been forfeited”.
However, that same day, Garnham sent a letter of his personal stating the choices
have been accepted “under protest”. Garnham says: “I was
confronted by a state of affairs the place I had to make a fast determination. I requested my
solicitor what to do and he mentioned ‘You haven’t acquired any money, settle for the
choices, if only to remain within the game’.”
One more dispute emerged, this time over bills owed, with Garnham
claiming £27,549.62. He later received 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 brand new company’s name got here from the Bow River, which
runs via Calgary, and the River Leven, which runs near Kennedy’s
house in Dumbarton.
A 12 months later, Garnham was stripped of his share options. He had employed a
forensic accountant, John Papi, to look into his claims. At a board meeting
on 13 November, minutes show it was resolved that Cantrust would have the
choices cancelled from 5pm two days later unless there was “written
confirmation that they [Cantrust] accept that the forfeiture of their EurOil
shareholding (190 nil paid shares) was achieved correctly and in accordance with
the articles of EurOil”.
Tabetando did not agree to the cancellation of the choices. In a note to the
board, Tabetando said: “I have a strong moral obligation to object to
the cancellation of the Certificate of Share Options.”
A Bowleven spokesman points out that Garnham didn’t problem the
cancellation. Garnham says that by this stage, he was solely taken with
recovering the original shareholding.
Since then, Garnham has remained vocal, taking, and failing in, a court motion
In a further blow, Papi issued a deposition to the court docket backing the board’s
model of occasions. Papi says: “I feel extremely sorry for Peter. He’s
labored laborious pursuing the case, however it’s on the fallacious premise. It’s a
Cantrust matter, not a Peter Garnham subject.”
Garnham counters that he is the representative of Cantrust. It’s also true
that he is authorised by the trustees to act on this matter.
His British solicitors contacted Bowleven for info in 2003, by and
large getting short shrift. Simply 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 would possibly have the ability to help”.
Most of the main characters have left Bowleven, even if they retain a
stakeholding. Kennedy, for instance, resigned after falling out with other
members of the board, while Heneaghan left in December 2006. Heneaghan was
involved in an enormous bust-up with Philip Rhind, a South African who was
chief govt 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 passed to the Bowleven board. Greater 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 100 per cent owned
subsidiary of Bowleven. A senior tribal chief, Tabetando’s phrases carry
weight in Cameroon, and he is patron of the Cameroon Association of English
Speaking Journalists. Lironi’s golf handicap has slipped to five, whereas
Vandergrift, who declined to remark for this text, lives in Calgary.
Bowleven is essentially within the arms of a very completely different group of people. The
present chief executive, Kevin Hart, admitted earlier this 12 months that the
company “was in need of resuscitation” when he took over in 2006.
Garnham continues to work on what he alleges was an unfair loss of his shares.
Kennedy, who remains in his beloved Dumbarton, now openly backs him: “Peter
deserves compensation for being deprived of his shares.”
The Bowleven spokesman says: “The  share name was validly made. The
point is that the shares were not paid up and that place was accepted at
the time by all the shareholders, together with Cantrust.”
However Garnham is determined to battle on. He has more letters, emails and
allegations to hearth off. Garnham is still round, able to cause bother.
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