The High Court has ruled that a businessmen was unlawfully excluded from his second-hand car...
The High Court has ruled that a businessmen was unlawfully excluded from his second-hand car business by a private equity firm that had acquired a minority stake in it.
The businessman had founded the business in 1986 and was its CEO and, through a holding company he owned, its main shareholder. The private equity firm had acquired around 36 per cent of the business in April 2022, with an option to acquire a further 35 per cent in the future and so obtain majority control.
An investigation conducted in 2024 found that the businessman had made racist, sexist and abusive remarks to colleagues, and he was summarily dismissed by the firm for gross misconduct. He brought High Court proceedings, claiming that a deterioration in the trading climate for car dealerships had prompted the firm and some of his colleagues to devise a plan to remove him as CEO, so that the firm could gain effective control of the business without paying for that control by acquiring a majority stake.
The Court found that he had been properly dismissed for gross misconduct. However, it also concluded that there had been a 'pre-conceived and orchestrated plan' that worked backwards from the firm's aim of achieving permanent control of the business. The firm had not addressed his behaviour earlier in order to attempt to seize full control of the business at a later date, without exercising the option.
The Court found that he had been unlawfully excluded from the business, and that his holding company had suffered unfair prejudice.