Bosses at Berkeley Group, the phenomenally successful housebuilder, were accused by their own former finance director of repeatedly bribing a partner at a major estate agent, of corporate tax evasion and of unlawfully disclosing price sensitive information – allegations he made in an extraordinary lawsuit that he brought against the company.

The claims, which surfaced during two linked cases of unfair dismissal and breach of contract, were made by Nicolas Simpkin, who was Berkeley’s group finance director and served on the company’s board from 2009 until he was fired in 2014.

They were all vehemently denied by Berkeley, which hired a top QC to investigate the claims and who concluded they were unfounded.

Berkeley says that following the QC’s investigation, it and Simpkin reached a £9.5m out of court settlement, a deal mentioned briefly in the company’s latest annual report. It says the allegations were withdrawn as part of the deal. As the cases were settled, none of the allegations were ever tested and they remain unproven.

But an investigation by Finance Uncovered can now reveal the incendiary details of the lawsuit, which rocked the FTSE-100 company and in particular its powerful chairman, Tony Pidgley, one of Britain’s highest paid bosses who has pocketed a staggering £174m from the company over the past decade.

Finance Uncovered has obtained hundreds of pages of documents filed by each party at the High Court, and which are publicly available.

The allegations were introduced into the legal documents by Berkeley itself as part of its formal defence papers.

Among its denials were:

·  An accusation that the managing director, Rob Perrins, “deliberately and unlawfully provided quantities of non-public and price sensitive information to a shareholder in May 2014”.

·  That “around” £660,000 of Berkeley’s money were “intended to be used on fitting out” one of Pidgley’s luxury flats “on the pretence the flat was to be used as a show home”.

·  That Berkeley’s staff were “being pressurised to make false claims to recover VAT in relation to the property”.

·  That there had been “inappropriate payments by the Berkeley Group to the son of the chairman and companies connected with the son”.

·  And that a Berkeley company had wrongly withheld “critical commercial and financial information from a joint venture partner in effect to seek to defraud that joint venture partner”.

But perhaps the most serious accusation concerned alleged high level bribery as far back as 2004. According to Berkeley’s amended defence bundle from 2017, Simpkin had “alleged that he believed chairman Pidgley, now 71 (pictured, below), was consistently engaged in bribing one of the partners in a major estate agency with whom Berkeley Group regularly dealt in relation to land acquisitions”.

This alleged bribery was said by Simpkin, 49, to have included showering the partner with “expensive gifts”, ordering the refurbishment of his home “without…being properly charged”, and “procuring the Berkeley Group make the individual a loan” that was later written off in 2007.

Simpkin claimed he had been “staggered” when in 2011 he was told the loan had been written off, the papers state.

Rebutted accusations

But over dozens of detailed pages in the legal documents, Berkeley rebutted the accusations and maintained that Simpkin only made the allegations after he had been dismissed.

Simpkin, who was earning a £330,000 a year salary but who had pocketed a £1.2m package in the previous 12 months, was fired from Berkeley in September 2014.

At the time, the company gave no other details but it later emerged in legal papers that its board claimed he had been misusing Berkeley’s expenses accounts to entertain his PA at the Royal Albert Hall. The company also alleged poor performance.

As a result of his dismissal, Simpkin was deprived of his share in a bonus scheme set up for Berkeley executives which would have been worth tens of millions of pounds to him.

Within weeks of his sacking, he began to strike back, filing a claim at the Employment Tribunal in December 2014. In it he claimed the real reason for his dismissal was because he was a whistleblower.

Alleged corrupt practices

He said he had upset senior colleagues after raising concerns with the managing director and group solicitor about alleged corrupt practices at Berkeley.

As that claim went through various legal processes, Simpkin upped the ante and in October 2015, he began concurrent proceedings at the High Court claiming breach of contract over the way his dismissal had been handled. Simpkin alleged he had not invited to defend the allegations made against him before being told of the decision to fire him.

It was in its defence to this High Court action that Berkeley revealed the details of Simpkin’s allegations against Pidgley and the company.

According to the papers, Berkeley Homes denied any of the allegations were true. It also denied that Simpkin raised any of the allegations with the group solicitor, the board or independent directors of the company, including with Sir John Armit, the mastermind of the London Olympics building project and who was the non-executive chairman of Berkeley when Simpkin was fired.

Berkeley went further. As part of its defence, it said were any of the allegations true, Simpkin should have taken action, and given the senior role he had at the company, he had the authority to take action.

Berkeley claimed that Simpkin took no action whatsoever in relation to any of the alleged incidents until after his dismissal in 2014 despite having held such concerns since at least 2006.

The company maintained in its court papers that Simpkin’s failure to have raised the matters would have been inconsistent with his duties as a director, an employee, and also his professional responsibilities. It added that that many of his allegations were inconsistent with the representations that he made to Berkeley’s auditors during his employment.

Professional duties

The company also claimed had Simpkin genuinely believed the matters which he subsequently alleged, he himself would have breached his professional duties and would have would have been complicit in any criminal activity were it to have happened.

But in the end, neither the High Court Case nor the Employment Tribunal went to court after Berkeley and Simpkin reached a settlement inn July 2017.

According to the company’s latest annual report, published in August 2018, the settlement was for £9.5m, of which £4.95m went directly to Simpkin, while £4.5m covered his legal costs.

In a statement to Finance Uncovered, a Berkeley Group spokeswoman said: “There was a thorough investigation by a QC and a senior lawyer from a major law firm which concluded these allegations were unfounded, following which Mr Simpkin withdrew his allegations and settled all his claims.”

Mr Simpkin said: “The counter allegations made by Berkeley against me in the High Court documents are unfounded, untested, plainly vexatious and risible…. Following the payment of damages the court proceedings were withdrawn.

“I trust you will respect that I am bound by confidentiality terms which prevent me fro making any comment on the other issues you raise.”

Written by: by Nick Mathiason, George Turner and Ted Jeory

Posted by Nick Mathiason

Nick Mathiason has been a business and finance journalist for close to 30 years and has broken a sizeable number of impactful stories that have had international prominence. Subjects investigated include developing countries access to medicine, vulture funds, labour issues and the growth of private equity. One of the first UK journalists to report on industrial scale tax avoidance, in 2012 Nick founded and today co-directs Finance Uncovered. Formerly a business correspondent at The Observer, The Guardian, the Bureau of Investigative Journalism and the Big Issue magazine for the homeless, Nick has been shortlisted for major international journalism prizes on numerous occasions. PGP Public Key Fingerprint: 57DE8CD5