Former Jersey 'rich lister' pledges to donate money saved in court row

Monday 01 March 2021

A former Jersey ‘Rich List’ resident has claimed victory in a recent Royal Court battle - despite findings that he treated investors unfairly - and pledged to donate “every dollar” he saved by fighting his company’s former backers to a foundation aimed at helping youngsters “reach their potential."

Australian entrepreneur Graham Tuckwell’s announcements came after Jersey’s Royal Court ruled he should purchase the shares from a trio of private equity backers, minus a 20% discount to reflect their minority interests as shareholders.

The trio, which included seven plaintiffs, held a third of the stake in his Jersey-based business, ETFS Capital Limited, whose assets he sold in transactions totalling around $600m.

They had argued before Jersey’s Royal Court that the proceeds should have been shared, and that they had been prejudiced by the fact the business of the company had changed “beyond recognition” since the sale, which meant they no longer wished to be shareholders.

Pictured: The legal battle opposed Australian entrepreneur Graham Tuckwell, and a trio of private equity backers, who claimed they should have received a share of his $600m business sale, while he said he didn’t owe a penny.

Mr Tuckwell argued that all seven plaintiffs in the case knew of the risks of purchasing minority shares in a private company. He said he had offered to purchase their shares “at a fair value supported by independent expert evidence” and that they should not be able to claim any relief. 

During the weeks-long trial - which took place at Hotel Cristina due to the number of witnesses and need for physical distancing - the court also heard how Mr Tuckwell had muted individuals who asked questions of him during a 2019 board meeting, and removed independent directors who made it clear that they wanted all shareholders to be treated fairly.

The Plaintiffs also raised issues with Mr Tuckwell’s decision to move from Jersey to Australia in 2019, suggesting that it could lead the company to be found Australian tax resident and have adverse impacts on them - something Mr Tuckwell disputed.

In the end, the Court found Mr Tuckwell had pursued “a scheme designed to drive the plaintiffs out of the company at the lowest possible price”, which led to financial prejudice for the plaintiffs.

As well as finding he treated investors unfairly, the Royal Court judgment described Mr Tuckwell’s board meeting conduct as “grossly inappropriate” and his Australia move as “reckless”, although it agreed that investors hadn't suffered as a result.

But Mr Tuckwell has said that the overall result of the battle was a victory because he had argued a discount should apply to the value of minority shares at a private company. 

Pictured: Mr Tuckwell said he would make a donation to the foundation he established with his wife.

Welcoming the finding, he commented: “At the heart of this dispute was the principle that shareholdings that give no control over a company are not worth the same as shares that do give control of a company."

He continued: “We tried to negotiate with three large US investors many times and they refused to engage, and they instead launched legal action trying to claim 100% of the value,” he said in a statement.

“I am happy the Jersey court upheld our view and we are able to buy their shares back at an appropriate discount and a much reduced price, as I had always contended was right.”

Mr Tuckwell went on to pledge to donate “every dollar” he saved by fighting the court battle to the Graham and Louise Tuckwell Foundation - established in Australia by Mr Tuckwell and his wife in 2012 - to “help talented young people reach their potential and achieve their aspirations through the transformative impact of education."

Mr Tuckwell added: “...It will do a lot more good [there] than it would in the hands of private equity firms.”