AssetCo, owner of London’s fire engines, is preparing to fight back against its former chief executive who called for the company to be wound up, by claiming he was dismissed in the wake of “serious breaches of contract and duties”.
The company is expected to make the allegations against John Shannon, co-founder, in a statement to the stock market as early as Thursday, people familiar with the matter said.
Contacted by the Financial Times on Wednesday, Mr Shannon – who has been replaced on an interim basis by Tudor Davies, executive chairman – declined to comment other than to say he “wished the company well”.
AssetCo also declined to comment.
AssetCo, which has a 20-year private finance initiative contract to supply engines and other equipment to the London Fire Brigade, came close to collapse earlier this year as creditors demanded the company be wound up.
Although he holds a 30 per cent stake, Mr Shannon supported the demands as he believed AssetCo owed him various payments following his departure as chief executive in March.
People close to AssetCo said it disputed Mr Shannon’s claims as the company had its own multimillion-pound counterclaims against him “arising out of breaches of his fiduciary duties”.
Mr Shannon stepped aside from the board after other directors obtained an injunction that forced him to back an emergency fundraising.
He went on to support demands from law firm Nabarro, which had sought to recover unpaid fees, to shut down the company. AssetCo had already settled a separate claim from HM Revenue & Customs.
Nabarro has since been paid after the company raised £16m from shareholders including Gartmore, JO Hambro and Utilico Investments. The winding-up petition was withdrawn at a court hearing two weeks ago.
The Fire Brigades Union has already warned that AssetCo “looks like a company in meltdown” and that “privatisation of an essential part of an emergency service has been a disaster”.
Spun out of British Gas a decade ago, AssetCo reversed on to the stock market in 2007 and went on to reach an arrangement with London to provide back-up crew in the event of staff shortages.
But the company lost 80 per cent of its market capitalisation between February and March after it was forced to turn to shareholders for cash in an attempt to help deal with short-term funding problems.
Also on Wednesday, Verdes Management, the turnround specialist, which was calling for boardroom changes at the company, said it was no longer interested in pursuing the matter.
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