Black Country engineering giant Hampson Industries is facing a multi-million-pound bill after a judge slammed its “fraudulent” £3.1 million deal to sell off an ailing car parts firm.
Hampson Industries’ former chief executive kept quiet about a key customer being on the brink of deserting subsidiary Hampson Precision Automotive (HPA) before selling it to a group of investors led by Midland industrial heavyweight David Grove, it emerged in the High Court in London.
Mr Justice Field ruled ex-Hampson Industries chief executive Kim Ward, who stepped down from the firm last year, was behind a “fraudulent misrepresentation” in the £3.1 million deal.
And now in a very rare step, the judge has opened the way for the investors, trading as Erlson Precision Holdings, to hand back Lancashire-based HPA to Hampson Industries and claim their money back, with interest.
Erlson is also seeking damages for “wasted transaction costs”, the time and expense of continuing to run HPA and “for its loss of opportunity of making a different acquisition”, meaning Hampson’s final bill could spiral well beyond the original £3.1 million it made from the deal.
Responding to the decision, former Hill & Smith chairman David Grove said: “It is clear that the outcome fully vindicates our decision to take legal action against Hampson Industries.”
Describing Mr Ward’s behaviour as “truly extraordinary” for the chief executive of a publicly listed company, the judge said that Erlson Precision Holdings paid £3.1 million for HPA on the basis of “false and misleading” sale forecasts.
*See this week’s Birmingham Post for the full story