UBS hit by ex-bankers £16m writ
A FORMER executive at investment bank UBS is claiming more than £16 million in a High Court battle over his alleged sacking earlier this year.
The claim is thought to be one of the biggest of its kind to come before a British court.
Ian Siddall, who worked for the venture capital arm UBS Capital, is claiming for what is known as ' continuing interest' - the arrangement under which banks allow senior venture capital staff to receive a share of the profits from their deals, even if they have long since left the bank.
This arrangement is needed because venture capital investments sometimes take many years to yield results. But payment is made only if the bank concerned designates the former executive as a 'good leaver'. A 'bad leaver' will see his or her payout severely reduced - to nothing in the case of Siddall.
Decisions about who is a good or bad leaver are taken behind closed doors and the criteria are shrouded in secrecy. One venture capital insider said such decisions were made largely on a subjective case-bycase basis.
Siddall, who worked for UBS from 1988 to May this year, claims that he was initially told he would be treated as a good leaver, and only later that he was considered a bad leaver.
In his time at UBS Capital, Siddall, who is married and lives close to the Thames in Richmond, Surrey, was London-based head of the firm's operations in Belgium, the Netherlands and Luxembourg. He served as a director of a number of companies in which UBS Capital held stakes, including bag-maker Kipling and the shoe repair chain Minit.
According to the writ, Siddall was by January this year devoting more and more time to the management of Minit and agreed with UBS to move full-time to Minit from April 1 and to leave UBS entirely on October 1.
He claims UBS pledged he would be designated a good leaver.
But, he says, on April 17, UBS, in its role as shareholder, demanded his resignation from Minit's board. He resisted at first but, threatened with an extraordinary general meeting of all shareholders, agreed to step down.
Siddall also claims that on May 2 he was sacked from UBS and that in July the bank told him he was being treated as a bad leaver because of 'a breakdown in trust and confidence'.
Siddall is denying what he says are UBS's allegations against him of serious mismanagement.
These include his alleged failure to assume responsibility for Minit and to provide accurate financial data, his alleged failure to make clear to UBS the deteriorating financial position at Minit and his alleged failure to provide a detailed restructuring plan for Minit. UBS said: 'The bank is aware of this claim and will be vigorously defending it.'
Should it come to court, the case may shed new light on the 'continuing interest' system. Among Siddall's arguments is the claim that the 'bad leaver' penalty is not enforceable.
Siddall was unavailable for comment.
