Bosses at the housebuilding firm Berkeley Group were accused of engaging in years of bribery with a partner at a major estate agent, according to papers filed in a pair of lawsuits brought against Berkeley by a former finance director in 2014 and 2015.
The claim was among numerous “whistleblowing” allegations by Nicolas Simpkin, 49, who served on the board of the £2.7bn turnover company from 2009 until he was fired in 2014.
Berkeley paid £9.5m to Simpkin in an out-of-court settlement, according to the company’s annual report published in August. It also stated that the allegations had been withdrawn as part of the deal. On Wednesday, Berkeley said the settlement had been reached after it had “thoroughly” investigated the allegations and found them to be “unfounded”.
After an acrimonious dismissal in September 2014, Simpkin filed an unfair dismissal case the following December and then a 2015 breach of contract case in the high court.
According to court documents in the second case, Simpkin had made a series of whistleblowing allegations in his 2014 case, all of which were denied by Berkeley. The company argued that Simpkin had failed to raise and act on his claims. As the cases were settled, none of the allegations were ever tested and they remain unproven.
High court papers obtained by the Guardian and the investigative website Finance Uncovered show that Simpkin accused Berkeley’s chairman, Tony Pidgley, who earned £174m from the company over the previous decade, of being “consistently engaged in bribing one of the partners in a major estate agency with whom Berkeley Group regularly dealt in relation to land acquisitions” between 2005 and 2010.
The documents further detail how Simpkin claimed that “this bribery included” Pidgley “making expensive gifts” to the estate agency partner; extending a Berkeley loan to the same partner, which the housebuilder’s “managing director [Rob Perrins] later … instructed the then financial controller to write off”; and allowing Berkeley to carry out work at the estate agency partner’s property “without the partner being properly charged”.
According to the court papers Simpkin said he had been “staggered” when he was told in 2011 that the loan had been written off four years earlier.
While Simpkin withdrew his legal cases as part of the out-of-court settlement, the substance of the allegations remains in court filings because Berkeley Group used a 113-page high court defence document to dismiss its former director’s claims.
In those papers, Berkeley said the facts underpinning many of his allegations were wrong, as it also denied his claims that between 2005 and 2014:
• Pidgley benefitted from “around” £660,000 of Berkeley Group’s money that had been “intended to be used on fitting out” one of the chairman’s luxury London flats “on the pretence the flat was to be used as a show home”.
• Berkeley’s staff were “pressurised to make false claims to recover VAT in relation to [Pidgley’s] property”.
• There had been “inappropriate payments by the Berkeley Group” to Pidgley’s son.
• Perrins had “deliberately and unlawfully provided quantities of non-public and price sensitive information to a shareholder in May 2014”.
In its annual report published in August, Berkeley Group said: “During the period the company settled the proceedings brought by Mr Nicolas Simpkin, its former finance director, in the employment tribunal and high court. Under the settlement Berkeley made a payment of £4.95m to Mr Simpkin and a further payment of £4.55m towards his legal fees and disbursements.”
Simpkin, who was earning a base salary of £330,000 a year but who had pocketed a £1.2m package in the previous 12 months, was sacked in September 2014.
The court filings show that Berkeley’s board claimed he had been performing poorly in his role and had lost the confidence of senior colleagues.
If Simpkin had succeeded in his legal claims he would have been entitled to his share in a bonus scheme set up for Berkeley executives, which would have been worth many millions of pounds to him.
As well as denying all the whistleblowing claims, Berkeley said Simpkin had failed to raise any of the allegations with the group solicitor, the board or independent directors of the company.
The company added that if any of the allegations were true, Simpkin should and could have taken action, adding he would have been complicit in any criminal activity if his claims were accurate.
A Berkeley spokeswoman said the settlement dated back 18 months, adding: “There was a thorough and extensive 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.”
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 am bound by confidentiality terms which prevent me from making any comment on the other issues you raise.”