A series of presentations showing proposed equity stakes for two academics sacked by Swansea University for gross misconduct in the £200m Life Sciences and Wellness Village project were widely circulated to potential private sector investors, an employment tribunal has heard.
Former dean of the university’s school of management, Prof Clement and colleague Steven Poole, were dismissed in 2019 for gross misconduct following a lengthy internal disciplinary process for not disclosing, as required under the ordinances of the university, proposed equity stakes in wellness village related firms. They deny any wrongdoing.
They both subsequently lost their appeals. While not connected to the wellness village project ownership structure or equity, former vice-chancellor of the university Prof Richard Davies, was also sacked for gross misconduct. He is not involved in the case for unfair dismissal brought by Prof Clement and Mr Poole, in which they are representing themselves.
The proposed wellness village project at Delta Lakes in Llanelli followed the signing of a collaboration agreement between the university, Carmarthenshire County Council and private healthcare firm Sterling Health - which was planning to be the project’s private sector development partner. The abandoned project, which has been succeeded with a new and completely separate wellness project - Pentre Awel - was seeking £40m in funding from the City Deal for the Swansea Bay City Region.
Prof Clement has claimed that any equity and board membership charts provided by chief executive of Sterling Health, Franz Dickmann, were effectively unrealistic and future company structures would needed to have been created - subject to due diligence and funding.
However, QC acting for Swansea University, James Laddie, said in the tribunal’s 13,000 page bundle there was not a single document where those involved in the project had asked Mr Dickmann not to show ownership structures in presentations to third parties, so it could not be passed off as a “figment of his imagination.”
He told the tribunal in Cardiff that if the information given to potential investors, for which discussions were held with both HSBC and Lloyds, was knowingly inaccurate, it would be tantamount to fraud.
Cross-examining Prof Clement, Mr Laddie, said: “Were these presentations shown to third parties to attract promises of investment or even indications?
Prof Clement said: “Indications, yes. Mr Laddie responded: “So, they were used to attract funding? Prof Clement said: “They were used to start a long protracted dialogue with potential investors.”
Mr Laddie then referred to comments made by Prof Clement during the disciplinary hearing that led to his dismissal from the university, in which his described Mr Dickmann's e-mails and presentations as “being reckless.”
Mr Laddie said: “You said (to the disciplinary panel) these powerpoint presentations would go everywhere. They could go to local authorities and I would be very robust in discussions that Franz you cannot do this. Your answer to Paula Carter (panel member) was we do not appear at Companies House, we did not take equity and none of that happened...but it needed the executive team and the board of directors to be defined to get a letter of intent from the banks.
“So, what you are saying there is that you are effectively excusing the circulation of these inaccurate presentations on the basis of that you needed them in order to get letters of intent from the bank on policy of funding. This was an excuse or a reason for Franz Dickmann using what you had earlier described as being reckless presentations...that in order to get letters of intent from banks, the board needed to be defined, in other words you needed to have names and faces.”
Prof Clement responded: “The letter of intent is a letter that says in principle, subject to due diligence, this bank might be interested in investing in this vision.”
Mr Laddie said: “My question is to obtain a letter of intent on the basis of false information would be fraud, wouldn’t it?
Prof Clement responded: “I am sure it would be, yes.” Mr Laddie said: “And you would not do that would you?” Prof Clement replied:” I would not commit fraud.”
Mr Laddie continued: “And because you wouldn’t commit fraud we can identify by a process of reverse logical deduction that the information in the presentations were not inaccurate, but were accurate. That is right isn’t it?
Prof Clement said: “I think the information in the diagrams were stating a vision and the sort of people involved. This was a process of engaging with funders and as far as I am aware no letter of intent was generated. The real conversation would start after the collaboration agreement was signed.”
Mr Laddie said that Prof Clement had already stated to the tribunal that the wellness village project had attracted “great companies." He said: “You had already spoken to Siemens and HSBC and Lloyds and they were on-board weren’t they?
Prof Clement said: “I don’t know what on-board means. Mr Laddie said:” It means they were listed as being on-board on the presentations.”
Prof Clement said: “They were engaged in early stage conversations about the potential of investing in the project after UK and Welsh governments (City Deal funders) had concluded their due diligence.”
Referring to Pro Clement’s interview with Sen Gupta QC, who conducted the independent investigation following his suspension at Swansea University, Mr Laddie said the dismissed academic has described Mr Dickmann as being “ out there trying to finalise the finances.”
He added: “So, he was talking to the banks, the financial houses, the venture capitalists and investor community and they all asked the same question. What is your board and you will not secure investment without defining your board because they are the people we are investing in.”
The QC said that Prof Clement had identified that Dickmann’s poor health had become evident by mid 2017.
Mr Laddie then asked: “If documents that do not make commercial sense, and may not have the consent of some of people featured in them, why do you continue working with him (Dickmann)?
Mr Clement said: “I think Mr Laddie that is a very good question. Mr Dickmann had been, as it were, the leader of the consortium, but everyone understood that he would not be delivering this extraordinary vision. We were paying him the respect he deserved and dealing with him with dignity, but we all understood that the private sector consortium was far more than Mr Dickmann.”
Mr Laddie then asked: “In which case we would expect to see records of discussions between you are your follow travellers in this consortium to the affect of one, expressing concerns about Mr Dickmann’s health, and two, resolving to continue to work with him as staying at the helm because the power of the collective could over come any deficiencies represented by Mr Dickmann.”
Prof Clement said there many discussions around a “presidential” role which would “pay respect” to Mr Dickmann.
Mr Laddie said: “But he was the person going out and attracting investment and funding. He was spearheading that and wasn’t some non-executive presidential character, he was very much at that stage carrying out an executive role. Was he not?
Do you agree with me in this bundle with more than 13,000 pages of evidence, we have not got a single contemporaneous document where you, are any of your follow travellers, can be seen to be expressing concerns over Mr Dickmann’s health?
Prof Clement said: “That is correct.“
Prof Clement said he intends to call former university vice-chancellor Prof Davies as a witness, but not former chief executive of Carmarthenshire Council Mark James.
The tribunal continues.
