LONDON, March 20 (Reuters) - The then-interim chief executive of a British aerospace firm breached his duties by encouraging government intervention in a deal to increase Chinese investment in his
Gardner Aerospace Wins High Court Case Over CEO’s Role in Chinese Investment Deal
High Court Ruling on Gardner Aerospace and CEO’s Actions
Background of the Case
LONDON, March 20 (Reuters) - The then-interim chief executive of a British aerospace firm breached his duties by encouraging government intervention in a deal to increase Chinese investment in his company, London's High Court ruled on Friday.
Gardner Aerospace sued former interim CEO Antony Upton in 2023, alleging he lobbied politicians against a 2022 deal between Gardner's Chinese owner, Ligeance Aerospace Technology, and a Chinese state-owned investment fund.
Details of the Chinese Investment Deal
The debt-for-equity swap deal would have increased the fund's shareholding in Ligeance – and indirectly Gardner – from 14% to 32%, over the 25% threshold for notification to Britain's business ministry under national security laws.
Gardner said Upton contacted politicians and encouraged them to pressure the British government to "call in" the deal and impose onerous conditions, to try and keep his job under a different potential owner.
The company also alleged Upton misrepresented the level of uncertainty about the investment to Gardner's bankers at NatWest.
Upton’s Defense and Court Findings
Upton denied the allegations, giving evidence at a trial last year that he was motivated by national security concerns about Chinese ownership of the business and was acting in Gardner's interests.
But Judge Richard Smith ruled on Friday that Upton had breached his duties as a director of Gardner by taking steps that "he knew would undermine the transaction," including sending emails to lawmakers to oppose the deal.
The judge said in a written ruling that Upton had aimed to force Ligeance to divest Gardner to "further his own prospects of employment by Gardner under new ownership."
Next Steps and Reactions
A further trial will take place to determine whether Upton's breaches of duty as found by the judge had any impact on Gardner's business.
Gardner did not respond to a LinkedIn message requesting comment. Upton's law firm, Kennedys, declined to comment.
Reporting and Editing Credits
(Reporting by Sam TobinEditing by Rod Nickel)
