September 1 • 2019 The Mail on Sunday^ FINANCIAL 95
A
N EXTRAORDINARY row
between an historic ship-
ping company and a former
executive over suspicious
share trades and claims
that staff paid for prosti-
tutes on expenses has triggered an
investigation by the City watchdog.
The Mail on Sunday can reveal that
the Financial Conduct Authority is
probing share sales made by Kevin
Gorman when he ran Cory Brothers,
a shipping logistics firm founded in
1842 which is owned by AIM-listed
Braemar Shipping Services.
Braemar sacked Gorman, who
headed up Cory, and was a member
of the company’s executive com-
mittee, after he failed to disclose he
had sold shares in the company.
Gorman, 56, hit back with allega-
tions of his own, including that
employees misused expenses to
pay for prostitutes, and engaged in
bribery and corruption.
The explosive allegations were
revealed in an employment tribu-
nal earlier this year in which a
judge threw out Gorman’s claim of
unfair dismissal.
He was sacked by Braemar after
he refused to step down over his
unauthorised share dealing.
Braemar called his allegations
that staff paid for prostitutes on
expenses and engaged in corrup-
tion and bribery ‘historic’, adding
that the judge deemed them ‘not
relevant to the case’. The judge also
said he found no evidence to back
up his claims.
The company, which declined to
comment on the FCA probe, said:
‘Any such allegations are taken
very seriously. Braemar is proud of
its reputation as a leading shipping
services business and has a full set
of company policies and proce-
dures for following when a formal
allegation is issued.’
Gorman is now running a new
rival firm called Sterling Shipping
Agencies, based at Birkenhead,
Merseyside. Sterling Shipping Serv-
ices, the parent company, is chaired
by Quentin Soanes, a co-founder of
Braemar. Soanes remains a top
shareholder in Braemar.
In the tribunal, Gorman argued
that he was not aware that his role
as a senior manager meant he had
to report share trades following
new rules brought in during 2016.
However, the judge said he found
his argument ‘unconvincing’.
Gorman sold shares in 2016 and
2017 for a total of more than
£70,000. He claimed this was to
fund holidays to Thailand, Spain
and skiing, his son’s 18th birthday
present, a replacement boiler and
to make up for £12,000 stolen from
his credit cards.
After being reminded by his
employer of share trading rules in
January 2017, Gorman told the
company he had sold shares the
week before, just days before a
profit warning that wiped around
20 per cent off the firm’s value. He
agreed to donate around £9,000 to
charity – the amount of profit he
made from the share sale.
However, Gorman failed to dis-
close that he had also sold shares a
few months earlier, in November
and August 2016. Stock market
rules state that executives need to
notify their employer before mak-
ing any share trades.
The FCA launched an inquiry into
the share trades in 2017, suspicious
of insider trading related to the
August share sale, which was car-
ried out just days before another
profit warning from Braemar,
which sent the share price down.
The FCA probe is ongoing.
The company itself is not under
investigation. After Gorman told
the company of his ‘unauthorised
trades’ in 2016, Braemar launched
an investigation and decided to sus-
pend Gorman on October 31, 2017,
and then sacked him. Gorman hadrejected an offer to resign, instead
emailing the board to say he ‘would
not go quietly’.
Gorman appealed against the
decision to fire him. In a letter after
his dismissal, he alleged miscon-
duct by other employees had gone
u n p u n i s h e d , i n c l u d i n g t h a t
expenses claims had been misused,
including to pay for prostitutes.H
E also accused Braemar’s
chief executive James
Kidwell, who stepped
down in July, of having
carried out similar trades
in 2004 on behalf of his
wife, which were investigated by
the Financial Services Authority,
the FCA’s precursor.
The FSA found no wrongdoing as
he sought permission to sell shares
and was given the clearance to do
so. The judge delivered his verdict
on the dispute at the end of Febru-ary and sent his decision to Gor-
man and Braemar in early March.
In its review, the company agreed
with Gorman that he did not dump the
shares with a view to making a profit.
Braemar, founded in 1972, employs
530 people. It is probably best known
for its shipbrokers who act as go-
betweens for shipowners and char-
terers to transport cargo or act as
intermediaries between buyers and
sellers of ships.
Cory Brothers was founded in
Cardiff in 1842 by Richard Cory as
a shipbroker and coal exporter. It
was sold to Braemar in 2003. Gor-
man became managing director of
Cory Brothers in 2007 when it
bought a firm he started, Gorman
Shipping, and became a member of
Braemar’s executive committee.
Sterling Shipping Agencies
unveiled Gorman’s arrival on its
website last December, referring
to the dispute with Braemar, notingit was to conclude shortly. It added:
‘We are therefore looking forward
to working with a well-rested and
energised Kevin whose reputation
and knowledge of the industry will
help us deliver a high quality serv-
ice to our clients as well as guiding
the development and continued
expansion of the company.’
In a statement, Gorman said: ‘I
believe the mistake I made pales
into insignificance with what hap-
pened within Braemar with certain
individuals who were not punished,
or even reprimanded for what were
more serious issues or behaviour.
‘I made a genuine mistake which
I brought to Braemar’s attention
when I realised it was not in accord-
ance with procedures, which both
the FCA and Braemar acknowl-
edged in their investigations, and I
think I have been unfairly punished
for my honesty.’
The FCA declined to comment.Shipping giant
in perfect storm
l Bosses sacked this executive
over his rogue share dealings
By Jamie Nimmo
Rivals circle beleaguered tech firm Telit Pizza Hut’s tasty 5-year plan
By Ben Harrington By Sarah Bridge
l He claims other staff paid
for prostitutes on expenses
l Now the City watchdog has
taken command of a probe...
IT ALMOST went bust a decade
ago, but Pizza Hut has slashed its
losses and put in place ambitious
plans to grow.
The 253-strong chain was bought
out by its management, led by
chief executive Jens Hofma and
backed by Pricoa Capital Group,
in April 2018 from previous
owners Rutland Partners.
Accounts just filed show that
sales dipped from £225 million to
£214 million in the year to
December 2, 2018, partly due to
the record warm weather, but pre-
tax losses shrunk from £7.5 millionto £6.2 million. Pizza Hut now has a
five-year growth plan that
includes rolling out its ‘fast casual’
concept, where diners order and
pay before their meal. It has also
been trialling pizza deliveries via
the app Just Eat and has been
expanding its unlimited lunchtime
buffet offer to weekends.
Pizza Hut chief financial offer
Andy Platt said it is ‘well placed
to respond to changing market
conditions’.A CHINESE tech firm with links
to the largest shareholder in
scandal-hit Telit Communications
is carrying out a multi-million
pound equity fundraising amid
speculation it may launch an offer
for the AIM-listed business.
Sunsea Telecommunications,
which is listed in China, aims to
raise about £170 million from
investors by issuing new shares.
Sunsea and Telit are ‘internet of
things’ companies – designing and
making devices allowing machines
to communicate with each other.
One of Sunsea’s largest
shareholders is Chinese
investment firm Run Liang Tai
Management, which has built
up a stake of more than 15 per
cent in Telit.
City sources said Sunsea may be
carrying out fundraising ahead of
submitting an offer for Telit.
Two years ago Telit stunned the
City of London when it announced
that its former chief executive
Oozi Cats was allegedly a fugitive
called Uzi Katz who was on therun from the US police. Cats was
allegedly wanted for his supposed
involvement in a 1990s property
scam. Telit is now run by Paolo
Dal Pino, formerly boss of Wind, a
mobile and broadband operator.
City sources said Sunsea may
face competition for Telit from
Sierra Wireless, a Canadian tech
firm. Sierra Wireless and Telit are
said to be discussing an all-share
merger that could see the
Canadian offer up to 230p a share.
Telit declined to comment.
Sunsea and Sierra Wireless failed
to return calls.UPHEAVAL:
Kevin Gorman
was fired after
refusing to quit