Hut Group ‘put profits ahead of safety at US plant’
The Hut Group (THG) faces a
fresh headache as four
former employees in America
accuse the online beauty and
nutrition retailer of firing
them for trying to blow the
whistle on health and safety
breaches.
Nick Bodinet, Donald
McEntire, Joseph McGaughey
and Jason Young worked atTHG’s manufacturing and
distribution facility in
Shepherdsville, Kentucky,
which opened in 2016. They
are suing THG for breach of
contract and wrongful
dismissal, jointly claiming
$30 million (£22 million).
The claim was filed in July
2020, two months before THG
floated on the stock market
for £5.4 billion. The shares
initially shot up but havecrashed in recent months as
investors have been spooked
by governance concerns
about the powerful role of
founder Matt Moulding, and
by growth prospects for THG’s
Ingenuity e-commerce
engine. Last weekend,
Moulding told GQ magazine
that being listed had “just
sucked from start to finish”.
The US case, which THG is
defending, claims that it putprofits before worker safety
in the early years of running
the Kentucky site, which
processes cosmetics and
protein powders. It claims
Moulding’s tech empire
ignored warnings that
“hazardous materials,
including aerosols, fingernail
paint, lithium batteries [and]
various consumer
commodities ... were being
stored illegally”.It alleges that when Young,
who was vice-president of US
operations, asked THG to
build a safe storage space, UK
executives “put him off and
complained about the
expense of complying with
every ‘little US regulation’ ”.
The claim says that when
Young arranged for staff to
wear masks as a “stop-gap
measure” for dealing with
potentially lethal chemicals,THG “chastised him for
incurring the costs of the
masks”. McGaughey, who was
a safety manager, is said to
have feared that poor storage
of flammable materials
exposed “the entire
workforce ... to life and limb-
threatening conditions”.
The four were fired in- THG tried to have the
claim struck out on the basis
that it was not served
properly. A judge rejected
that motion. THG is now
defending the case.
Among those expected to
give evidence if it goes to trial
are Moulding and finance
director John Gallemore.
THG’s defence, filed in May,
says it acted in good faith at
all times and did not retaliate
against the four for reporting
any violations of US laws.
THG said: “This is afrivolous case taken by four
disgruntled ex-employees
who were fired three years
ago after a site audit which
noted breaches of their
duties ... THG is proud of its
commitment to a safe and
healthy workplace.”
Shares in THG closed at
191p on Friday, valuing it at
£2.4 billion.Blowing the roof off, page 7Oliver ShahBUSINESS
&MONEY
November 14, 2021 · thesundaytimes.co.uk/business thesundaytimes.co.uk/money
BUSINESS
&MONEY
BID TALK
FOR BOOTS
PAGE 4
BID TA
FORR BO
PAGE 4
LONDON
TECH
DARLINGS
SUFFER A
RUDE
AWAKENING
PAGE 7 ‘I SPENT £900,
ON DRUGS AND
IT COST ME
MY HOME’
DARREN DAY,
MONEY, PAGE 16
ARM takeover faces
security investigation
Ministers are poised to pull
the trigger on a full-blown
investigation into the sale of
ARM, Britain’s biggest
technology company, in a
move that threatens to
scupper the controversial
$40 billion (£30 billion) deal.
Nadine Dorries, digital and
culture secretary, will this
week order a “phase 2” probe
into US chip giant Nvidia’s
acquisition of the Cambridge-
based semiconductor design
company from Japan’s
SoftBank. She will instruct
the competition watchdog to
carry out an in-depth inquiry
into antitrust concerns, as
well as scrutinise national
security fears raised by the
takeover, which was agreed in
September 2020.
The Competition &
Markets Authority said it had
“serious competition
concerns” after delivering its
findings from the “phase 1”
probe in July to Dorries’
predecessor, Oliver Dowden.
Dorries must accept the
CMA’s decision on
competition, but will have thefinal say on national security.
The launch of a phase 2
inquiry on both counts,
expected to be announced on
Tuesday, will be a big blow to
Nvidia, which has argued that
ARM will wither unless it
receives the huge investment
it is willing to provide. The
deal now faces lengthy delays
as regulators in the EU and
China also scrutinise it.
ARM’s chip design
technology is used to power
most of the world’s
computing devices, such as
smartphones, smart TVs and
cars connected to the
internet. Customers such as
Microsoft and Google fear
Nvidia will restrict the supply
of ARM’s processor
technology and could raise
prices. Nvidia denies this.
The government declined
to comment. Nvidia said: “We
will continue to work with the
UK government to resolve its
concerns. A phase 2 process
would enable us to
demonstrate ... how the
transaction will help
accelerate ARM.”Oliver Shah, page 9Jamie NimmoDISNEY SUFFERS AS THE LION SLEEPS
The pandemic-enforced
closure of the West End
production of The Lion King
ate into Disney’s UK profits
last year, writes Robert Watts.
The latest accounts show
profits at Walt Disney Ltd fell
70 per cent to £140.6 million
on lower turnover of
£2.2 billion in the year to the
end of September 2020.
Covid hit the entertainment
giant on several fronts,
delaying film production,wiping out cinema takings
and leading to the 16-month
closure of The Lion King at the
Lyceum Theatre.
Disney also had to shut its
toy shops in the lockdowns,
and earlier this year it decided
to permanently close stores in
Sunderland, Southampton
and at the Westfield shopping
centre in east London.
The successful launch of
the Disney+ streaming service
in March 2020 did little toease the many pressures on
the company’s finances.
To weather the pandemic, it
cut management pay,
suspended capital projects
and furloughed staff.
A report with the accounts
said: “The company is
working with its parent
undertaking to ensure it has
sufficient liquidity available
for at least the next 12 months
... to ensure it is able to meet
its liabilities as they fall due.”The West End production of The Lion King temporarily closed for 16 months during the pandemicEx-Barclays boss calls in Brexit lawyer as
watchdog queries links to Jeffrey Epstein
comes amid revelations about a cache of
emails between Epstein and Staley in
which the unexplained term “snow
white” is used. Pannick— a £20,000-a-day
superstar silk — has acted for many busi-
ness executives, celebrities and even roy-
alty during his career. The terms of his
appointment are not clear but his pres-
ence will intensify speculation that Staley
is ready to take his case to the highest lev-
els of the judicial system.
Staley is already using the respected
lawyer Kathleen Harris, the head of the
London office of US law firm Arnold &
Porter. She did not respond to a request
for comment on the role of Pannick, who
also declined to comment.
Staley’s spokesman also refused to
comment.
Earlier this week, the Financial Times
reported on 1,200 email exchanges
between Staley and Epstein from 2008 to
2012, when Staley was at JP Morgan.
The emails were provided to American
regulators by the US bank, which said
many of them were discussions about
news articles or meetings for drinks.
According to the FT, the regulators are
yet to draw conclusions over the phrase
“snow white”, which was written in a
short exchange between the two men
referring to a conversation they had pre-
viously had in person.
Harris told the paper: “We wish to
make it expressly clear that our client had
no involvement in any of the alleged
crimes committed by Mr Epstein, and
code words were never used by Mr StaleyCruddas explores
spread-betting split
Tory peer Lord (Peter)
Cruddas is considering a
break-up of his £755 million
financial spread-betting firm
CMC Markets, in a move that
would create two separately
listed companies.
According to Sky News,
CMC has begun work on a
potential split to create a
leveraged trading business to
house its spread-betting
operations, and another for
its technology and investment
products platforms.CMC was established in
1989 as a foreign exchange
broker and now specialises in
spread bets and contracts for
difference — complex
derivatives that allow traders
to make leveraged bets on the
direction of markets.
Cruddas was one of the
backers of Vote Leave, and
was given a peerage last year
shortly before he donated
£500,000 to the Conservative
Party. He has a 62.5 per cent
stake in CMC, which closed at
259p a share last week.
CMC declined to comment.Sabah MeddingsContinued on page 2 →Staley taps
top QC for
fightback
Jes Staley has lined up one of Britain’s top
QCs, Lord (David) Pannick, as he pre-
pares to do battle with Britain’s financial
regulators over his exit from Barclays in a
dispute about the description of his rela-
tionship with the late Jeffrey Epstein.
Staley, 64, caused shockwaves when he
quit as boss of Barclays on November 1
after the bank received the preliminary
conclusions of a 20-month investigation
by the watchdogs into the “characterisa-
tion” of his relationship with Epstein, who
died in 2019 while awaiting trial on allega-
tions he was trafficking under-age girls.
The American banker, who had been
running Barclays since 2015, resigned so
he could contest the findings, which are
yet to be made public.
The bank said he was leaving to fight
the findings of the inquiry in to his rela-
tionship with Epstein and “the subse-
quent description of that relationship in
Barclays’ response” to the Financial Con-
duct Authority (FCA), one of the investi-
gating regulators.
Staley’s relationship with Epstein has
been described as a professional one —
dating back to when he was head of pri-
vate banking at US bank JP Morgan. UK
regulators have been examining whether
Staley had mischaracterised the relation-
ship. Barclays has made it clear that the
investigation by the FCA and the Pruden-
tial Regulation Authority did not find that
Staley “saw or was aware of any of Mr
Epstein’s alleged crimes”.
The appointment of Pannick, 65,Jill Treanor