Gallagher vs Ardonagh: Chilton’s Capsicum Re ‘conflict of interest’ influenced broker’s exit, court hears

Former Gallagher UK chief executive Grahame Chilton’s stake in Capsicum Re was a major factor in a leading broker’s desire to leave the group, a court heard yesterday.

The comments were made by Ardonagh barrister David Craig QC in reference to Nawaf Hasan’s July 2017 exit from Gallagher-owned Alesco, in the ongoing staff poaching court battle between the two heavyweight broking groups.

During the questioning of former Alesco boss Simon Matson, now Gallagher UK chief executive, over the reasons why Hasan decided to leave Gallagher, the court was told by Craig that Hasan felt there was a frustrating conflict of interest.

“Mr Hasan thought there was a conflict,” Craig said. “Mr Hasan felt pressured to move business to Capsicum Re even when it was not in the clients best interest.”

Matson defended the group and said the conflict of interest had always been managed well. But he did accept brokers could end up “fishing in the same pond”.

Craig referred the court to an email where the reasons for Hasan’s exit were given as “a mix of pride, ego and Capsicum Re”. 

Respect

The reasoning behind his departure was also said to include not being asked to meet Gallagher’s global group chief executives Tom and Pat Gallagher - a reason Matson described as “ludicrous”.

Craig had suggested to the court that Hasan and colleague Gerard Maginn, who also left Gallagher for Ardonagh-owned Price Forbes shortly after Hasan, were not shown respect by Alesco and were treated as outsiders.

But Matson disputed this: “We have an awards night in Vegas and I put him forward and wrote the words for him, so that just wasn’t the case.”

Matson said that while the company couldn’t fulfil promises made to Hasan when he joined the company, he did all he could to keep him at the firm - including offering him the job of head of downstream - to no avail.

“It was what he wanted, and then it wasn’t what he wanted”, Matson said referring to the job offer. “I felt I had done everything to facilitate him.” 

He confirmed that Hasan and Maginn had been friends and after Hasan’s resignation, Maginn’s exit was also expected.

“It was a huge drain trying to work out what Hasan wanted,” Matson said. “They were viewed as highly disruptive people and there was mistrust around them.”

He told the court that if the pair did feel isolated it was of their own making.

“They both had praise from me. Looking back I can’t help but feel there was external forces pushing them out”, Matson told the court.

Matson will answer further questions from barristers later today as the trial continues.