Phones 4u​ founder accuses former adviser of fiddling expenses

The Phones 4u founder, John Caudwell, is embroiled in a high court battle with a former financial adviser who his company claims fiddled her expenses.

Nathalie Dauriac, a former Coutts banker, claims she was wrongly dismissed in 2014 from Signia Wealth, the financial management company that she co-founded with Caudwell, and should have received at least £12m for her stake in the business.

Both sides dispute the allegations against them.

Lawyers for Signia Wealth said on Tuesday that Dauriac had altered references to more than £33,000 of expenses claims for items including a trip to Málaga to celebrate a friend’s birthday, gifts for her daughter and former husband and photographs at a ski resort where she had been on holiday with Caudwell.

Monica Carss-Frisk QC, for Signia, told the court Dauriac had claimed the expenses to fund “a lavish lifestyle” and because she felt she was underpaid for her role and upset not to have been paid a bonus for several years.

Carss-Frisk said Dauriac’s approach to her expenses claims was “brazen and fell seriously short of the relevant standards”.

Marcus Smith, the judge overseeing the case, was told Dauriac had asked junior colleagues to alter the record of her expenses claims to “conceal or change the nature of the improperly claimed expenses”.

Signia’s lawyers said the company had begun investigating Dauriac’s expenses after being alerted by another employee.

An investigation into Dauriac’s expenses began in late 2014, she was suspended in December that year and her employment ended in January 2015.

Having been confronted with the findings of the internal investigation, Dauriac wrote to Caudwell with a “full apology” and offering to repay £26,000 of expenses, most of which she said were mistakes.

Dauriac says Caudwell acted against her “as a means of punishment for her raising an allegation that Caudwell used false invoices to avoid VAT”.

Signia’s lawyer said there was “absolutely nothing in that allegation” and that it had been contrived to try to embarrass Caudwell.

Thomas Plewman QC, Dauriac’s lawyer, told the court that there was evidence that Caudwell “likes to set bonuses high and then find a way to fire employees”.

He said Dauriac’s expenses were not funding a lavish lifestyle but “legitimate business expenditure”. He pointed out that 70% of the disputed expenses related to Caudwell, mostly on travel to meet him in various parts of the world.

He suggested that a trip to St Barts in the Caribbean was not a holiday but a place where “serious negotiations” about loans and other Caudwell business dealings were held with the billionaire.

“This is not a hardware store, it’s a relationship business,” he said, explaining that Dauriac’s job was to form and maintain connections with wealthy clients and what might expected to be a “bright line between business and personal” was “simply not there”.

“She leveraged herself and her family and everything they lived in pursuit of relationships and connections and clients,” he said.

He said Signia’s probe into Dauriac’s expenses was not a “dispassionate inquiry” but a conspiracy led by the “puppet master” Caudwell who had the told Signia director David Canfield “we have to act”.

Plewman said Dauriac had been presented with “draft written confession” which was “not negotiable” and it was suggested she sign it, seek psychiatric help and invest £2.5m more in the company if she wanted the business to continue.

Dauriac left the business on disputed terms and her 49% stake was bought out for a nominal £2 fee. Plewman said that far from being worthless, Dauriac’s stake was worth at least £12m and Signia was a “readily saleable business”.

The trial continues.