QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| Enterprise Plus Limited
|- and -
|Dr Bernard Wagenmann
Hearing dates : 8-11 July 2003
Crown Copyright ©
Mr Justice Eady :
"3.1 PM said that he was prepared in principle to change EPL's market orientation, because, if TPG's connections were as solid and its access to key decision makers in Pakistan and the Middle East as privileged as he had been given to understand, this would surely lead to TPG being awarded some 'big ticket' privatisations to which EPL on its own had no access. Those privatisations would not only pay EPL's standard fee rates for professional services but also a success fee – and that made the business interesting for EPL. In its current business EPL did not have the clout to become involved in success-fee-earning assignments.
3.2 However, PM pointed out that, until the first mandate was obtained, the TPG initiative for speculative business, as against EPL's current certain business. He added that, if EPL was abandoning its certain business, he would need to be paid at least for the time he would spend helping TPG obtain business, especially marketing and proposal writing. He said he would forego other billings in the expectation of participating in success-fee-paying assignments.
4 BW asked about PM's fee rates, and PM replied that while they were not identical for all assignments, he would charge £1500 or the $ equivalent, which was cheap if compared to rates charged by London-based merchant banks.
5 BW said that he could not make a decision then and there, but that he understood PM's position. He suggested that we should all wait and see if the TPG connections in Pakistan were good enough to get TPG short-listed for big-ticket assignments. Then would be the time to discuss specifics. There could be no commitment to pay EPL until the first mandate was obtained".
"3.2 ...that he had stated to BW his condition for abandoning EPL's traditional work (which was EPL's only source of income) in favour of work with TPG, namely that he must get paid for time spent on writing the proposals. EPL would not charge for time other than that related to the preparation of, and follow-up work on, the proposals, and that he would stop charging TPG for time in that context, as soon as the first mandate was obtained.
3.3 SR said that he had discussed the matter with BW and that BW had agreed that PM would get paid for his work related to the proposals".
"When the meeting broke up, I said to BW that SR had told me that he had agreed that I would be paid for my time spent on the proposals, but that I would like a further talk with him to discuss the future of TPG and EPL's association with it. He suggested lunch..."
"2.1 In essence, Enterprise Plus was giving up its traditional consultancy business in favour of its collaboration with UBK which, in turn was a leading partner with TPG.
2.2 PM pointed out that this represented a major financial risk as he was quitting EPL's established traditional business in favour of a less certain, but potentially a much more rewarding business on account of the large success fees one could reasonably expect to earn for successfully completing the large-ticket privatisation assignments to be pursued by TPG.
2.3 PM therefore reminded BW of his earlier verbal promise that, come what may, PM would be paid for the preparation and follow-up work in the context of the four Pakistan proposals and urged BW to make available the resources for a major marketing campaign on behalf of TPG (e.g., with the World Bank, the Asian Development Bank, specific governments to which individuals or corporate members of TPG had contacts) so that TPG was not 'putting all its eggs in the Pakistan basket'.
2.4 BW replied that he stood by his promise that PM would be paid for his work in the context of the Pakistan proposals, but that he could not at this point authorise or fund a marketing campaign. He said that when he left IBJ for UBK he had mentioned TPG but not succeeded in getting a budget for the active promotion of TPG's activities. A marketing budget would therefore have to be funded 'out of [BW's] own bonus'. He added that, as soon as TPG was generating revenue, that marketing campaign could be funded".