Big Technologies chief increases stake amid court battle

The chief executive of a listed offender-tagging group which is at the centre of a high court battle over its alleged dealings with a network of “opaque shell companies” has increased her stake in the business following the sudden departure of its chairman.

Sara Murray, founder of Big Technologies, has seen her holding grow to about 27 per cent after she and other directors exercised options agreed when the business floated at a £577 million valuation in July 2021.

Big Technologies, an Aim-listed provider of electronic monitoring devices used by the probation service and in social care, emerged from a company called Buddi that Murray founded in 2005. Big and Buddi are being sued in the High Court by five investors, including a former Buddi board member and a senior executive of one of Big’s largest shareholders.

The claimants allege that a group of obscure offshore companies have undisclosed connections to Murray and were used to unlawfully push minority shareholders out of Buddi at a much lower price than Big achieved when it floated.

Big has denied the claims, saying they do not have “legal and factual merit” and that Murray, a former government adviser who is also known as the founder of Confused.com, “never had any direct or indirect interest in the disputed companies”.

“She has never controlled them, directly or indirectly, and has never had any role in their decision making,” it has said in court filings.

Simon Collins, a former chairman of KPMG, resigned with immediate effect as chairman of Big last month, with Alexander Brennan, a board member, taking on the role on an interim basis. No explanation has been given for the sudden departure. He declined to comment.

Collins had declined to answer a series of questions about the court battle at the company’s acrimonious annual meeting in May, including whether he was aware that Murray’s “daughter appears to have been a shareholder in a company that [Big] bought for £10.25 million”.

Collins also declined to answer when asked by another shareholder — a claimant in the action — whether he and the board had “full confidence in the honesty, integrity and transparency of the executive directors”, but discouraged investors from “reading anything into that”. At last year’s annual meeting, he had said he did have confidence in them.

The allegations centre on obscure Guernsey-based entities called Zinc, Romelle, RCP and MPL, which together at one point owned close to half of Buddi. Romelle is Big’s third largest shareholder. Big says they are “independent shareholders”.

The claimants have alleged that “all the shares held by these companies were held for the benefit of and/or were under the control of Ms Murray” and that they were used to push through the acquisitionof their equity when Big acquired Buddi, allegedly costing other shareholders millions of pounds.

Claimants include Mark Hawtin, head of the global equities team at Liontrust, an investment manager which is among Big’s largest shareholders. Liontrust declined to comment on its own position on the litigation. Philippa D’Arcy, a former Buddi board member and director, is also a claimant.

Abrdn, which holds about 4 per cent of the business, declined to comment, while SEB Investment Management, which is recorded as owning about 9 per cent, said it held the shares on behalf of a client it declined to identify. Big has lost more than 60 per cent of its value since the flotation.

In a newly filed amended defence, Big admitted that Buddi had been the original owner of a United States entity called Buddi US, a connection which claimants allege further points to Murray’s links to the Guernsey companies. Big had previously denied Buddi owned the US business.

In 2016 one of the disputed offshore entities, MPL, acquired Buddi US from Buddi for an unknown sum. Two years later, Big purchased the company for $10.25 million.

After Big bought Buddi US, Murray’s daughter, Rowena, purchased a property in north London for £1.25 million. RCP, a Guernsey company based in the same office as MPL, has a charge over the property.

The following year, Murray bought a property in Belgravia, London, for £7 million. The claimants alleged that “it is to be inferred that the monies were derived by Ms Murray directly or indirectly” from Big’s acquisition of Buddi US.

Big has said: “Ms Murray and her daughter each financed their house purchases privately and without any involvement of MPL.”

The company said MPL did not receive the majority of the proceeds for selling Buddi US until the end of 2020, after the disputed property transactions, so could not have funded them.

The RCP loan to Rowena Murray was for business purposes and “does not support the suggestion that RCP was owned by [Sara] Murray”, Big said.

While Big says the Buddi US sale was a commercial one with an unrelated party, it admitted that Rowena had obtained a 50 per cent interest in Buddi US after MPL acquired it. It said the then young graduate had planned to “assist in its expansion” after finishing her studies in the US but sold that interest to MPL for $100,000 in April 2017.

Zinc also provided security for a personal loan from Investec to Sara Murray. Big has said this was because “Zinc’s interests were aligned with the success of Buddi” and therefore with supporting Murray.

At the annual meeting Paul Pascoe, a shareholder, said to Collins: “What seems crystal clear is that there are quite a few examples of these opaque shell companies benefiting disproportionately from M&A activity with the group and historic share issues.

“It is suggested these shell companies are independent, arms-length investors despite the fact that a number of them seem to be unusually willing to make large loans to your CEO and her daughter.”

Big said that Pascoe has no “legitimate interest” in the proceedings and was seeking to “publicise” the dispute to put pressure on “Big, Buddi and/or Ms Murray”. Big claimed Pascoe was “co-ordinating” theclaimants.

In its amended defence, Big said the Guernsey companies were “discreet” fund managers for “wealthy individuals or families who wish to invest in businesses” and “do not reveal the identities of their ultimate beneficiaries”. They have invested in various businesses connected to Murray because they consider them to be “an attractive proposition based on her track record as an entrepreneur”.

The claimants have claimed the lack of evidence that the entities have ever invested in anything not connected with Murray is suggestive of their links to her. Big said “the absence of any public record orknowledge of other investments is not probative of anything”.

None of the companies appear to have a website or any other public profile. The disputed companies were registered to PO boxes at the address of FNB International Trustees, a Guernsey-registered organisation which describes itself as a “specialist international offshore fiduciary provider”. Big declined to comment on whether the disputed companies operate as, or in conjunction with, discretionary trusts.

The investors are demanding they have their shares reinstated. Big says they are seeking “opportunistically to reverse their share sale and to benefit from the exponential growth in Big and Buddi’s businesses”.

Big and Pascoe declined to comment.