Investigating and Resolving Issues
Traditional English Clothing Company
Mills and Reeve act on behalf of a foreign owned holding company that had acquired a majority shareholding in a traditional family-run clothing manufacturing business.
The manufacturer had a good reputation for high quality products but had been through two liquidations and continued to run at a loss.
The foreign parent company were concerned that the business was being badly managed. They also had serious concerns that a senior employee was running his own business on company time and manufacturing products for his private company at a discount.
Akenham conducted an in-depth investigation looking at business arrangements and the senior employee’s conduct.
The investigation established that the senior employee was a director of a competing business and there was evidence of the employee’s private business receiving preferential terms from the manufacturer.
The investigation also established that the senior employee had been given permission by a company director to develop his own business in company time and also that the arrangement had been allowed to continue without any parameters being set or safeguards put in place.
Whilst the investigation did not establish misconduct on behalf of the senior employee it did shine a light on why the company was not performing as well as the parent company hoped.
As a consequence of the investigation the parent company put new safeguards in place to ensure the sound management of the business and restructured the management of the company. The senior employee left employment under a compromise arrangement.
Mills & Reeve Partner, Ian Mather who was advising the company said: “Akenham’s investigator did a first class job. The investigation was handled with calm professionalism. Akenham got to the heart of the matter quickly and delivered an excellent report on time and on budget.”