UK Edition
Quindell founder plots £1bn comeback as fraud inquiry rumbles on
Controversial entrepreneur Rob Terry is plotting an audacious comeback despite remaining at the centre of a fraud investigation into a devastating accounting scandal at insurance software company Quindell.
Mr Terry could return to the stock market to tap investors with his new venture, OS3 Digital, amid an ongoing Serious Fraud Office investigation into his time at Quindell.
OS3 Digital’s 2017 annual report claimed that Mr Terry is targeting a £1bn valuation for his new venture by 2022 and wants to list its shares in an IPO in North America rather than the UK.
OS3 Digital claims to be a “digitally disruptive technology-based business” and says that its “digital platform” has been used “in relation to claims for the insurance sector in North America”.
Following a “strategic review” this year, OS3 Digital made its first investment using £750,000 of shares in a joint venture targeting the “UK claims market”. Mr Terry’s comeback was first reported in the Mail on Sunday.
The document boasts of Mr Terry’s pedigree, saying that he is a “seasoned director” that guided Quindell’s remarkable rise.
Quindell, now renamed Watchstone, surged in value to as high as £2.6bn in early 2014 before its shares plummeted 99pc in the following years. It was the Aim market’s most valuable stock at one point but Watchstone’s market cap is now just £45m.
OS3 Digital is Mr Terry’s first venture since the SFO launched an investigation into Quindell in 2015 after the company made huge revisions to its past results. It downgraded a pre-tax profit of £107m in its 2013 financial year to a £64m loss after an independent review by PwC concluded that its accounting policies were at the “aggressive end of acceptable practice”.
Mr Terry was given a £1.5m golden handshake after being forced to step down from the company in 2014 following a share-dealing controversy. He had transformed Quindell from a golf club into an insurance software giant.
Since the scandal, Mr Terry has withdrawn from the City’s spotlight. He is also listed as a director at Quob Park Wickham Vineyard, the wine company he runs with his wife in Hampshire.
Mr Terry’s former company is still reeling from the scandal and in August swung to a loss after setting aside more money for legal costs.
Australian law firm Slater and Gordon wants damages from Watchstone after being crippled by a £637m takeover of the bulk of Quindell in 2015. The acquisition was agreed just months before the SFO launched its investigation.
In August Watchstone vowed to “robustly defend” itself against the allegations it believes are “wholly without merit”. It said it is “co-operating fully” with the SFO investigation.
OS3 Digital alluded to the sale in its annual report, saying that “just one of Quindell’s Divisions” had been “sold for over $800m shortly after Rob left”.