More Partners Implicated in AllensGate:”THERE IS SOME MAJOR SH*T GOING DOWN”

The AllensGate saga continues and things are about to get a whole lot “muddier”. Firstly, some corroboration for Monday’s story, at least in outline.  An anonymous Allens spy shouted this alarming message, capital letters and all:

now that is a big "mud banana"!

THERE IS SOME MAJOR SH*T GOING DOWN AT ALLENS TO DO WITH CONFLICT OF INTEREST. OVERHEARD THIS MORNING THREE ALLENS PEOPLE TALKING ABOUT IT TOGETHER IN TOORAK RD . THEY SOUNDED VERY FREAKED OUT. SOMETHING TO DO WITH A CLIENT CALLED ’ACONNECTS’

Secondly, according to documents forwarded to Firm Spy, a complaint has been filed against Tim Lester, a partner in Allens Arthur Robinson’s Perth office, to the Legal Profession Complaints Committee of Western Australia. The complaint alleges that Lester was aware of the alleged conflict of interest between Melbourne partner Michael Robinson and Aconex Ltd, and that he:

has allowed, and continues to allow, Allens Arthur Robinson to act with a blatant conflict of interest.

We’ve also been told that a complaint has been made to ASIC.  However, ASIC wasn’t able to confirm or deny the potential existence of such a complaint.  A spoksesperson from the Breach & Enforcement department commented to Firm Spy:

It is ASIC’s policy not to comment on the potential receipt or nature of complaints.

Complaints in similar terms have allegedly also been filed against Chelsey Drake (Queensland), James Cook (Victoria) and Jim Dwyer (NSW).  The latter is, ironically, also the head of the firm’s ethics committee.  We should know more about these alleged complaints in due course.

AAR partnership chairman Ewen Crouch is apparently also implicated in the Aconex affair, and seems to be copied into all the relevant emails.  But an email we sent him earlier this week heralded the following response:

Thank you for your email.

I am out of the office travelling until 19 February 2011. For urgent
enquiries, you can reach me on [redacted]. I also have limited access
to email. 

Otherwise,please contact my assistant [redacted]

Kind regards, 

Ewen Crouch | Chairman

At least one spy has expressed wonderment as to his intended travel destination.  We share that curiosity!

A further astonishing detail has also emerged since Monday’s heartbreak bombshell.  Remember that 28 January EGM we mentioned?  The one where Allens was asked a series of probing questions about the supposedly arms-length advice it provided?

nope, this one is too big!

Well apparently, once Aconex called a meeting to pass a resolution to remove its chairman, we’re told that the directors should have taken “all steps necessary” to assist the company to pass the resolution.  The problem is, shortly after the meeting was announced, someone wrote a letter on behalf of all the directors to all shareholders, advising them to vote against the resolution and support the incumbent chairman, and it seems (though hasn’t been confirmed) that the shareholder-directors did then vote against the resolution.  Gee, you wouldn’t want to be the lawyer who advised the directors (or the company? wait, we’re confused!) to do that.  But guess who penned the letter?  Michael Robinson – though in his capacity as Aconex director this time:

All of your other Directors strongly believe that Mr Hosking is doing an exemplary job in this role and strongly value his contribution to the successful operation of the Board. …

As a consequence, each other Director supports Mr Hosking and intends to vote any shares that they hold against the resolution to remove Mr Hosking as a director. …

Notwithstanding each other Director’s intention to support Mr Hosking and vote any shares that they hold in order to retain him as a Director and your Chairman, the Board is receptive to shareholders’ views on all corporate governance issues and would be delighted to discuss, at the EGM or at any time by arrangement through the Company Secretary, any matter related to corporate governance or the company’s strategy and execution.

But it gets better: apparently, the official minutes from the meeting omit any reference to Robinson’s response to the question about conflicts, to which he stated (with some irony, evidently):  “The company has carefully considered the matter, and is of the view that neither I nor Allens Arthur Robinson have a conflict of interest.”  And guess who chaired the meeting?  None other than… Michael Robinson!

Err… can someone call Kenny?

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