John Duffield, the former owner of New Star, has been accused of bullying Roger Dossett, the former head of its property funds, into buying overvalued properties.
The accusation emerged in a Court of Appeal judgment granting Patrick Evershed, the former manager of New Star’s special opportunities fund, approval to bring a whistleblowing claim against Duffield.
Under whistleblowing legislation, Evershed could potentially be awarded unlimited damages if his claim against New Star succeeds.
Evershed is relying on a “formal complaint” letter that he e-mailed to human resources in 2008 regarding the behaviour of Duffield and joint chief investment officer Gregor Logan.
The letter claimed that Duffield “has been vile to most of the fund managers for several years and has been bullying us. He has created a most unpleasant atmosphere throughout the firm.”
It said: “He also bullied Roger Dossett in to buying properties when he and I and many others kept telling him the property sector was overvalued. I told him for more than three years that a credit crunch was coming, but he turned his back on me each time and walked away. He refused to listen to me or Roger.
“When I told him to stop bullying Roger he threatened to sack me”.
Evershed claims that he was suspended after sending the letter, and that chief executive Howard Covington had told him he was “emotionally disturbed and unfit to manage money”.
Henderson Global Investors, which bought New Star Asset Management for £115m in 2009, challenges the allegations and will defend the claim at the employment tribunal.