Ground Control to Major Tom: Tullett CEO's Plea in Barclays Feud

  • Terry Smith sues Barclays for failure to transfer money
  • Smith says he lost chance to profit from Fundsmith Equity Fund

When Terry Smith decided to invest about 330,000 pounds ($472,000) in the Fundsmith Equity Fund he manages, back in September 2012, he sent an e-mail to Barclays Plc asking to transfer the money from a company he used to buy and sell helicopters.

He didn’t get a response, so he sent four more e-mails including one with the plea: “Ground control to Major Tom.” Smith, then the chief executive officer of London brokerage Tullett Prebon Plc, tried phoning the bank and sent a letter by courier but by April he hadn’t been able to complete the transfer.

Terry Smith
Terry Smith
Source: Tullett Prebon

Three years later, he was still angry enough to sue Barclays in London. Smith says he missed out on profits of about 220,000 pounds from a 166 percent rise in his equities fund, according to court documents filed in August 2015 and made available this week.

Smith retired as CEO of Tullett Prebon in 2014 to focus on his asset management company Fundsmith. The lawsuit describes his attempts to contact the bank.

Smith used his company, Aethelflaed Investments Ltd., for the purchase and sale of helicopters, according to his suit. A pilot and historian in his spare time, Smith holds about 60 million pounds worth of units in the 5 billion-pound Fundsmith Equity Fund.

“To say that the service the claimant and Terry received from Barclays Bank was atrocious is an understatement,” Charlotte Balbirnie, a spokeswoman for Smith, said in a statement. “Aethelflaed is compelled to pursue this action and looks forward to hearing the court’s decision.”

Fundsmith Equity Fund growth from date of transfer request to date of lawsuit filing
Fundsmith Equity Fund growth from date of transfer request to date of lawsuit filing

Barclays spokesman Simon Hailes said the bank would vigorously defend the case and declined to comment further. Balbirnie said that Fundsmith declined to comment.

In defense papers filed in January, Barclays said Smith had used the wrong e-mail address and contacted the wrong individuals. Its contract with Smith ruled out making account transfers by e-mail, and its staff had legitimate concerns that the letter he send was not genuine. “Barclays at all times acted in according in accordance with its rights under the contract,” the bank said in the documents.

Barclays “failed to comply with the claimant’s instructions and failed to effect a bank transfer despite the claimant’s account being in credit with a balance of at least £330,000,” Aethelflaed said in the suit.

The case is: Aethelflaed Investments Ltd v. Barclays Bank Plc, High Court of Justice
Chancery Division: 15-359

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