Examination of Witnesses (Questions 280
- 299)
WEDNESDAY 15 JULY 1998
MR BOB
YERBURY, MR
NEIL WOODFORD
AND MRS
MARGARET RODDAN
Dr Gibson
280. Why not?
(Mr Woodford) Because the concerns that we had about
the company related principally to the directorship of the company.
281. So you thought it pointless asking the
directors?
(Mr Woodford) Yes.
Dr Jones
282. Well what were you concerned about with
the directors?
(Mr Woodford) We were very concerned about the strategy,
we were very concerned about what we had discovered about the
presentation of information to the City and to shareholders, we
were very concerned about the progress of the two clinical trials
which were ongoing, which clearly from the evidence that I saw
were not proceeding in a way that the market had come to believe.
(Mrs Roddan) The other issue that we were concerned
about was the fact that we had been told by Dr Millar that there
was an SEC inquiry covering the company and that was another reason
why we did not approach the Directors because that issue—
Dr Turner
283. That was another worry?
(Mrs Roddan) Yes, because that issue—they were
looking at Directors.
Dr Williams
284. Do all of these concerns point simply to
the chief executive of the company, Mr McCulloch?
(Mr Woodford) I think he is the focus of the concern,
but there is a shared responsibility, both historic and current.
285. I notice in one of our briefings that the
four executive directors had left during 1996, so Keith McCulloch
was the only long term personality there?
(Mr Woodford) Yes.
286. And in a sense your knowledge then of Dr
Millar was the only alternative you had to the chief executive's
advice?
(Mr Woodford) Yes, indeed.
287. The other directors did not seem to be—
(Mr Woodford) On clinical matters he was the only
voice in it.
288. Right. Now as regards this meeting on 11
March, did that take place without the knowledge of British Biotech,
without the knowledge of the Board.
(Mr Woodford) It took place without the knowledge
of British Biotech and the Board, yes.
289. Right, and you invited Dr Millar to that
meeting?
(Mr Woodford) Yes.
(Mrs Roddan) The Board was aware that we were going
to come to the meeting with Kleinworts and that we had phoned
them and organised a meeting. Kleinworts had told them that we
were coming in to see them.
290. But they were not aware that Dr Millar
was coming to the meeting?
(Mrs Roddan) No, they were not aware that he was coming
to the meeting.
291. Now then, were you aware that in simply
inviting Dr Millar to the meeting you were prejudicing his position
within British Biotech?
(Mr Yerbury) Yes. I think the answer is yes.
292. That he was coming at risk of his professional
future?
(Mr Woodford) He also knew that. He accepted that
and it was clearly a difficult decision. We had received advice
from our solicitors that our case, if you like, that we wanted
to present to Kleinworts would have greater weight if Dr Millar
was in attendance with us. We put that to him; he recognised as
I did at the time that it was like a step from which there would
be no turning back and he acknowledged that.
293. Did you invite Mercury Asset Management
to the meeting?
(Mr Woodford) When we spoke to Mercury they initially
wanted us to proceed with our case, if you like, with the company's
advisers first. They did agree to meet us so that we could discuss
some of our concerns which were based on publicly available information,
which we did. They then said that it was their opinion that we
ought to go to the advisers to discuss other matters which were
not in the public domain. They would then be happy to hear from
Kleinworts the nature of that privileged information, if you like,
but they wanted to hear it from Kleinworts, not from us.
294. Mrs Roddan, you made some reference to
the United States Securities and Exchange Commission's inquiry
into these press releases of 1995/1996. Did you share some of
the concern about those press releases?
(Mrs Roddan) Not at the time, but having been told
that there was an investigation covering that period, what we
then did was that we obviously went back and looked through our
own files, our own records as to exactly what those press releases
are and we looked at those press releases against the documentary
evidence Dr Millar showed us as to what was actually going on
in the clinical trials at the time and what the internal debate
had been about the nature of the press releases at the time.
295. Sorry, you said that information that Dr
Millar had shown you? This was at the 11 March meeting, was it?
Or had he shown you information previous to that?
(Mr Yerbury) No, it was after 11 March.
(Mrs Roddan) After 11 March.
(Mr Woodford) When we were checking out Dr Millar's
story obviously we had to analyse the documentary evidence and
it was whilst we were studying that we—
296. Right. Was it your general feeling in this
meeting of 11 March that this great story, Marimastat—that
was your primary interest of 1995-96, and I can remember reading
it in the newspaper at the time—that this great story really
was not all it was cracked up to be?
(Mrs Roddan) No. I think Marimastat and I think still
now we still believe and are very confident about MMPI technology
and its derivatives. What we were concerned about was the appropriate
strategy that the company should adopt for bringing that to light.
297. Finally, this meeting on 11 March was described
by British Biotech as taking place in highly irregular circumstances.
That is an understatement, is it not? That the meeting itself
was highly irregular?
(Mr Woodford) The circumstances were highly irregular,
I agree, but the nature of our concerns were also highly irregular.
I think the important point is what happened subsequently in terms
of how we responded to the information once we were appraised
of it.
(Mr Yerbury) The contact with Dr Millar was not highly
irregular at all. It was quite normal.
298. It might have been normal if British Biotech
knew that the meeting was taking place, but the fact that they
did not know and that he was coming at the risk of his job which
you admitted to earlier, that was—
(Mr Yerbury) We did not know that at the time; we
did not know that when the meeting was arranged.
Chairman
299. But you just said that you did? Mr Woodford
has just said that you did know that Dr Millar would be putting
his job on the line?
(Mr Woodford) No, we are talking about two different
meetings, I think. You are talking about the meeting on the 11
March at the pub and the meeting we are talking about is the meeting
at Kleinworts.
Chairman: I beg your pardon. Fine, now we must
move on. A very quick question from Dr Jones and then Mr Jones.
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