- Disgraced boss trying to get £20m bonus at his latest company
- Wefox was valued at £3.6bn less than two years ago
- Hartigan warns fintech could become insolvent and looks to sell
Reputation in tatters: Mark Hartigan
The disgraced boss who tried to sell mutual insurance company LV to a US buyout firm is trying to secure a £20m bonus at his latest venture.
Mark Hartigan, a former army colonel, was forced to resign from LV after members voted against his controversial plan to hand over the 181-year-old mutual to the private equity barons of Bain Capital.
He argued at the time that the private equity deal was necessary for LV’s long-term survival. He is now accused of using “the same scare tactics” at insurance technology company Wefox, where he became chairman and chief executive after leaving LV. He was ousted following a campaign by the Mail on Sunday and Daily Mail.
The £530m deal he had tried to engineer was scrapped in 2021 when he failed to gain enough support from LV policyholders.
Despite this disastrous episode, Hartigan pocketed £3.5 million from his three years at the mutual, including a “golden goodbye” of £500,000.
Wefox is a Berlin-based company valued at £3.6bn less than two years ago. But fintechs have since fallen out of favor with investors.
In a memo distributed to shareholders earlier this month (first reported on by Sky News), Hartigan warned that Wefox could become insolvent “in August, or potentially even sooner”. He plans to close several subsidiaries to stem losses.
But the Mail on Sunday understands Hartigan has also put Wefox up for sale and is in advanced talks to sell the business to Ardonagh, a leading London insurance broker.
If successful, sources say he will receive a £20m bonus for completing the deal. One disgruntled Wefox investor said Hartigan had been “trying to scare us all into believing the company is in terminal trouble, but we don’t believe him.”
“This is exactly the type of scare tactic he used on LV when he was trying to sell the business cheaply to Bain Capital,” the investor added. “Wefox is fundamentally a strong, fast-growing company that just needs more investment.”
Another source added: ‘Hartigan is putting maximum pressure on investors to approve his plan to sell Ardonagh at a discounted price and collect his £20m bonus.
“But some investors are discussing how to fight this, remove him and come up with an alternative plan.”
The vote to keep LV (previously known as Liverpool Victoria) out of Bain’s clutches was a victory for the mutual and LV has since bounced back. It posted a pre-tax profit of £107m in 2023, a big swing from the previous year’s £145m loss.
David Hyman, who replaced Hartigan as chief executive, has promised to maintain LV’s mutual status and protect it from asset strippers.
Several private equity takeovers of household names, including department store Debenhams, have been heavily criticised.
The proposed sale of LV was particularly controversial since the life insurer is owned by policyholders and run exclusively for their benefit. It was created in 1843 to help the poor of Liverpool pay for a decent funeral for their loved ones and is still owned by over a million of its members.
Hartigan and former LV chairman Alan Cook walked away with their reputations in tatters after spending more than £30m of policyholders’ money on the failed Bain deal. Hartigan was branded “shameless” by Labor MP Gareth Thomas, chairman of Parliament’s all-party group on mutuals, for having “played members for fools every chance he got”.
Cook, the former Postmaster General, has also been criticized for writing an email saying that subpostmasters wrongly accused of theft had their “hands in the box.” He apologized last month. Wefox is backed by some of the world’s largest technology investors, including Abu Dhabi sovereign wealth fund Mubadala.
Among Ardonagh’s investors is the Abu Dhabi Investment Authority, Mubadala’s sister company.
Wefox declined to comment on talks over Ardonagh’s sale or Hartigan’s bonus, but insisted it would take the company “through the next phase of development”. This involves “a consolidation and concentration of Wefox’s international activities” after years of rapid growth, a spokesperson added.
Ardonagh has also been contacted for comment.
