Arch Financial Products chief executive Robin Farrell and compliance director Robert Addison have today been accused of giving inconsistent evidence, lying and distorting the facts during their High Court battle.
In the final hearings of the case - brought against Arch by the Guernsey cells' current board, SPL Private Finance - the claimants' lawyer, QC Richard Coleman, accused the men of having given different versions of accounts to the court and the Financial Services Authority (FSA) to that which was found in contemporaneous evidence.
He also said the pair had deliberately used obscure and vague language in their evidence, which gave them scope to manoeuvre.
Arch FP is being sued for £150m for gross negligence in its role as investment manager of the failed Arch Cru funds between 2007 and 2008 and of pocketing a 'secret' £3m profit.
SPL has also brought claims against CEO Farrell, alleging that he dishonestly assisted Arch FP in breaches of fiduciary duty in relation to its investment in Lonscale, a holding vehicle of student accommodation group Club Easy.
Coleman said: "Farrell and Addison have repeatedly lied and distorted and manipulated the way [they presented the evidence]. They stated matters in terms that were vague and gave them the most scope for manoeuvre."
He added: "The defendants have given a fundamentally untruthful account of the Lonscale investment.
"[Their evidence] was carefully constructed to distort the truth. The lack of coherence in the accounts point to [...] the unavoidable conclusion that [...] Farrell dishonestly assisted Arch FP in breaches of fiduciary duty and was instrumental in arranging the [Lonscale transaction]."
Arch previously argued that it had not pocketed a secret profit but had acted as a corporate adviser to the buyer of Club Easy, Foundations Capital, which warranted a fee.
But Coleman argued that various evidence pointed to Arch having jointly originated the deal with Foundations Capital, alleged to be a close alley of Arch.
The 'secret' fees were not paid by Foundation Capital's Lee Barkman but by Lonscale, he argued.
He told the court: "The payment of fees and the Lonscale acquisition were financed in exactly the same way. Their account is untruthful and deliberately so."
The case continues...
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till