Former LV boss Mark Hartigan is up to his old tricks as he uses scare tactics to sell the latest tech company
- Discredited boss is trying to land a £20million bonus at his latest venture
- Wefox was valued at £3.6 billion less than two years ago
- Hartigan warns that fintech could go bankrupt and wants to sell
Reputation in tatters: Mark Hartigan
The embattled boss who tried to sell mutual insurer LV to a US takeover firm is trying to secure a £20m bonus from his latest venture.
Mark Hartigan, a former Army colonel, was forced to leave LV after members voted against his controversial plan to transfer the 181-year-old investment firm to private equity barons Bain Capital.
He argued at the time that the private equity deal was necessary for LV’s long-term survival. Now he is accused of using “the same scare tactics” at insurance technology company Wefox, where he became chairman and CEO after leaving LV. He was ousted after a campaign by the Mail on Sunday and Ny Breaking.
The £530m deal he had tried to engineer was quashed in 2021 when he failed to get enough support from LV policyholders.
Despite this disastrous episode, Hartigan walked away with £3.5 million from his three years at the mutual, including a ‘golden farewell’ of £500,000.
Wefox is a Berlin-based company that was valued at £3.6 billion less than two years ago. But fintechs have since fallen out of favor with investors.
In a memo circulated to shareholders earlier this month – first reported by Sky News – Hartigan warned that Wefox could go bankrupt “in August, or possibly even earlier”. He plans to close some 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 he is successful, sources say he will receive a £20million bonus for completing the deal. One disgruntled Wefox investor said Hartigan had “tried to scare us all into believing the company is in terminal trouble, but we don’t believe him.”
“This is exactly the kind of scare tactic he used at LV when he tried to sell the company cheaply to Bain Capital,” the investor added. ‘Wefox is essentially a fast-growing and healthy company that only needs further investment.’
Another source added: ‘Hartigan is putting maximum pressure on investors to approve his plan to sell to Ardonagh at a low price – and collect his bonus (£20m).
“But some investors are discussing how to fight it, remove it and come up with an alternative plan.”
The vote to keep LV – formerly known as Liverpool Victoria – out of Bain’s clutches was a victory for reciprocity and LV has since recovered. It made a pre-tax profit of £107m in 2023, a big turnaround from the £145m loss the year before.
David Hyman, who replaced Hartigan as CEO, has pledged to maintain LV’s mutual status and protect it from asset strippers.
A number of private equity takeovers of household names, including department store Debenhams, have been heavily criticised.
The proposed sale of LV was particularly controversial because the life insurer is owned by policyholders and managed entirely on their behalf. It was founded in 1843 to help Liverpool’s poor pay for a dignified funeral for their loved ones and is still owned by over a million members.
Hartigan and former LV chairman Alan Cook left with their reputations in tatters after spending more than £30 million of policyholders’ money on the doomed Bain deal. Hartigan was branded ‘shameless’ by Labor MP Gareth Thomas, chairman of Parliament’s all-party group on mutual societies, for ‘fooling members every chance he got’.
Cook, a former post office director, has also come under fire for writing an email saying sub-postmasters wrongly accused of theft had “their hands in the till.” He apologized last month. Wefox is backed by some of the world’s largest technology investors, including Abu Dhabi sovereign wealth fund Mubadala.
Ardonagh’s investors include the Abu Dhabi Investment Authority, Mubadala’s sister company.
Wefox declined to comment on the Ardonagh sale talks or Hartigan’s bonus, but insisted he would lead 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 said.
Ardonagh was also contacted for comment.