Gotham failed to file High Court defence

Quindell said it has won its libel action against research company Gotham City Research in the High Court after Gotham failed to file a defence.

Quindell started libel proceedings against short-selling research firm Gotham in the High Court in April, and the claim was served to Gotham’s Delaware base in July.

Gotham failed to acknowledge the claim or serve a defence.

Gotham had published a 74 page report which described Quindell as “built on quick sand” and alleged that between 42% and 80% of Quindell’s profits were “suspect” in April.

Quindell has always said the report was “highly defamatory and deliberately misrepresentative” and entirely rejected the conclusions that were made.  

It expects the High Court to begin evaluating damages at the end of November.

Quindell vice chairman Tony Bowers said: “We are pleased that following the co-ordinated shorting attack led by Gotham and others, we have been able to successfully win judgement from the High Court in our claim for libel against Gotham.

Whilst it is disappointing that Gotham has not been prepared to submit itself to the scrutiny of the English Courts, we have consistently stated that we believe the Gotham publication was both defamatory and deliberately misrepresentative and it is pleasing to receive validation of our claim and success in this matter. The Company will continue to pursue actions of this type, where necessary, to protect its reputation and the best interests of its shareholders.”

Quindell’s share price rose by 11% but fell back to close up 1.4% at 167.25p.

However the rise was not enough to restore Quindell to its value before the attack. Quindell’s market capitalisation valued the company at £2.3bn at the end of March but it currently stands at £759.2m.

The judgment has yet to be made public.

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