Spying row rocks Ocado, M&S and Waitrose


A BITTER row has erupted between two former friends over the Ocado delivery business, threatening to embroil some of retail’s biggest names.

The legal spat – which centres on the historic tie-up between Marks & Spencer and Ocado – shines a spotlight on the battle for control of Britain’s grocery delivery market, with accusations of industrial espionage, top secret meetings and ‘bullying’ business tactics.

At the heart of the clash stands Jonathan Faiman, one of three former Goldman Sachs bankers who launched Ocado 20 years ago, and Tim Steiner, also one of the trio and now chief executive of the £9 billion delivery business.

Tim Steiner, chief executive officer of Ocado Group Plc, which is worth £9 billion

Jonathan Faimanm founder of Ocado and now of Neos, photographed at the Lanesborough in London

At the heart of the clash stands Jonathan Faiman (R), one of three former Goldman Sachs bankers who launched Ocado 20 years ago, and Tim Steiner (L), also one of the trio and now chief executive of the £9 billion delivery business

Steiner has become one of Britain’s wealthiest businessmen after two decades battling naysayers. Last year he shelled out £25 million on a superyachet called Silver Fox – reputedly named after himself.

Faiman, best man at Steiner’s wedding, left Ocado in 2010. He approached Marks & Spencer in June last year to pitch a new online grocery plan through his fledgling Today Development Partners venture. The idea, if it came to fruition, would put him in direct competition with his old friend.

The high street stalwart was one of the few major food retailers with no online shop. Faiman offered a solution to compete with its fierce rival Waitrose, then Ocado’s partner.

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The idea came to Faiman, he says, after he was granted a tour of Ocado’s Andover warehouse. A meeting with M&S chairman Archie Norman followed days later in June last year.

Faiman said the meetings were held in secret amid fears Steiner would react ‘poorly and aggressively’ to the talks, especially if he learned of Faiman’s involvement. False names were used when entering the M&S head office and Faiman requested meetings ‘should take place in rooms without windows,’ documents allege.

Norman revealed from the beginning that M&S was also in talks with Ocado, Faiman claims. But Norman also confided that he thought Ocado could be using the threat of switching to M&S to strongarm Waitrose into better terms.

Norman and Rowe apparently acquired ‘burner’ phones – untraceable pay-as-you-go phones – allegedly to ensure communications remained private

Norman and Rowe apparently acquired ‘burner’ phones – untraceable pay-as-you-go phones – allegedly to ensure communications remained private

Norman and Rowe apparently acquired ‘burner’ phones – untraceable pay-as-you-go phones – allegedly to ensure communications remained private. Faiman says by November last year M&S and Ocado had begun warming to the idea of an agreement – first revealed by The Mail on Sunday in January. So Faiman changed tack and approached Waitrose instead.

Within months Today had signed an agreement to build Waitrose.com into a £1 billion online operation.

But, in the background, relations between Faiman and Steiner had soured dramatically.

Ocado alleges Faiman had through various means ‘obtained confidential financial and operational data about the Ocado business’ which he used in his pitches to both M&S and Waitrose.

Ocado says Faiman, who denies any wrongdoing, had also been in communication with a number of Ocado staff to help him build his new business, including logistics development and engineering director Jonathan Hillary who resigned from Ocado in May after 18 years. Hillary has also denied wrongdoing and has filed a separate counter claim.

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The increasingly litigious row escalated further in July when Ocado obtained an order to have documents in Faiman’s possession seized.

It alleges these included details of the M&S agreement with Ocado – then using the codename ‘Apricot’. It also says Faiman had in his possession company documents that would help him design automated distribution centres similar to Ocado. During the swoop, the papers allege, Faiman’s driver ‘was observed placing two cases belonging to Mr Faiman into his car and driving away’. It is claimed the driver also put a laptop and other documents into an envelope and ‘gave it to a receptionist at the hotel’ – understood to be the Connaught in London.

Faiman admits to having ‘operational metrics’ documents from 2017 in his possession but denies they were ‘of any commercial value’. He adds that other items in his possession were ‘routinely provided to suppliers, investors and other third parties.’

He alleges that M&S broke non-disclosure agreements by informing Steiner that his bank HSBC had agreed to finance Today Development.

Faiman’s papers say a ‘red faced’ Steiner demanded HSBC dropped Faiman as a client or he would ‘cease banking with HSBC’.

The documents claim HSBC assured Faiman ‘it did not respond well to bullying’ and ‘would not be withdrawing its services or finance from Today or Mr Faiman’. Ocado says it did not learn about Faiman’s HSBC relationship from M&S, nor did it take ‘any action in relation to this information’.

Ocado is demanding an injunction to restrain the defendants, which include Hillary, Faiman and Today Developments, from ‘making use of confidential information relating to the Ocado business’ and requiring any such information should be ‘destroyed or delivered up’.

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Faiman, whose agreement with Waitrose was scrapped earlier this month amid the mounting court battle, says the court action by Ocado means his firm suffered ‘loss or damage’ of at least ‘hundreds of millions’.

Faiman said Today was ‘vigorously contesting these claims’ and had been subjected to ‘a concerted anti-competitive attack.’

He said he would continune to build the business.

•In a surprise announcement, M&S said yesterday finance director Humphrey Singer said he will step down from the business after just over a year. Chief executive Steve Rowe said: ‘Humphrey has been a huge asset to the business.’

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