RE SUNPOWER (UK) LIMITED _________________________________________ INSTRUCTIONS TO COUNSEL _________________________________________ Instructing solicitors act for Solpuissance SA (“Solpuissance”), a French company which has developed new technology for the production of photovoltaic panels to produce electricity from solar radiation. The technology, known as HSG (or High Solar Gain) technology, has enabled Solpuissance to manufacture photovoltaic panels, which are 40% more efficient than their rivals and cost about 10% less. The HSG technology is protected by patents covering all the major markets in the world. The man behind the technology and Solpuissance is M. Henri Lecompte. He is the Chief Executive of Solpuissance and the brains behind the development of HSG technology. In April 2010 Solpuissance entered into a joint venture with Squeaky Clean Limited (“SCL”) to market and sell HSG solar panels in the UK, Australia and the United States. The man behind SCL is Keith Sharp, who persuaded M. Lecompte that his company had the distribution network and expertise in green energy to achieve maximum market penetration in all three countries. The UK Joint Venture company is Sunpower (UK) Limited (“Sunpower UK”). The business in Australia has been operated through an Australian company, Sunpower (Australia) Pty Limited (“Sunpower Australia”), which is now in liquidation. For reasons which are not clear to instructing solicitors, the business in the United States has been carried on by two English companies, Sunpower (US) Limited (“Sunpower US”) and its wholly owned subsidiary, Sunpower Solutions (US) Limited. Mr Sharp is the sole director of Sunpower US. M. Lecompte has approached instructing solicitors for advice because he believes that sales have been and, in the UK and the US, continue to be diverted away from the joint venture companies and that there are other breaches of the Joint Venture Agreement. It would appear that things have gone particularly badly in Australia, where, as previously stated, the joint venture company has already gone into liquidation. Instructing solicitors are unclear about the precise circumstances of the Australian liquidation, but understand that the Australian liquidator is intending to 1 seek the assistance of the English courts (see further below). As far as the US business is concerned, M. Lecompte has been able to obtain only very limited information. It would appear that Sunpower US is solvent, but that business has been diverted away from it to a locally incorporated company, which is installing HSG solar panels. The deal done between Mr Sharp and M. Lecompte was essentially that SCL would provide 50% of the capital together with the distribution network, sales expertise and management services, whilst Solpuissance would provide the other 50% of the capital together with the HSG technology, training and technological support. The JVA provided that Solpuissance and SCL would each own 50% of the share capital of Sunpower UK, Sunpower Australia and Sunpower US. The JVA provides that the joint venture companies will each have the sole right to distribute products containing HSG technology within their respective countries, but will pay prices calculated in accordance with a specific formula set out in a schedule to the JVA. The effect of this is to inflate the prices paid to Solpuissance for the products by about 10%. Initially, Sunpower UK was extremely successful, but M. Lecompte has become aware that during the past 12 months significant sales of HSG products have been made in the UK by a company called Future Power Limited (“FPL”) and the fortunes of Sunpower UK have dwindled. M. Lecompte has concerns regarding the solvency of Sunpower UK, but has been unable to get access to the books and records of the company to ascertain the true position. FPL is a wholly owned subsidiary of a company called Lateral Acquisitions Limited (“LAL”), which is a Cayman Islands company. M. Lecompte believes that LAL is owned and controlled by Keith Sharp and that he has been diverting business away from Sunpower UK. The evidence for this is presently limited to that obtained by a private investigator, Dave Street (“Mr Street”) of Street Wise Enquiry Agents (“Street Wise”), who was engaged by M. Lecompte to find out what was going on. Mr Street has spoken to a customer of FPL, Rupert Green (“Mr Green”), and examined the HSG solar panels installed on his property. The following facts have emerged from his enquiries: (1) Mr Green had approached Sunpower UK, spoken to Mr Sharp and arranged for a salesman to visit his property to advise on the installation of solar 2 panels, but the salesman who actually turned up at his house said he was from FPL and that it was a “sister company” of Sunpower UK; (2) Mr Green had heard the two men who actually installed the solar panels on behalf of FPL referring to someone called “Keith”, who had given them this job, but already owed them money in respect of two other installations; (3) The serial numbers on the solar panels installed on Mr Green’s property came from a batch exported to India by Solpuissance at very much lower prices than would be paid under the Joint Venture Agreement. Street Wise have also carried out checks on FPL and Mr Sharp. FPL is a £100 company with only two issued shares. It has not filed any accounts, but the checks carried out suggest that it does not have any place of business and does not appear to own any assets. A Gary Hutton is recorded at Companies House as the sole director of the company, but he was traced to a fish and chip shop in Exeter and said that he had never heard of FPL or Sunpower UK. Mr Street has suggested that FPL might be merely a conduit through which monies are channelled before being moved elsewhere. In contrast, Mr Sharp appears to be doing extremely well. He owns a flat in London and has recently purchased a holiday home in Cornwall. He appears to drive a number of expensive sports cars and has been seen in the company of a very glamorous blonde in her early thirties. However, checks have also revealed that he has a somewhat worrying business history. During the past 20 years he has been a director of some 45 companies, of which 15 have gone into insolvent liquidation leaving creditors owed many millions of pounds. Solpuissance has received a letter from the Australian liquidator stating that he is investigating the circumstances of the liquidation of Sunpower Australia and seeking to locate assets properly belonging to the company. It would appear that shortly before going into liquidation the company transferred the sum of $75,000 to Doreen Wellbeloved (“Miss Wellbeloved”), an Australian Air Stewardess and former glamour model. She has now left her job and moved to the UK. The letter asks about the whereabouts of Miss Wellbeloved and states that the Australian liquidator will be shortly applying to the English court for assistance with his investigations and to enforce an unspecified judgment which he has obtained in Australia. 3 Counsel is asked to advise in relation to the following matters: (1) The remedies of Solpuissance in relation to the diversion of business away from Sunpower UK and Sunpower US and the possible misapplication company monies; (2) The jurisdiction of the English courts to assist the Australian liquidator and enforce Australian judgments and the possible implications of the liquidator’s application to the English courts; (3) The remedies available in respect of business opportunities which have been diverted away from Sunpower UK; (4) The scope for injunctive or other interlocutory relief to freeze the assets of Mr Sharp, assist with the tracing of monies belonging to Sunpower UK and obtain documents and information regarding the affairs of Sunpower UK and FPL; (5) Since it is not anticipated that Mr Sharp will voluntarily provide information, the method of enforcing any disclosure or other obligations imposed by the court. 4