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Witness: Patrick Henry Pierce O’Sullivan
Statement Number: WITN11000100
Date: 12 June 2024
THE POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF
PATRICK HENRY PIERCE O’SULLIVAN
I, Patrick Henry Pierce O'Sullivan will say as follows:
Introduction
1. I am the former Non-Executive Chair (“Chair”) of the Shareholder Executive
(“ShEx’). I was appointed to this position at the end of 2011, with my start date
being March 2012, and remained in post until September 2014.
2. This witness statement has been prepared in response to the Rule 9 Request
made by the Post Office Horizon IT Inquiry (the “Inquiry”), made pursuant to
Rule 9 of the Inquiry Rules 2006, dated 3 May 2024.
3. The facts in this witness statement are true, complete, and accurate to the best
of my knowledge and belief.
4, I have been assisted in preparing this witness statement by Eversheds
Sutherland International LLP, who act for UK Government Investments
(‘UKGP’).
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Background
5. I have been asked to set out a summary of my career and qualifications prior
to joining ShEx. I hold a Bachelors of Arts in Business Studies from Trinity
College, Dublin and a Masters of Economics from LSE. I am a Fellow of the
Institute of Chartered Accountants in Ireland. During my career, I have worked
for a number of financial institutions including Bank of America, Barclays, and
Zurich Financial Services Group (where I was CFO before being promoted in
2007 to Vice Chairman). I began my non-executive career in 2007 when I was
appointed as Senior Independent Director at Man Group (until 2012), and as
a non-executive director and Chair of the Audit Committee of Collins Stewart
(until 2009). Upon retiring from Zurich Group in 2009, I focused exclusively on
my non-executive roles.
6. I joined the Bank of Ireland as the non-executive chair of the audit committee
in 2009, and subsequently became the Deputy Governor of the Bank of Ireland
in 2011, which was also a non-executive position. The Secretary of State
appointed me as Chair of the ShEx Board in October 2011, with a start date of
March 2012. The time commitment for each of these roles was one day a week
and two days a month respectively. I resigned as Chair of the ShEx Board in
September 2014.
7. My understanding is that a key aspect to my appointment was my expertise in
corporate management and my experience in senior executive positions of a
number of companies, which was of obvious relevance to ShEx which
exercised the shareholder role for many different assets. I did not sit on any
other subcommittees at ShEx. There was a large degree of corporate finance
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and corporate management expertise both on the Board and within ShEx more
broadly.
8. I joined Old Mutual plc as the non-executive chair in 2010. I worked four days
a week at Old Mutual plc. From 2013 to 2018, I was also chair of Lloyds
Syndicate 218. I remained in my position at Bank of Ireland until 2015 and
remained in my position at Old Mutual Plc until we broke up the company in
2018. I was chair of the Board at Saga plc from 1 May 2018 until October
2020. Since February 2023, I have been an advisor (part-time) to the
Cambridge Institute for Sustainable Leadership in respect of Board practice.
The Government's interest in POL
9. I have been asked to describe the Government's interest in Post Office Limited
(‘POL’) for the period in which I was engaged by ShEx. In April 2012, POL
became a public corporation, separate from Royal Mail and owned 100% by
the Government, specifically the Secretary of State of the Department of
Business Innovation and Skills (“BIS”).
10. The Secretary of State for BIS (as shareholder), at the time, had ultimate
responsibility for the Government’s shareholdings in Royal Mail Group and
POL. The Secretary of State could not delegate his responsibilities. The
Secretary of State was not responsible for the day-to-day oversight of POL.
The Permanent Secretary, who was Martin Donnelly, had accountability as
Accounting Officer for POL.
11. The Secretary of State, in my view, cannot have been expected to have taken
any more of an active role in overseeing the day-to-day operations of Royal
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Mail Group and/or POL. This reflects usual practice — the role of a shareholder
is not to manage the operations of the company. Nor was it the function of BIS
(or ShEx, as an organisation within BIS) to be responsible for the operations
of Royal Mail Group and/or POL. Responsibility for the company’s operations
was with the POL Board, comprised of senior management and independent
non-executive directors, including a representative of the Secretary of State,
through ShEx, the Shareholder NED.
11.1. Moreover, ShEx did not have the expertise to run commercial enterprises such
as Royal Mail or POL. ShEx was comprised largely of former corporate
financiers, civil servants, or other professionals. The role of ShEx was to
exercise the shareholder function (as described in further detail below) and
provide advice via the Permanent Secretary to the relevant Minister, including
in respect of POL. ShEx had access to external advisors (such as Rothschilds
in the context of the Royal Mail Group float), and the expertise and experience
of the ShEx Board to assist it in this task.
12. Use of arm’s-length bodies (“ALBs”) is the preferred modus operandi for
Government owned entities. There are many benefits to the ALB model, which
I need not rehearse here as others who have been called by the Inquiry to give
evidence will be able to speak to this in more detail. The key point is that for
the objectives of the ALB model to work as regards POL, it must be able to
operate on a truly arm’s-length basis, such that Government does not interfere
with operational and/or contractual matters. In addition, the Government
would be unlikely to have the expertise necessary to run commercial
operations such as POL.
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13. It is nonetheless critical that government-owned corporations have the correct
and appropriate scrutiny; they should be held to essentially the same corporate
governance standards as listed companies. By the Government shareholder
having a representative on the POL Board and by having the ShEx Team
(defined below) monitoring POL, there was arguably greater scrutiny on POL
than that which publicly listed companies might experience.
Organisation of ShEx and strategy of oversight
14, As I have said, it is not for central Government to micro-manage the operation
of large commercial entities such as POL and there are good and obvious
reasons why ALBs should be given the autonomy, subject to the oversight of
their boards, to take decisions in the best commercial interests of the business.
15. ShEx’s function in this respect was to assist with the shareholder role of
different entities within the Government's portfolio (i.e., where it was the sole
or major shareholder). Within ShEx, separate teams were established to
exercise this function in respect of different assets (the “ShEx Team’), and this
includes the management of the Secretary of State’s shareholding in POL.
16. The ShEx Team would liaise directly with Ministerial outer office staff to brief
the Minister on specific issues relating to POL as they might arise. In my view,
the ShEx Team’s relationship to BIS was as an advisor which was embedded
within the Department. Ministers were also advised and assisted by BIS civil
servants (including their Private Offices) and Special Advisors (SpAds).
Requests from Ministers were routine and would have been responded to by
the ShEx Team as appropriate.
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17. I have had the benefit of reviewing the First Witness Statement of Mr Charles
Donald dated 19 February 2024 (WITN10770100). Paragraph 9 describes
ShEx’s shareholder role in detail, and appears to me to provide a good and
accurate summary. I would add that the ShEx Team’s exercise of the
shareholder role had (necessarily) more political considerations than in a
normal publicly listed company.
18. I also note paragraphs 26 and 27 of Mr Donald’s First Witness Statement
(WITN10770100), where Mr Donald describes the responsibilities of the ShEx
Team, and the way that these were exercised. I consider that these paragraphs
broadly reflect the responsibilities of the ShEx Team during my tenure as Chair,
although the granular detail would not have been evident to me in my role as
Chair of the ShEx Board, nor would I have had visibility on, for example, the
frequency of monitoring meetings with POL or the nature of the issues covered.
The ShEx Board
18.1 The ShEx Board was not a corporate board (i.e., where directors have
statutory fiduciary duties under the Companies Act 2006); it was an advisory
board. The role of the ShEx Board was to oversee the executive below it, this
included considering any specific issues referred to the ShEx Board by the
executive.
18.2 Whilst there were no statutory duties imposed on the ShEx Board under the
Companies Act 2006, we tried to mirror standard governance processes. I
have been shown ShEx Board’s Remit dated August 2010 and Shareholder
Executive Terms of Reference dated October 2009 (UKGI00041953) and,
although I do not recall whether I saw this document during my tenure as Chair,
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I consider this document, and in particular paragraphs 6 and 7, accurately
reflects the responsibilities of the ShEx Board, and how it functioned.
18.3. The ShEx Board was comprised of both executive directors and non-executive
directors, with the majority of the ShEx Board being non-executive directors.
As I have noted above, there was a large degree of corporate finance and
corporate management expertise on the ShEx Board.
19. I have been referred to the letter appointing me as Chair of the ShEx Board
dated 4 October 2011 (UKGI00045855). Paragraph 3 of this document sets
out that my remit as Chair was to:
19.1 lead the Board of Directors, ensuring their effectiveness in all aspects of their
advisory role;
19.2 lead bi-monthly Board meetings in determining future strategy and direction for
ShEx;
19.3 facilitate, promote, and ensure the effective contribution of all Executive and
Non-Executive Directors and ensure that constructive relations exist between
them;
19.4 develop a constructive, frank, and open relationship with the CEO of ShEx,
holding them accountable for the effective implementation of decisions;
19.5 be actively available for the continued mentoring and support of ShEx
colleagues;
19.6 maintain and develop successful relationships with the Chairs of portfolio
businesses and to offer mentoring where appropriate; and
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19.7 maintain and develop robust relationships with the Permanent Secretaries and
senior Government Officials of HM Treasury, the Cabinet Office, and No.10.
20. I consider that this document accurately reflects my remit as Chair, and would
add that:
20.1. In the exercise of my role I (and the rest of the ShEx Board) would have regard
to the fact that Government ALBs such as POL had policy considerations to
take into account, rather than just commercial factors. For example, if POL
was simply a commercial business it would likely have closed a significant
number of branches which were not profitable. However, the geographical
reach of the Post Office network is of fundamental importance to the
Government, and its funding of POL is closely linked to POL’s assurances to
maintain a minimum number of sites;
20.2 In addition, I and the rest of the ShEx Board would advise the executive on (i)
strategies of the companies in the portfolio, such as POL’s 5-year strategy and
mutualisation proposal; (ii) other asset specific issues; and (iii) remuneration
and appointment of senior individuals of companies in the portfolio. Asset-
specific issues for the Board’s attention would generally have been flagged by
the ShEx CEO, usually in the CEO’s report to the Board.
20.3 In terms of my meetings with others, this would include:
20.3.1 twice a year with the chairs and CEOs of the ALBs — this included the
POL Chair and CEO;
20.3.2 quarterly with the ShEx representatives on the boards of the
companies in the portfolio. These discussions included covering any
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outcomes from the discussions with the Chair of the company, and
also whether the Chair had any issues with the ShEx representative
on the board. I do not recall Alice Perkins, as Chair of POL, ever
raising any such issue with me; and
20.3.3 discussions with the individuals running the ShEx Teams, to the
extent there were issues. To this end I made myself visible as Chair,
and sat out on the office floor to make it clear that the ShEx Teams
could approach me as needed.
21. During my time as Chair, the key priorities for ShEx were (i) the float of Royal
Mail; (ii) the decommissioning of the nuclear site (Sellafield); (iii) the sale of
URENCO; (iv) the set-up of the Business Bank; and (v) the Green Investment
Bank. Each of these matters had huge public interest and significance and
were rightly a key focus of ShEx’s attention. In terms of POL, the focus for the
ShEx Team and its Board would have been the key issues in POL’s 5-year
business plan and the objectives set out within this, mutualisation, and
Government funding.
22. I cannot recall anything specific, relating to POL, other than the 5-year plan,
mutualisation, and funding, being raised by the ShEx Team or the ShEx CEO
to the ShEx Board. ShEx reviewed Board appointments and remuneration
recommendations for POL. When POL wanted a new remuneration plan, that
came to ShEx and it was reported to the ShEx Board. As far as I am aware,
save for senior roles such as POL’s CEO and board members, ShEx was not
involved in the management of personnel. ShEx was not involved in
contractual management, again, in line with the arms-length approach to POL.
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There were delegated limits of £50million in relation to procurement and
contractual spend. Over that threshold required shareholder approval, but Iam
not aware of any other restrictions. POL also needed to seek approval from
the shareholder if they were proposing spend on items/services that were
outside of their agreed business plan. I cannot recall there being any instance
where there was such a significant change in POL’s strategy that it was felt
that it needed to be raised with the ShEx Board.
23. I did not have a role in the work within POL to establish an independent board
and prepare for separation. As I have said, I joined as Chair of the ShEx Board
in March 2012, right before POL’s separation from Royal Mail in April 2012.
24. The culture at ShEx was open, with a willingness to lean on any available
expertise. During the Royal Mail switchover period, I recall having in-depth
conversations with Roger Lowe, Director of the ShEx Royal Mail and POL
Team, on a frequent basis, about how things were going. These conversations
focused on the Royal Mail float, with less time spent on POL.
25. lam asked what external oversight there was of the ShEx Board. I recall that
there was a Treasury appointee on the ShEx Board (Jeremy Pocklington).
There was also a variety of reporting to the Secretary of State and to BIS, but
the previous ShEx CEOs who have been called by the Inquiry will be able to
speak to this in more detail.
26. I am asked to address matters that go to reporting and risk structures within
ShEx. These evolved over time, and I understand the evolution of these
matters will be addressed fully by other UKGI witnesses to the Inquiry.
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Internal ShEx structures
27. As I have said above, the ShEx Team monitored the corporate and financial
performance of POL. Each ShEx Team was led by an Executive Director, who
in turn reported to a Director. There were approximately 30 Executive Directors
and four Directors during my time as Chair. The ShEx Team reported to the
ShEx CEO who would determine whether an issue needed to be brought to
the attention of the ShEx Board.
The Shareholder NED
28. One way in which ShEx fulfilled its shareholder function was by taking a seat
on the Board of the Government’s major ALB companies, including POL, as a
Non-Executive Director (the “Shareholder NED’). This Shareholder NED, who
was bound by the same duties as any other NED (as prescribed by the
Companies Act 2006) reported into the ShEx CEO and/or ShEx Team, as
permitted.
28.1 Susannah Storey was the Shareholder NED on the POL Board during my term.
The Shareholder NEDs had a dual role. This means that, on the one hand the
role of the Shareholder NED was to exercise governance over the asset as a
board representative and on the other hand to communicate the day-to-day
Government perspective to the asset (though the Government's key priorities
were already set out in a letter to the Chair of the POL Board), and provide an
additional line of sight to ShEx on issues being raised within the asset. The
Shareholder NEDs were a good liaison back to the Government and were
important to translate the POL Board’s views on key issues back to ShEx. In
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my view, Susannah Storey had influence because of her previous work with
Royal Mail, and her contacts within Royal Mail.
29. In terms of any codes or principles of governance, I do not believe that there
were any specific codes in place over and above the application of the FRC
combined code of corporate governance and the Companies Act 2006. I have
been taken to section 2.1 of the ShEx Handbook (UKGI00044314), which sets
out that it was expected all ShEx assets would comply with the FRC combined
code of corporate governance. This accords with my recollection. The ShEx
Handbook also contained principles which the Government expected ALBs to
adhere to, including that governance should reflect commercial best practice
and there should be an open and honest dialogue between the ALB and
Government as shareholder. This accords with my understanding.
30. Taking into account that (a) the ShEx Team monitored POL’s strategy and
milestones against POL’s business plan, and fed into internal and
Departmental reporting; (b) the company’s Chair met with the ShEx Chair twice
a year, as well as meeting with the Ministers and others; (c) the POL Chair
would meet the ShEx CEO periodically; and (d) the Shareholder NED sat on
the POL’s Board, I believe that there was a governance structure in place that
provided an appropriate level of oversight of POL.
Knowledge of relevant issues
31. At the time of joining ShEx, I had no knowledge or understanding of:
31.1. the Horizon system, its integrity or remote access. During my term, I do not
recall this information ever being brought to my attention formally or at a Board
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meeting. I have been shown the ShEx Board minutes for March 2012 — July
2014 (referred to at paragraphs 31.1.1 - 31.1.15 below) and do not believe
there is reference to Horizon issues in those minutes. I believe the following
minutes accurately record the Board meetings.
31
31.1.
31.1,
31.1,
31.1.
31.1.
31.1.
31.1.
31.1.
31
31
31
31
31
31
1.4
-1.10
1.11
1.12
1.13
1.14
1.15
minutes dated 7 March 2012 (UKGI00045852);
minutes dated 8 May 2012 (UKGI000167 11);
minutes dated 11 July 2012 (UKGI000167 12);
minutes dated 12 September 2012 (UKGI00016746);
minutes dated 21 November 2012 (UKGI00016747);
minutes dated 16 January 2013 (UKGI00016728);
minutes dated 13 March 2013 (UKGI00016729);
minutes dated 16 May 2013 (UKGI00016756);
minutes dated 9 July 2013 (UKGI00016748);
minutes dated 11 September 2013 (UKGI000167 16);
minutes dated 13 November 2013 (UKGI00016741);
minutes dated 15 January 2014 (UKGI00016732);
minutes dated 19 March 2014 (UKGI00016749);
minutes dated 21 May 2014 (UKGI00016717); and
minutes dated 16 July 2014 (UKGI00016718).
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31.2. complaints made by SPMs as to the integrity of the Horizon IT system. I recall
during one of my bi-annual meetings with Alice Perkins, her mentioning, almost
as a passing comment, that there were a small segment of difficult SPMs and
ongoing difficulties with the union. I have no recollection of her providing any
more detail than that, and so cannot say whether she was referring to Horizon
issues, but as I understood from her, these were simply business as usual
issues. I do not recall any other conversations with Ms Perkins or anyone else
relating to complaints made by SPMs.
31.3. the investigation and prosecution of SPMs for theft, fraud and false accounting.
I do not recall the ShEx Team and/or the Shareholder NED on the POL Board
ever raising the issue of prosecutions to the ShEx Board or to me personally.
Upon reflection, I would have expected the POL Chair to have brought this
matter to my attention during one of our bi-annual meetings, because
conducting prosecutions is such a significant step with such serious
consequences for the SPM being prosecuted; she did not. Knowing now about
this, I consider that criminal prosecutions are such a serious issue that the
ShEx Board should have been aware of this.
31.4. who was responsible for (a) the investigation of those alleged offences; (b) the
decision on whether to prosecute those matters; and (c) the conduct of those
prosecutions. As I have explained at paragraph 31.3 above, I had no
knowledge of prosecutions before or during my term as Chair.
32. Given the passage of time, I cannot recall exactly when (a) I became aware of
those matters referred to in paragraph 31 ; (b) I learned about the Second Sight
report; or (c) I learned that Deloitte had been instructed to undertake a further
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review of the Horizon system. During my tenure as Chair I do not recall seeing
the Second Sight report; it was not brought to the attention of the ShEx Board
or otherwise shown to me.
Actual Oversight
33. I have been asked by the Inquiry to consider the following documents:
33.1 the presentation on POL Summary dated February 2012 (UKGI00018222). I
do not recall seeing this document, either at the time or subsequently, prior to
my preparation for this witness statement. I not that this document is dated
prior to my start date as Chair of the ShEx Board;
33.2 the ShEx presentation on POL Quarterly Review dated April 2012
(UKGI00041969); the ShEx presentation on POL Quarterly Review dated
August 2012 (UKGI00001439); the ShEx presentation on POL Quarterly
Review dated September 2012 (UKGI00001444); and the ShEx presentation
on POL Quarterly Review dated June 2013 (UKGI00042011);
33.3. the ShEx presentation on POL Annual Review dated November 2012
(UKGI00042676) and the ShEx presentation on POL Annual Review dated
December 2012 (UKGI00017385); and
33.4 the ShEx review of POL dated April 2012 (UKGI00042607).
34, My recollection is that the above documents were not included in the Board
packs for the ShEx Board. This is supported by the fact the minutes of the
ShEx Board meetings listed in paragraph 31.1 above do not reference these
documents.
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35. It is important to remember the context of how many ShEx assets there were
in the portfolio. The ShEx CEO would present the CEO’s report to the ShEx
Board, which would contain the asset-specific issues which were important for
the ShEx Board to be aware of and/or advice. Occasionally I recall that the
ShEx CEO would give more detailed presentations to the ShEx Board on
asset-specific issues. I would not have expected to see quarterly reviews or
annual reviews of the assets as a matter of course, as we would not have
needed to know the level of detail in quarterly reports and annual reports
unless there was a specific issue raised by the ShEx CEO.
36. In addition, I have been referred to the following communications, which I was
not copied to, and do not recall otherwise being drawn to my attention:
36.1. email exchange between Mike Whitehead and Chris Darvill on 9 March 2012
(UKGI00001406);
36.2 summary report on the current status of the Horizon litigation, attachment to
the above document (UKGI00013652);
36.3. email from Martin Humphreys to Mike Whitehead dated 12 March 2012
(UKGI00001407);
36.4 letter from Stephen Hepburn MP to Edward Davey MP dated 24 February 2012,
attachment to the above document (UKGI00001408)
36.5 emails from Mike Whitehead on 22 June 2012 (UKGI00001424);
36.6 brief to Norman Lamb MP for meeting with Alan Bates dated 27 June 2012
(UKG100039486);
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36.7 brief to Jo Swinson for meeting with Alice Perkins and Paula Vennells dated
17 September 2012 (UKGI00041975);
36.8 emails between Mike Whitehead and Mike Granville on 21 September 2012
(UKGI00001456);
36.9 email from Mike Whitehead to Swinson MPST on 4 October 2012
(UKGI00001457);
36.10 note summarising the position with the Horizon issues dated 4 October 2012
(UKGI00001458) and letter from Jo Swinson to Dr John Pugh dated 17
September 2012 (UKGI00001459), attachments to the above document;
36.11 draft email from Mike Whitehead to Jo Swinson re Freedom of information
request 12/1362: proposed Section 36 exemption regarding Ministerial briefing
(UKG100018248);
36.12 email chain between Mike Whitehead and Angela Balakrishnan dated 8 July
2013 (UKGI00019355);
36.13 email from Richard Callard dated 20 February 2014 (UKGI00002191); and
36.14 email from Richard Callard dated 25 March 2014 (UKGI00002221).
37. These documents at paragraph 36 above are within the standard operational
relationship between ShEx, POL, and BIS. As is evident from these documents,
the role of the ShEx Team means that in circumstances where a Minister has
a question, the ShEx Team assists the Minister directly and co-ordinates with
POL to obtain the answers. The ShEx Board is not involved, unless it is a
matter which requires the ShEx Board’s advice or attention. If the issues being
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raised by SPMs with Horizon, and the associated Ministerial complaints, had
been flagged as a significant issue by the ShEx Team, I would have expected
to have sight of it.
38. As is evident from these documents, the messaging from POL through the
ShEx Team was that there was not a significant issue, because POL’s view
was that Horizon was robust, and that POL was doing everything it should be
doing to address, including by way of the Second Sight review. Moreover, as
is evident from these documents, the ShEx Team considered this was an
operational issue for POL.
39. I have been asked to consider the minutes of the POL Board meeting on 23
May 2012 (UKGI00019348), and in particular section POLB12/60. I do not
recall seeing this document either at the time or subsequently, prior to my
preparation for this witness statement.
40. I have been asked to consider the minutes of the POL Board meeting on 31
October 2013 (UKGI00019292) and the ShEx presentation on strategy
discussion with ShEx Team dated March 2014 (UKGI00002225). I do not recall
seeing these documents either at the time or subsequently, prior to my
preparation for this witness statement. I note that these documents show that
the number of SPM cases had grown to 150. Whilst POL might have had a
robust view on Horizon, and 150 cases is a small proportion of the total number
of SPMs, and total number of accounting transactions undertaken in Horizon,
it is a big enough number in its own right, that I would have wished this matter
to have been brought to my attention, as the issue was clearly getting bigger
and could get worse.
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41. I refer to paragraph 31 above;
41.1 I cannot explain the extent to which ShEx oversaw (i) the conduct of
prosecutions by POL or Royal Mail Group; (ii) ShEx’s oversight of POL’s
investigation and response to allegations made by SPMs concerning the
reliability of the Horizon IT system; or (iii) ShEx’s involvement with POL's
response to the Justice For Subpostmasters Alliance, as the ShEx Board had
no oversight on these matters.
41.2 I cannot explain the extent to which ShEx oversaw (i) the Second Sight
investigation; (ii) the Initial Complaint and Mediation Scheme; or (iii) plans to
amend Second Sight’s terms of engagement. These matters were not raised
to the ShEx Board.
42. Responsibility for matters of sufficient significance that the shareholder’s
involvement was required would have ultimately been the responsibility of the
Secretary of State, assisted by the relevant ShEx Team (as described above).
I have explained above my responsibilities as Chair, but would note here that
the ShEx Board had the power to challenge the ShEx CEO if they were not
performing adequately and could in extremis recommend their removal to the
Secretary of State. I am accountable in that regard as Chair of the ShEx Board.
43. I have considered the ShEx Policy and Management Board Portfolio dated
May 2011 (UKGI00043224). Following POL’s separation from Royal Mail its
status was raised to priority level. POL had been a division of a major asset,
and now it was a major asset in its own right, receiving substantial levels of
funding from the government and so it was wholly appropriate for ShEx to take
a more direct role in its governance.
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44. I have considered the ShEx presentation on POL Quarterly Review dated
August 2012 (UKGI00001439). I cannot tell from this document what work by
ShEx is being referred to. It was the role of the ShEx Team to monitor the
progress of POL's plans, as they did for all assets.
45. I have been asked whether the ShEx Board were informed or had knowledge
of the following matters:
45.1 the existence of bugs, errors, or defects in the Horizon IT System;
45.2 the Helen Rose report / Lepton report (POL00022598);
45.3. Second Sight’s Interim Report and/or the content of the same (POL00029650);
45.4 Simon Clarke’s advice of 15 July 2013 and the content of the same
(POL00006357);
45.5 Simon Clarke’s advice of 2 August 2013 and/or the content of the same
(POL00129453);
45.6 —_Linklater’s advice on the Mediation Scheme and/or content of the same
(POL00107317);
45.7 Deloitte’s Project Zebra report and/or the content of the same (POL00028069);
45.8 That Fujitsu could insert data in branch accounts without the consent of
subpostmasters;
45.9 That Fujitsu may be able to, under certain circumstances, delete and replace
Horizon audit files containing transaction data;
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45.10 POL’s plans to amend Second Sight’s terms of engagement following July
2013; and
45.11 POL’s plans to amend the Mediation Scheme in 2014.
46. The matters and documents referred to at paragraph 45 above were not raised
with the ShEx Board. What information is passed to the ShEx Board is
dependent on what ShEx Team and the ShEx CEO deem to be an issue that
required the attention or advice of the ShEx Board. It is now clear that the
documents referred to raised serious issues in relation to the functioning of the
Horizon system, and the prosecution and treatment of subpostmasters. I think
that both ShEx and the Board should have been made aware of these very
significant matters. That would not necessarily mean having each of the
documents referred to being provided to the ShEx Board. The important thing
would have been for the issue to be communicated to the ShEx Board, with
the underlying documents available to the ShEx Board on request.
47. For completeness, I should add that I recall a conversation with Richard
Callard in which he referred to Deloitte having been instructed to conduct a
review to give assurance in respect of concerns raised in Parliament. I recall
saying to him that I had experience of Deloitte, and would recommend them.
Resignation
48. In 2014, after my two-year term as Chair of ShEx had been extended by six
months, I resigned from ShEx to concentrate on my other Non-Executive roles
at Old Mutual and Bank of Ireland. There was no connection between my
resignation and any POL-related issues.
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General
49. I have been asked to comment if there was anything I would have handled
differently with hindsight, in relation to the oversight of POL. My answer to this
is necessarily limited by the fact that I was unaware of the Horizon/SPM-related
issues referred to. That said, I do have reflections on the following actions I
could have taken which, had I done so, may have helped surface these issues
to the ShEx Board.
50. I believe that it could have been helpful for ShEx Board packs to have a
schedule of significant issues raised in Parliament relating to Government
assets where ShEx handled the shareholder role. Significance could be
defined broadly by reference to the financial implications of the issue, or the
wider public interest. This would provide the ShEx Board with an additional
opportunity to have sight on such issues, as a mitigant to important issues
raised by Ministers not having been brought to the ShEx Board’s attention
through other channels. I would like to have introduced, or at least explored,
this initiative whilst I was Chair of ShEx.
51. In addition, I would like to have raised as a query at ShEx Board level the way
in which ShEx Teams received and challenged information received from
Government assets, as I believe it is now clear that there were deficiencies in
information flow within POL and up to ShEx. This did not occur to me at the
time, and as I have said I was not close to the detail of how ShEx Teams
interacted with Government assets. Nonetheless, I regret having not given
thought to this issue in my role as Chair of ShEx.
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Statement of Truth
I believe the content of this statement to be true.
Signed:
Dated: 12June___ 2024
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Index to the Witness Statement of Patrick O'Sullivan
No. URN Doc Description Control Number
1. WITN10770100 I First Witness Statement of Mr I WITN10770100
Charles Donald dated 19
February 2024
2. UKGI00041953 I ShEx Board’s Remit dated
August 2010 and Shareholder I UKGI050848-001
Executive Terms of Reference
dated October 2009
3. UKGI00045855 I Letter of Appointment of I UKGI056820-001
Patrick O’Sullivan as Chair of
the ShEx Board
4. UKGI00044314 I ShEx handbook on corporate
governance, management, I UKGI053038-001
and incentivisation dated 2007
5. UKGI00045852 I Minutes of the ShEx Board I UKGI056816-001
dated 7 March 2012
6. UKGI00016711 Minutes of the ShEx Board I UKGI011523-001
dated 8 May 2012
7. UKGI00016712 I Minutes of the ShEx Board I UKGI011524-001
dated 11 July 2012
8. UKGI00016746 I Minutes of the ShEx Board
dated 12 September 2012 UKGI011558-001
9. UKGI00016747 Minutes of the ShEx Board I UKGI011559-001
dated 21 November 2012
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10. UKGI00016728 I Minutes of the ShEx Board I UKGI011540-001
dated 16 January 2013
11. UKGI00016729 I Minutes of the ShEx Board I UKGI011541-001
dated 13 March 2013
12. UKGI00016756 I Minutes of the ShEx Board I UKGI011568-001
dated 16 May 2013
13. UKGI00016748 I Minutes of the ShEx Board I UKGIO11560-001
dated 9 July 2013
14, UKGI00016716 I Minutes of the ShEx Board I UKGI011528-001
dated 11 September 2013
15. UKGI00016741 I Minutes of the ShEx Board I UKGI011553-001
dated 13 November 2013
16. UKGI00016732 I Minutes of the ShEx Board I UKGI011544-001
dated 15 January 2014
17. UKGI00016749 I Minutes of the ShEx Board I UKGI011561-001
dated 19 March 2014
18. UKGI00016717 I Minutes of the ShEx Board I UKGI011529-001
dated 21 May 2014
19. UKGI00016718 I Minutes of the ShEx Board I UKGI011530-001
dated 16 July 2014
20. UKGI00018222 Presentation on POL I UKGI028229-001
Summary dated February
2012
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21. UKGI00041969 I ShEx presentation on POL I UKGI050864-001
Quarterly Review dated April
2012
22. UKGI00001439 I ShEx presentation on POL I UKGI012253-001
Quarterly Review dated
August 2012
23. UKGI00001444 I ShEx presentation on POL I UKGI012258-001
Quarterly Review dated
September 2012
24. UKGI00042011 ShEx presentation on POL I UKGI050906-001
Quarterly Review dated June
2013
25. UKGI00042676 I ShEx presentation on POL I UKGIO051571-001
Annual Review dated
November 2012
26. UKGI00017385 I ShEx presentation on POL I UKGIO27392-001
Annual Review dated
December 2012
27. UKGI00042607 I ShEx review of POL dated I UKGI051502-001
April 2012
28. UKGI00001406 Email exchange between Mike I UKGI012220-001
Whitehead and Chris Darvill on
9 March 2012
29. UKGI00013652 I Summary report on the current I UKGI024445-001
status of the Horizon litigation,
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attachment to the above
document
30. UKGI00001407 I Email from Martin Humphreys I UKGI012221-001
to Mike Whitehead dated 12
March 2012
31. UKGI00001408 I Letter from Stephen Hepburn I UKGI012222-001
MP to Edward Davey MP dated
24 February 2012, attachment
to the above document
32. UKGI00001424 I Emails from Mike Whitehead I UKGI012238-001
on 22 June 2012
33. UKGI00039486 Brief to Norman Lamb MP for I UKGI048381-001
meeting with Alan Bates dated
27 June 2012
34. UKGI00041975 Brief to Jo Swinson for meeting I UKGI050870-001
with Alice Perkins and Paula
Vennells dated 17 September
2012
35. UKGI00001456 I Emails between Mike I UKGI012270-001
Whitehead and Mike Granville
on 21 September 2012
36. UKGI00001457 —_I Email from Mike Whitehead to I UKGI012271-001
Swinson MPST on 4 October
2012
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37. UKGI00001458 I Note summarising the position I UKGI012272-001
with the Horizon issues dated 4
October 2012
38. UKGI00001459 I Letter from Jo Swinson to Dr I UKGI012273-001
John Pugh dated 17
September 2012
39. UKGI00018248 I Draft email from Mike I VISO0011647
Whitehead to Jo Swinson re
Freedom of information
request 12/1362: proposed
Section 36 exemption
regarding Ministerial briefing
dated 23 October 2012
40. UKGI00019355 I Email chain between Mike I VISO0013160
Whitehead and Angela
Balakrishnan dated 8 July
2013
41. UKGI00002191 Email from Richard Callard I UKGI013005-001
dated 20 February 2014
42. UKGI00002221 Email from Richard Callard I UKGI013035-001
dated 25 March 2014
43, UKGI00019348 I Minutes of the POL Board I VISO00013159
meeting on 23 May 2012
44, UKGI00019292 I Minutes of the POL Board I VIS00013135
meeting on 31 October 2013
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45. UKGI00002225 I ShEx presentation on strategy I UKGI013039-001
discussion with ShEx Team
dated March 2014
46. UKGI00043224 I Policy and Management - I UKGI052835-001
ShEx Board Portfolio
Unit Development dated 5 May
2011
47. POL00022598 Horizon Data Lepton SPSO I POL-0019077
191320 by Helen Rose (v.1
draft)
48. POL00029650 Interim Report into the alleged I POL-0026132
problems with the
Horizon system.
49. POL00006357 Simon Clarke’s advice on the I POL-0017625
use of expert evidence relating
to the integrity of the Fujitsu
Services Ltd Horizon System
dated 15 July 2013
50. POL00129453 Simon Clarke's Advice re: I POL-0134937
Disclosure - The Duty to record
and retain material - Post
Office LTD dated 2 August
2013
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51. POL00107317 Linklaters advice on_ initial I POL-0105625
complaint review and
mediation scheme legal issues
52. POL00028069 Deloitte Draft Board Briefing I POL-0023072
document further to report on
Horizon desktop review of
assurance sources and key
control features
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