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A former Auckland District Health Board member has been accused of a conflict of interest after failing to disclose a financial stake in the company awarded a medical testing contract worth hundreds of millions.
Papers currently before the High Court say pathologist Tony Bierre - then a board member - paid $83,000 for a 16.67 per cent stake in a medical consortium that became Lab Tests, on the same day the board awarded the consortium the $560 million contract.
His investment could have returned Dr Bierre an after-tax figure of "close to $1 million a year", the papers claim.
Diagnostic Medlab - which lost out to Lab Tests to provide medical testing services to the Auckland region - says Dr Bierre in 2005 made recommendations to the board on "laboratory service delivery and configuration in Auckland", while he was seeking board funding for a boutique laboratory of his own.
It alleges he later used his knowledge of the board to get a better deal for Lab Tests, in which he held a 17 per cent share.
Counsel for Medlab, Adam Ross, yesterday told Justice Raynor Asher in the High Court at Auckland that Dr Bierre had consistently worked to "encourage, enhance and nurture" anti-Medlab feeling on the board.
Medlab is challenging the $560 million contract in the High Court, seeking a judicial review of the tendering and decision-making process.
Lab Tests, which says it will cut the number of medical collection points from 80 to 43 and chop staff numbers at the same time, is set to take up the contract on July 1.
Medlab says Dr Bierre from his position of "ongoing, high-level involvement" in the planning of laboratory strategy worked to build a "mindset" that the money paid to Medlab for its services was "grossly unreasonable".
Dr Bierre was elected to the board in October 2004, and appointed to the powerful audit committee in early 2005.
Papers before the court show that in a June, 2005 board meeting, Dr Bierre spoke "forcefully" against a recommendation the board renew Medlab's contract for a further two years to July 1, 2007.
"It is clear from the minutes that Dr Bierre's advocacy sank management's recommendation for the extension to [Medlab's] contract ..." the papers claim.
Medlab does not accuse Dr Bierre of any illegal activity, but says the board acted in bad faith when it:
* Allowed Dr Bierre to use information gained as a board member for the purposes of obtaining a personal benefit;
* Allowed Dr Bierre and Lab Tests to obtain, or appear to attain, an improper advantage.
Medlab says Dr Bierre, in 2006, used his inside knowledge of board workings to market himself to Healthscope, a financial backer of Lab Tests.
Dr Bierre resigned from the health board in August last year.
