New shares blow for Lord Ashcroft

LORD Ashcroft's financial fortunes have suffered a blow after a lawsuit was filed alleging that the former Tory Party treasurer shortchanged staff at his cleaning and landscaping business in California.

The disclosure of the lawsuit coincided with a new plunge in the price of shares in Carlisle Holdings, the company Ashcroft chairs as a 60% controlling shareholder. He is also chief executive.

Carlisle provides services to companies in America and Britain under the OneSource and LI Group names. Its shares plunged as much as 16% on Friday on news of the lawsuit.

Carlisle's latest share price slide means that his stake, once worth $500m (£325m), is now valued at little more than $100m.

Ashcroft has also suffered paper losses of roughly $250m - or 75%, so far this year on his other major holding, conglomerate Tyco International.

Ashcroft, 55, already faces class action lawsuits in America from shareholders over his role as a Tyco director.

Reports have appeared in the US media that the New York Attorney's office is looking into a Florida property transaction involving Ashcroft.

It has been claimed that he sold a home in Boca Raton's Royal Palm Yacht and Country Club to his wife for a nominal sum.

She is then said to have sold it on immediately to Tyco or one of its executives for $2.5 million in October 1997 in an alleged effort to get round US company laws.

Ashcroft, who ran into criticism for his generous contributions to the Tories while retaining non-British tax status, was a close associate of Dennis Kozlowski, who resigned as chief executive of Tyco in June. Kozlowski faces charges of tax evasion related to art purchases made in New York. He has since been charged with tampering with evidence.

The new lawsuit against Carlisle was filed on behalf of a human resources manager who became aware that the company's OneSource subsidiary in California was allegedly shortchanging employees by not paying them overtime.

'OneSource failed to pay overtime as required and terminated the plaintiff in an effort to conceal OneSource's exposure for the wage violations,' said Santa Ana lawyer Richard Donahoo, who lodged the lawsuit.

'We expect a jury will conclude that this type of corporate misconduct is another example of putting profits before people and that it should not stand.'

No sum was mentioned in the lawsuit, which is seeking punitive damages, back pay to employees, interest and attorney fees.

Neither Carlisle nor OneSource returned our calls.