Con­roy Gold hid be­hind rules, court told

The Irish Times - Business - - NEWS - BARRY O’HALLORAN

Con­roy Gold’s big­gest in­vestor, Pa­trick O’Sul­li­van, be­lieves the com­pany used its own rules to frus­trate share­hold­ers’ ef­forts to shake up its board, the High Court heard yes­ter­day.

Mr O’Sul­li­van wants the court to over­turn a rul­ing by the gold prospec­tor’s ex­ec­u­tive chair­man, Prof Richard Con­roy, at an ex­traor­di­nary gen­eral meet­ing last month, that votes to ap­point him and two oth­ers as di­rec­tors were in­valid.

Prof Con­roy ar­gued that the mo­tions to ap­point Mr O’Sul­li­van, Ger­vaise Hed­dle and Paul John­son as di­rec­tors did not com­ply with ar­ti­cle 85 of the com­pany’s ar­ti­cles of as­so­ci­a­tion – its rule book – and were in­ef­fec­tive.

How­ever, Mr O’Sul­li­van’s se­nior coun­sel, Jim Cal­laghan, in­structed by so­lic­i­tor Bernard McEvoy, said the com­pany still al­lowed the res­o­lu­tions propos­ing the three as di­rec­tors to go to a bal­lot at the meet­ing.

“It could be that they thought that they had this card – ar­ti­cle 85 – up their sleeve,” he sug­gested.

“When they saw the re­sult of the vote they said: ‘Let’s pro­duce it now.’”

Mr Cal­laghan pointed out that once the re­sult of the bal­lot on the pro­pos­als showed that all three had won by a 57 per cent ma­jor­ity, Prof Con­roy then declared the res­o­lu­tions in­ef­fec­tive.

Join the board

“The way they in­ter­preted ar­ti­cle 85, they in­ter­preted it in a way to frus­trate the wishes of the mem­bers of the com­pany,” he told Mr Jus­tice Max Bar­rett.

He main­tained that the com­pany was not en­ti­tled to do this and that three men should be al­lowed join the board.

How­ever, Prof Con­roy states in an af­fi­davit that his lawyers ad­vised him to put the “non res­o­lu­tions” to the meet­ing and to rule them in­ef­fec­tive if they were passed. Mr O’Sul­li­van owns al­most 29 per cent of Con­roy.

He fears that its board is too big, pays it­self too much and is not de­vel­op­ing the com­pany’s gold finds in Ire­land and Fin­land quickly enough.

The court heard that in the seven years to May 31st, 2016, Con­roy Gold paid its di­rec­tors €4.1 mil­lion in to­tal, 56 per cent of ev­ery­thing it spent.

Mr O’Sul­li­van is also con­cerned that some di­rec­tors are re­lated or con­nected in some way.

Ahead of the meet­ing in Au­gust, he heard that the com­pany was in talks to ac­quire fur­ther as­sets in ex­change for new shares. Such a move would have di­luted his stake and vot­ing rights.

He called for the ex­traor­di­nary gen­eral meet­ing that the com­pany held on Au­gust 4th.

Share­hold­ers voted to oust six of nine di­rec­tors: Michael Power, David Wa­then, Louis Maguire, Sorca Con­roy, Sea­mus Fitz­Patrick and James Jones.

The com­pany re­cently named Karl Kee­gan and Bren­dan McMor­row as di­rec­tors. Mr O’Sul­li­van also wants this re­versed.

Per­sonal in­for­ma­tion

Ar­ti­cle 85 re­quires can­di­dates for Con­roy Gold’s board to con­firm in writ­ing their will­ing­ness to serve as di­rec­tors and pro­vide rel­e­vant per­sonal in­for­ma­tion, in­clud­ing de­tails of their ca­reers.

Prof Con­roy’s af­fi­davit ex­plains that this is to sat­isfy Ir­ish com­pany law. Con­roy Gold main­tains that the three men never pro­vided this in­for­ma­tion, which is why it ruled that the res­o­lu­tions nom­i­nat­ing them were in­ef­fec­tive.

Mr O’Cal­laghan said that all three gave the in­for­ma­tion to the com­pany’s cor­po­rate ad­vis­ers, Al­lenby in London and IBI in Dublin, on July 19th.

They also con­firmed their will­ing­ness to serve as di­rec­tors.

He ar­gued that giv­ing the in­for­ma­tion to the com­pany’s ad­vis­ers – its agents – was suf­fi­cient. Con­roy Gold main­tains that it did not get this as the can­di­dates re­quested that the ad­vis­ers re­frain from shar­ing it with any­one else.

The court heard that in the seven years to May 31st, 2016, Con­roy Gold paid its di­rec­tors €4.1m

PHO­TO­GRAPH: CYRIL BYRNE

Con­roy Gold chair­man Prof Richard Con­roy. Court case hinges on de­ci­sion he made not to ap­point di­rec­tors.

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