Conroy Gold’s board pays itself too much, says top shareholder

EGM showdown looms as directors say O’Sullivan’s aim is to take control, writes Fearghal O’Connor

CONROY Gold & Natural Resources is being run in the interest of its board, rather than shareholders, its biggest shareholder has claimed. Patrick O’Sullivan, who owns just over 27pc of the shares, is proposing sweeping board changes at Conroy, which hopes to build Ireland’s first commercial gold mine.

Payments to the board — including fees, share options, pension contributions and other compensation — for the seven years to May 2016 totalled €4.1m, which was an average of 56pc of total operating expenses, said O’Sullivan.

This, he claimed, illustrates how Conroy “is being run in the interests of the board, rather than those of the shareholders.

The nine-member board — which includes five members with “a familial or other relationship” — is “oversized, rewards itself handsomely at shareholders’ expense, does not meet reasonable corporate-governance standards and has no discernible development plan to crystallise value from its potential assets”.

O’Sullivan added: “We are taking action to save the company, reconstitute the board and reposition business operations to follow a commercially-driven strategy and enable the company to raise finance on sensible terms, (that are) protective of existing shareholders.”

AIM-listed Conroy’s shares have tumbled from £11 to below 12 pence. O’Sullivan wants to cut the board to six, with himself and two UK-based industry experts appointed. Chairman and founder Professor Richard Conroy, who owns 22pc, would remain in his position.

O’Sullivan said Conroy had “not invested sufficient shareholder resources into exploration and development. It has been in existence for 22 years and to date it has not delivered a viable mine. It is time for change”.

Outside investors are interested in the company but the board does not “inspire confidence amongst private investors or attract institutional support”, he said.

The company responded to this newspaper with a stock exchange statement that said O’Sullivan’s proposals were not in the best interests of Conroy or its shareholders and that the board unanimously recommended rejection of the resolutions at next month’s EGM.

The board is committed to “the highest standards of corporate governance” and to an appropriate balance of skills, experience and knowledge, it said. The board includes company founders and long-term investors with “a vested interest” in long-term success, it said.

Conroy is at “a crucial stage in its development, with recent positive drilling results enhancing the prospects of the development of its proposed gold mine in Clontibret, Co Monaghan” and has begun a land-acquisition programme to facilitate the mine.

“Against this background, your board regrets that Mr O’Sullivan has requisitioned an EGM at this time. The company believes that the proposed resolutions represent no more than an attempt by him and certain other shareholders to gain control of your company by the back door,” added the statement.