Conroy Gold used firm’s rules to thwart shareholders, court hears

Prospector’s biggest shareholder wants court to overturn chairman’s ruling at agm

Conroy Gold chairman Prof Richard Conroy. Photograph: Cyril Byrne

Conroy Gold chairman Prof Richard Conroy. Photograph: Cyril Byrne

 

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 on Thursday.

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.

Article 85

“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.

“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.

New shares

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.

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.