Court hears of dispute between shareholders over $12bn baby milk plan
Powdered milk product had passed stringent Chinese regulatory standards
The president of the High Court, Mr Justice Nicholas Kearns; he urged both parties to continue to take steps to resolve the matter through mediation.
A number of businessmen are in dispute over a company set up to sell baby milk formula to China, the High Court has heard. BM Formula Ltd (BMF) was set up in August 2013 to exploit the $12 billion powdered baby milk market following the relaxation of China’s “one baby policy”.
A key factor in the company’s success was that its product passed stringent Chinese regulatory standards brought in after the 2008 melamine-tainted milk powder scandal in China.
Two shareholders of BMF obtained orders restraining two other shareholders over alleged wrongful conduct, including allegedly trying to sell the product through a Hong Kong-registered company. The claims are denied.
Paschal Bergin and Seán Bradshaw, shareholders in BMF, and their company Holtal Ltd petitioned the court under the Companies Act for an injunction restraining alleged oppressive conduct by fellow shareholders in BMF, Patrick Flanagan and Frans de Ru.
The president of the High Court, Mr Justice Nicholas Kearns, granted orders restraining Mr Flanagan and Mr de Ru from marketing, dealing in, selling or promoting the company’s baby feed formula pending further order. He also ordered Mr Bergin to lodge a €1 million bond in court to meet any judgment for damages in the case.
The order prevents the respondents dealing in, selling, or charging any shares in the firm or, pending further order, from taking any steps to alienate any interest in the milk formula. The respondents consented to the orders.
Mr Justice Kearns urged the parties to continue to take steps to resolve the matter through mediation.Earlier, Gabriel Gavigan SC, for the petitioners, said his clients claimed Mr Flanagan and Mr de Ru entered into an unlawful arrangement to plunder the assets of the company and he wanted orders to maintain the status quo pending full hearing of the matter.
Michael Howard SC, for the respondents, said his side were fully contesting the claims and were also alleging the petitioners themselves had set up a cloned company to hive off the assets of the firm whereby his clients would not derive any benefit from the business.