Petroceltic says Worldview’s egm call is attempt to obstruct board

Exploration firm Petroceltic has claimed before the High Court that the calling of an extraordinary general meeting by its largest shareholder is the latest attempt to obstruct and damage the firm's business.

In proceedings against Worldview International, which through a nominee company holds 29 per cent of Petroceltic, the exploration company seeks an injunction preventing an egm convened for London on October 5th from taking place.

Petroceltic wants the injunction to remain in place pending the final outcome of the dispute between the parties.

In a sworn statement to the court, Petroceltic’s chief executive Brian O’Cathain said Worldview has used social media to post “allegations and attacks” on Petroceltic’s management. He added that the egm, which has no legal status, is part of Worldview’s campaign to obstruct Petroceltic’s board.

The respondents, represented by Michael Cush SC, opposed the application and argued the egm should be allowed proceed.

The application for an injunction is being heard by Mr Justice Henry Abbott.

Barrister Paul Gallagher SC, appearing with Andrew Fitzpatrick BL for Petroceltic, said the proposed egm is “unlawful” and is the fourth such meeting convened by Worldview this year.

Contentious relationship

Mr Gallagher said Petroceltic and Worldview have had “a contentious relationship” over the last 15 months. Worldview has repeatedly and publicly attacked Petroceltic, counsel said.

He said Worldview had put two resolutions before the egm. The resolutions state that the shareholders do not approve of either Petroceltic’s decision to issue senior secured callable bonds announced last June, or of Petroceltic incurring any new borrowings or issuing any new debt securities.

Counsel said the proposed resolutions which concern Petroceltic’s power to borrow money are invalid because they seek to interfere with the exclusive right of the directors to exercise the borrowing powers of Petroceltic.

Mr Gallagher told the court that the resolutions should not be down for consideration at an egm.

Worldview had sought to characterise the resolutions as an opportunity to shareholders to consider, and air their views, on certain actions being contemplated by Petroceltic’s directors.

However it is Petrocletic’s case that Worldview’s attempt to re-characterise the resolutions at the egm runs contrary to public statements by the hedge fund.

Counsel said that Worldview’s intent was to undermine the exercise of the directors’ powers and to prevent the raising of monies by Petroceltic. The passing of the resolutions would cause the company difficulties, create uncertainty and impede the directors in the performance of their obligations.

Mr Gallagher said his client had written to Worldview asking the fund not to convene the latest egm. However Worldview refused to do so, counsel added.

The hearing continues.