Richard Conroy survives move to fire him from Karelian board

Prof Richard Conroy and four other directors survived a second bid to sack them from the board of miner Karelian Diamond Resources on Friday.

Rebel investors in the Irish company, which hopes to mine a diamond discovery in Finland, blame Prof Conroy, his daughter Sorca Conroy, and directors Maureen Jones, Séamus FitzPatrick and Louis Maguire for "zero returns" from Karelian over the last 14 years.

All five directors survived a second attempt to vote them off the board at an extraordinary general meeting of the company’s shareholders in Dublin yesterday. Shareholders with around 60 per cent of the company backed the five board members.

Rebels Alan Osborne, Stephen Grimmer, Martin Doyle and Kevin Taylor failed by roughly the same margin to get elected to the board.

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Prof Conroy was optimistic the dissenting shareholders would not mount a third bid to axe him and his four co-directors as they lost this second vote by a larger margin than the first, held at an egm in July.

He argued that losing 60-40 this time compared with 52-48 at the first meeting made it difficult to justify a third bid to shake up the board.

“I think it’s most unlikely. They have been more resoundingly beaten this time,” Prof Conroy said.

Taking control

The rebels hold around 17 per cent of Karelian. Its chairman said only a small number of other investors back them. He suggested that their campaign was more about taking control of Karelian and its assets.

“Some people could see it as a very nice asset that could be taken over by taking control of the board,” Prof Conroy said.

However, his opponents have argued that he and the other directors have taken €4.1 million in fees of the €7.9 million that Karelian has raised from shareholders for diamond exploration.

The chairman has rejected this, saying board members had actually put €2 million of their own money into Karelian and had invested €1 million more in the business than they have taken in fees.

Prof Conroy predicted yesterday that Karelian would get a mining permit for its property in Lahtojoki, Finland, within months. Lahtojoki is close to regions in Russia where diamonds are mined. Karelian already has a mining concession but must clear further regulatory hurdles before getting the permit.

This would allow the company to carry out feasibility studies needed before it can begin mining. Prof Conroy cautioned that Karelian shareholders face a further wait before mining begins.

“It’s going to take several years. It’s a long slow process, but we have accomplished a lot in getting the mining concession,” he said.

Prof Conroy added that if Lahtojoki does succeed, it would be the only diamond mine in Europe outside Russia.