Shareholder’s case against Conroy Gold adjourned after discussions

A High Court action by a minority shareholder in a gold-mining company has been adjourned generally following discussions between the parties.

Lawyers for Conroy Gold and Natural Resources plc also said on Friday that claims in court earlier this week by Patrick O'Sullivan that the directors paid themselves €4 million over a seven-year period were "misleading" as, over that period, they were paid a total of €900,000.

Directors have also taken a number of measures to support the company, including providing unsecured loans and not cashing in share options, Brian O’Moore SC, for the company, said.

The court was told earlier this week that Mr O’Sullivan, Howth Road, Dublin, intended to bring proceedings under the Companies Act against the company alleging oppression of him as a shareholder. It was also told he had concerns about corporate governance and remuneration of board members.

The company was established in 1995 by Prof Richard Conroy to find gold deposits in Northern Ireland and northern Finland and has a nine-member board chaired by Prof Conroy.

Mr O’Sullivan acquired shares in the company in autumn 2009 and now holds a 28 per cent stake but is not a director.

Interim orders

On Thursday, his lawyers applied for interim orders against the company arising from Mr O’Sullivan’s apprehension the board was contemplating measures to dilute the current members’ shareholdings before an extraordinary general meeting on August 4th with a view, it was claimed, to defeating his resolutions.

Those resolutions included a proposal to remove six directors from the nine-member board and create a “streamlined” six-member board including three new directors.

When the case returned before Mr Justice Tony O’Connor on Friday, he was told by Jim O’Callaghan SC, for Mr O’Sullivan, that the case could be adjourned generally, with liberty for both sides to re-enter should the need arise.

Brian O’Moore SC, for the company, said the parties had agreed no further shares in the company would be issued between now and the proposed egm. There would be no dilution of the plaintiff’s shares before that meeting, counsel added.

Counsel said Mr O’Sullivan’s proceedings are misconceived and his side wanted to put a number of things in the public domain following media coverage of the case.

‘Misleading’

The claim the directors paid themselves €4 million over a seven-year period was “misleading” as, over that period they were paid a total of €900,000, counsel said. They had also taken steps to keep the company afloat including not cashing in share options in the company which they were entitled to do and had further supported it by way of unsecured loans totalling €3.1 million.

Mr O’Callaghan said it was disputed the action was misconceived but, in light of the agreement between the parties, there was no need to argue such points.

Mr Justice O’Connor welcomed the fact the sides had come to an arrangement and adjourned the case generally.