Kingspan to suspend Murtagh's sons

The two sons of Mr Brendan Murtagh, who resigned as a director of Kingspan following revelations of possible insider share dealings by people connected with him, "will be suspended" from their positions in Kingspan, a spokesman has told The Irish Times.

The "suspensions" will take effect from January 1st, and will be "indefinite", he said.

The sons, Mr Alan Murtagh, and Mr Fergal Murtagh, both aged in their 20s, are in junior management positions; one is in the building products business and the other is in the insulation division.

The share dealings were in a targeted takeover company, Hewetson plc, which this week received a bid of £37.1 million from Kingspan. That represents 200p sterling per share.

The dealings in Hewetson shares were made in the name of the wife of one of the sons and in the name of a close friend of the other son, after Kingspan had begun due diligence and signed a confidentiality agreement with Hewetson. On November 24th, 20,000 shares in Hewetson were purchased in the name of Ms Nicky Shiers, the wife of Mr Alan Murtagh, at 137.5p sterling per share. On the following day, 13,000 shares in Hewetson were purchased in the name of Ms Kathryn McFadden, a close friend of Mr Fergal Murtagh, at 142p per share. Kingspan on Wednesday explained that on the evening of November 25th, the board of Hewetson agreed to further discussions which took place on November 26th at which terms were agreed. After he became aware of the share deals Mr Brendan Murtagh advised his sons to arrange for the shares in Hewetson to be sold.

Ms McFadden sold her holding on November 30th at 130p per share, incurring a loss of £1,560. However, Ms Shiers sold her holding much later, on December 8th at 144p per share, making a profit of £1,300. The spokesman was unable to explain the delay in that sale.

Mr Brendan Murtagh, who retains his executive position with responsibility for group marketing, explaining his resignation, said he could have been "responsible for a breach of confidentiality". However, Kingspan has said while he "may inadvertently have disclosed confidential information to his sons, he did not encourage them to deal in Hewetson's shares, nor did he envisage that they would do so". Also, Kingspan stressed that Mr Brendan Murtagh "did not act dishonestly".

The London Stock Exchange is investigating the share transactions. If it considers there is a case to answer, details will be sent to the British DTI which can bring criminal proceedings in the event of insider trading.