Payzone claims it was 'entitled' to fire chiefs

 

Electronic payments company Payzone has argued before the High Court that it was entitled to move this week to dismiss chief executive John Nagle and chief financial officer John Williamson as they no longer enjoyed the confidence of the board.

However the company also accepted that it had not held a board meeting that passed a resolution dismissing the men.

Ms Justice Maureen Clark yesterday continued interim injunctions, granted last Wednesday, restraining the company from treating the two men as dismissed. Both men continue to go to work and carry out their functions.

The company had initially applied yesterday for the order to be lifted and the judge heard several hours of submissions from both sides.

However, after 6pm, and having allowed some time to John Gordon SC, for Payzone, to take instructions on whether to seek an adjournment of the hearing to allow his side to file a reply to issues raised by the men in reply to an affidavit of Payzone chairman Bob Thian, the judge said she would adjourn the injunction hearing.

She said the court had risen on two occasions and she was inclined to think there may be "a hint of disrespect from one side".

Payzone was formed last year from the merger of Mr Nagle's e-payments company, Alphyra, with British ATM company Cardpoint.

Mr Nagle claims Mr Thian is pursuing "a personal agenda" to deflect attention from the underperformance of Cardpoint and to "transfer blame" to Mr Williamson and Mr Nagle.

He has alleged that his purported dismissal by e-mail last Tuesday was "bizarre" and there was "a conspiracy underfoot" by Mr Thian and the other non-executive directors of Payzone.

Both Mr Nagle and Mr Williamson have strongly rejected claims by the company that it has "real" and "serious" concerns about their management of Payzone's affairs. Mr Thian insisted in an affidavit yesterday that it had such concerns.

Mr Gordon accepted yesterday that there had been no board meeting which had resolved to dismiss the men but said all other members of the board had resolved collectively to dismiss them and would have met to ratify a resolution to that effect but they were restrained by the interim orders secured by the men.

Regardless of compliance or non-compliance with the "niceties" of its own articles of association, it was entitled to dismiss both men as they no longer had the confidence of the board, Mr Gordon said.

He said it made "no commercial sense" to grant them a "unique" order allowing them to stay in their posts when they did not have the confidence and support of the board or shareholders.

The crisis caused by the "extreme nature" of the orders sought by both men had led to the suspension of Payzone's shares, counsel said. The market required clarity as to who controlled the company.

Mr Gordon said Mr Nagle had built up an extremely successful company in Alphyra but had agreed in October last to what amounted to a reverse takeover of the company by Cardpoint.

From December last, Mr Nagle was working in "a new world" where he no longer had absolute control over the destiny of the business and he had sought to regain that control.

Earlier, applying to continue the injunctions, Paul Gardiner SC and Eoin McCullough SC, for Mr Williamson, argued that the company had acted in breach of the terms of their clients' contracts and of the articles of association of the company.

Mr Gardiner said the company had no defence in these proceedings and had "simply ignored" its own articles.