RYANAIR HAS lost a High Court bid to put resolutions before an Aer Lingus annual general meeting next month aimed at limiting pension fund payments for Aer Lingus workers and securing a €30 million dividend for Aer Lingus shareholders although its directors have recommended no dividend.
Aer Lingus had refused to table the resolutions on several grounds.
It told Ryanair it was not appropriate for Aer Lingus to co-operate with any attempt by its largest competitor to restrain Aer Lingus’ “unfettered freedom” to conduct its business. To do so would constitute a criminal offence under Irish law, Aer Lingus said.
Ryanair, which holds 29.82 per cent of the issued share capital of Aer Lingus and has 3 per cent of total voting rights at the Aer Lingus agm fixed for May 6th, challenged that refusal.
Dismissing the case yesterday, Mr Justice Brian McGovern accepted arguments by Aer Lingus that its directors had recommended no dividend should be paid for the year ended December 2010 and, in those circumstances, Ryanair’s proposed resolution seeking a €30 million dividend payment was an impermissible attempt to circumvent Aer Lingus’ articles of association.
Aer Lingus was entitled to refuse to put that Ryanair resolution before its agm since it was not within the power of Aer Lingus shareholders to declare a dividend exceeding the amount recommended by the directors which, in this case, was zero, the judge said.
He accepted Aer Lingus’ submissions it was entitled to refuse to accept a proposed resolution that stated there should be no further payments to the Employee Share Ownership Trust or any company pension schemes over and above existing defined contribution rates without prior shareholder approval
