REBEL SHAREHOLDERS in the Philip Lynch-led One51 investment group have enlisted the support of former Beamish Crawford chief Alf Smiddy and ex-Ibec director of European affairs Peter Brennan in their bid to secure a change in strategy and corporate governance at the business.
The pair, along with former One51 executive Gerry Killen, who is leading the “campaign for change”, will now seek election as non-executive directors at One51’s annual meeting in the Shelbourne Hotel on July 28th.
A majority of shareholders will have to vote in their favour for the trio to succeed in securing seats on the board of One51.
Separately, the dissident shareholders will today submit more questions in relation to the payment of tax-free royalty income to certain executives relating to a patent held by a subsidiary called Protech Performance Ltd.
The payments to executives were made through a network of entities called Chandela.
Details of these payments were first revealed by The Irish Times last Friday. In an article in the Sunday Independent last weekend, Mr Lynch said 40 per cent of a €4.96 million tax-free royalty income had been paid to “as many as nine individuals” in the company.
The rebel shareholders now want “substantive answers” as to who received this money.
In a letter to be sent to chairman Denis Buckley today, Mr Killen will ask him to disclose who the nine beneficiaries are and the amounts they received.
He will also question why these payments were not disclosed to shareholders.
In addition, Mr Killen will seek to discover why an “elaborate structure of companies, including Chandela Investments Ltd and Chandela Nominees Ltd, which sit outside of the control of One51, was put in place to ensure that these payments” were made.
The letter also asks the chairman to disclose where the balance of the €4.96 million currently sits.
The dissident shareholders will also question a redemption of shares by Mr Lynch in 2009.
“Please confirm whether the reduction in Mr Lynch’s shareholding by 114,285 shares in 2009 was as a result of participating in the redemption of shares disclosed at note 35 to the 2009 financial statements,” Mr Killen asks.
“If so, what is the basis and/or commercial rationale for authorising this targeted redemption of Mr Lynch’s shares and those of fellow directors . . . thereby dissipating shareholder funds?”
Mr Killen has queried if the shares were redeemed at €3 each, which would have resulted in Mr Lynch receiving more than €340,000.
“If that is the case, is this included in directors’ remuneration within the 2009 financial statements?” Mr Killen asks.
One51 has stated that the payment of tax-free royalty income was part of normal tax planning and that it all took place within the group structure. A block of 25,000 One51 shares traded yesterday on the grey market at €1.75 each, a new low in recent times.
