Web Summit minority shareholders’ Daire Hickey and David Kelly’s High Court action against the tech conference chief executive Paddy Cosgrave is driven by “greed”, and is an effort to craft “a windfall which they do not deserve”, lawyers for Mr Cosgrave have claimed.
Evidence in five separate actions, brought variously by Mr Cosgrave, Mr Hickey and Mr Kelly against one another, is being heard together at the High Court.
The proceedings are scheduled to run for nine weeks.
Mr Cosgrave is suing Mr Kelly, who owns 12 per cent of the shares in Web Summit, for alleged breaches of his fiduciary duties as a director of the company.
Majority shareholder Mr Cosgrave is, in turn, being sued by Mr Kelly and Daire Hickey, who holds seven per cent of the shares in Web Summit, for alleged shareholder oppression and breaches of a profit-sharing agreement.
On the fourth day of the hearing, Bernard Dunleavy SC, for Mr Cosgrave, said that proceedings brought by Mr Kelly and Mr Hickey are an attempt to avoid a discount on the potential sale of their shares in the tech conference firm.
Mr Dunleavy, who was responding to opening statements delivered in the proceedings by Mr Hickey and Mr Kelly’s counsel, said Web Summit is “big enough and valuable enough” to make the two minority shareholders “millionaires many times over in the morning” if they sold their stakes.
“This is a case driven by greed. Mr Hickey and Mr Kelly invested nothing in this business. They risked nothing for this business. They both, in their separate ways, betrayed this business,” counsel said.
“They want this court to craft for them a windfall which they do not deserve.”
Addressing claims Mr Cosgrove “broke” Mr Kelly through manipulation and undermining, Mr Dunleavy said that in actuality, Mr Kelly “just handles stress badly, and events companies are high-stress business”.
Mr Dunleavy said that Mr Kelly’s “yo-yo inconsistency” – he indicated his intention to resign from the company on several occasions, counsel said – was accommodated by Mr Cosgrove, and he was “constantly welcomed back to the company”.
He submitted that it was not credible for Mr Kelly to then identify Mr Cosgrave as the person who had driven him out of the company.
Derek Shorthall SC, also for Mr Cosgrave, said Mr Hickey was not pushed out of the company due to shareholder oppression, as he alleges – rather, it was because of his own "unbridled greed and duplicitous deeds".
Mr Hickey breached his fiduciary duties, including by working for other companies and earning significant amounts of money while he was a Web Summit director, Mr Shorthall said.
"He only had his own interests at heart," Mr Shorthall told the court. He said that Mr Hickey was a "trojan horse" for other companies, "and benefitted from that".
An investigation carried out by Mr Kelly in 2017, Mr Shorthall said, exposed Mr Hickey’s breach of duties. Following this exposure, he accepted that he would have to resign from the company, he said.
“He accepted his faith,” counsel said. “He was caught with his hands in the company till.”
He said that the extent of Mr Hickey’s alleged wrongdoing was not actually known until the discovery process of the ongoing High Court proceedings.
The case returns next week.
