Restriction order on two directors upheld

BEING A director of a company involves “real responsibility” and does not amount to being “mere purveyors of votes at the whim of management”, according to the Supreme Court.

Mr Justice Nial Fennelly made the remarks yesterday when upholding a restriction order on two directors who allowed €2.8 million (which should have been paid to creditors here) to be taken from insolvent Irish companies in the Miza pharmaceutical group and transferred to other group companies abroad.

Directors must inform themselves about the business and affairs of companies, and their own duties, in order to discharge their responsibilities, the judge said.

“Even non-executive directors of companies must be increasingly conscious in the times we live in that they cannot be mere ciphers or purveyors of votes at the whim of management.”

The Companies Act 1990 “evinces public concern that directorships involve real responsibility and that persons who do not conform at least to some generally acceptable minimum standards either should not, in the public interest, be permitted or should be restricted in regard to future holding of directorships”.

He was delivering the three-judge court’s unanimous judgment dismissing an appeal by Jack Kachkar and Robert McClellan Carrigan against a 2005 High Court order, under section 150 of the Companies Act, restricting them for a five-year period from acting as directors of companies, except under certain conditions.

Dr Kachkar was chief executive, president and majority shareholder of Miza Inc, a Canadian pharmaceutical company, and Mr McClennan Carrigan was vice-president.

The various arms of the Miza group in Britain, the US and Canada were placed in administration, sold or not active by mid-2003.

The restriction orders were sought by Tom Grace, liquidator of five companies which were formerly part of the Irish Antigen group, which were sold out of examinership in 2001 in a joint venture between the Miza group and the UK group, Goldshield.