Commercial Court hears claim Web Summit co-founder and RTÉ board member earned ‘secret’ €328,000

Web Summit chief executive Patrick Cosgrave has alleged in the Commercial Court that one of his co-founders earned €328,000 for “secret” consultancy work while still a director at the tech conference firm.

Public relations work conducted by Daire Hickey for third parties was at the “direct expense” of Web Summit, as it involved the disclosure of its confidential information, such as speaker lists and confidential contact details of clients, Mr Cosgrave claims.

Mr Hickey, who is now a public relations adviser and RTÉ board member, did not seek company permission to enter into a 2015 contract with Boston Consulting Group Digital Ventures (BCG) to provide public relations services that were “intimately connected” with his role in Web Summit, Mr Cosgrave alleges.

The contract and surrounding information were uncovered from documents shared as part of pretrial discovery, claims Mr Cosgrave, and shows Mr Hickey went to “significant effort” to keep the consulting contract secret from the events company.

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The Web Summit chief laid out the fresh allegations in a sworn statement to the court in which he seeks to expand upon the defence filed by Manders Terrace Limited, which trades as Web Summit, in an action brought by Mr Hickey’s commercial vehicle Lazvisax Limited.

Mr Hickey, a 7 per cent shareholder in Web Summit, claims in his case that Mr Cosgrave and his entity Proto Roto Limited engaged in oppressing his rights as a minority shareholder.

The case is among a series of suits and countersuits between Mr Cosgrave and the two other Web Summit co-founders: Mr Hickey and David Kelly, a 12 per cent shareholder. The claims in all of the cases are denied and vigorously contested all round.

Web Summit issued proceedings against Mr Kelly in September 2021 alleging breaches of fiduciary duties, misrepresentation and co-opting commercial opportunities.

Mr Kelly, Mr Hickey and their shareholding entities later filed separate actions against Mr Cosgrave and the company alleging oppression of shareholders’ rights.

At the Commercial Court on Monday, Bernard Dunleavy SC, representing Manders Terrace and Mr Cosgrave, said the parties between them have eight motions before the courts, six of which are requests for more extensive discovery of documents. His motion seeking to amend a defence is the “most serious”, he said.

Kelley Smith SC, for Mr Hickey and Lazvisax, said she does not yet have instructions, but she does not expect there will be a dispute about the request to amend the defence

Mr Justice Denis McDonald adjourned the various motions to a later date.

Further in his affidavit, which the judge noted he had read, Mr Cosgrave claims Mr Hickey communicated with BCG in a “covert manner”, using non-company email accounts, and discussed “sensitive, proprietary” information, including Web Summit negotiating strategies.

He alleges Mr Hickey negotiated favourable pricing for BCG and placed its interests ahead of those of its competitors and Web Summit. This includes relaying unfavourable and false pricing to BCG’s competitors for sponsorship, Mr Cosgrave claims.

Mr Hickey was instrumental in negotiating the terms of a sponsorship agreement between BCG and Web Summit in 2016 worth US$80,000, which, Mr Cosgrave says, was a discount of some 75 per cent on Web Summit’s fixed price.

This was a “direct loss” to the company and exposed it to “enormous reputational damage”, Mr Cosgrave claims. He further alleges BCG received about €210,000 in discounts between February 2016 and August 2017 through Mr Hickey’s intervention. All the while, says Mr Cosgrave, Mr Hickey was paid by BCG on an almost monthly basis, receiving about €205,000 by 2017.

Mr Cosgrave also alleges Mr Hickey engaged in other public relations consulting with several other firms and used Web Summit contact lists to secure speakers for a motorsport festival on behalf of another company.

Mr Cosgrave said he and Manders Terrace want to rely on the new details of “secret profiteering” as reasons for disentitling Mr Hickey to the orders he seeks in his case.