It seems clear that Conroy Gold executive chairman Richard Conroy is considering appointing more directors to its board, which lost six members at an extraordinary general meeting (egm) earlier this month.
The vote was one of those passed at the meeting called in response to concerns raised by 28 per cent shareholder Patrick O'Sullivan. His lawyers indicated to the High Court this week that they believed the company was considering appointing new directors.
Following that hearing, Prof Conroy said in a statement: “In light of the fact that six directors, including the finance director, had been removed from the board of the company at the recent egm, the company is taking appropriate steps to strengthen the board.”
Mr O'Sullivan's problem is that at the same egm, the company ruled that resolutions appointing him, Gervaise Heddle and Paul Johnson, to the board were invalid. He wants the courts to review this ruling.
Litigation
He is also concerned that new directors could be appointed without consulting him and the others appointed under the resolutions that are the subject of the latest round of litigation between him and Conroy Gold.
Prof Conroy’s statement is explicit. The most likely way of strengthening any board is to appoint new directors. Possibly his argument is that it is not right for a public company, such as Conroy, to carry on with a board of just three people, particularly if it is lacking a finance director.
On that basis, he can maintain that he has little or no choice but to go ahead and appoint directors in a reasonable period of time, as the company could not go on with the reduced board indefinitely.
Mr O’Sullivan on the other hand believes that he and the others were validly appointed and so Prof Conroy should not be appointing anyone else without first consulting them. The latest round of litigation effectively turns on the validity or otherwise of their appointment. Until that is concluded, the board seems set to remain as it is now.
