THE HIGH Court has reserved judgment on an application by former Smart Telecom chief executive Oisín Fanning for permission to bring a legal challenge to the October 2006 buyout of the company by businessman Brendan Murtagh.

While disputing some of the factual claims by Mr Fanning, Smart Telecom has adopted a neutral position on the application by Mr Fanning for permission to bring a derivative action on the buyout, which is an action in circumstances where a company itself has not challenged the disputed decision.

Brendan Murtagh, of Dunheeda, Kingscourt, Co Cavan, and his sons Alan and Fergal, all of whom are respondents to the proceedings, claim Mr Fanning's action should be struck out as opportunistic.

They claim Mr Fanning is attempting to derail highly sensitive discussions related to a possible sale of Smart Yuroe Broadband.

In October 2006, Smart Telecom was bought out by Mr Murtagh in a deal that involved him taking on Smart's €50 million liabilities and giving Smart a 10 per cent equity share of Smart Yuroe Broadband.

Mr Fanning initiated his proceedings last April. The three-day hearing concluded at lunchtime yesterday and Ms Justice Mary Irvine reserved judgment. She said she hoped to give her decision next month.

Mr Fanning has alleged unlawful and oppressive conduct of the affairs of the company by Mr Murtagh and others.

Mr Murtagh has denied he controlled either the board or a majority of shareholders in the company at any time and also said he did not believe he was a shadow director of the company.

Smart chairman Kyran O'Dwyer said in an affidavit that Mr Fanning's claim that Mr Murtagh effectively controlled the company by 2005 was difficult to reconcile with a 2004 certification by the directors, including Mr Fanning, that no person exercised any control over the board.