Former Smart chief in legal face-offs

A NUMBER of legal actions involving former Smart Telecom chief executive Oisín Fanning arising from the October 2006 buyout of Smart by Smart YuRoE Broadband — a company controlled by businessman Brendan Murtagh — have come before the Commercial Court.

Two sets of proceedings brought by Mr Fanning were admitted to the court yesterday while Mr Justice Peter Kelly also heard Smart Telecom plc intends to bring its own action against Mr Fanning.

Smart says it will allege Mr Fanning breached his fiduciary duties as chief executive of Smart in allegedly unlawfully diverting a corporate benefit of opportunity to his own use — the option to acquire the freehold interest in Smart’s corporate headquarters at Citywest Business Park in Dublin.

Smart will also contend Mr Fanning used Smart Telecom funds to acquire a 25% shareholding in Outpost Property Holdings Ltd, owner of the freehold of the Smart headquarter premises, and holds his legal interest in those shares on trust for Smart Telecom.

Mr Fanning has brought his own proceedings under Section 205 of the Companies Act against Outpost and Smart Telecom Holdings Ltd which were yesterday admitted to the Commercial Court list in addition to proceedings against Brendan Murtagh and others.

In the Outpost proceedings, Mr Fanning claims he is a 25% shareholder in Outpost. He claims Mr Murtagh has caused accounts to be prepared showing Outpost owes Smart Telecom plc some €1.23 million but he denies Outpost owes that sum and has refused to approve the accounts.

In the Murtagh proceedings, Mr Fanning is claiming his severance agreement with Smart was a result of undue influence, breach of duty, misrepresentation or misstatement on the part of Mr Murtagh and his sons, Alan and Fergal, and is claiming damages against all three.

Mr Murtagh and his sons have denied the claims. The proceedings were admitted to the list of the Commercial Court yesterday on the applications of the defendants and with the consent of Mr Fanning.