A LEGAL action by former Smart Telecom chief executive Oisin Fanning over the conduct of the affairs of Smart is an abuse of court process and is designed to disrupt negotiations that will provide very significant benefits to Smart YuRoE Broadband Ltd, it has been claimed.
Smart Telecom plc had experienced a great deal of difficulty in its trading operations while under the "autocratic stewardship" of Mr Fanning as chief executive, Brendan Murtagh, who described himself as a shareholder in Smart, said.
Those difficulties included unsuccessful bids for the 3G mobile phone licence and for the opportunity to sponsor the RTÉ weather report.
Mr Murtagh rejected all the claims made by Mr Fanning against him and said the failure to get the 3G licence, plus unsuccessful legal action challenging that failure, had had "a catastrophic effect" on Smart's business. By autumn 2006, it was clear Smart had little prospect of survival as a going concern, he said.
Mr Murtagh noted that, in his proceedings, Mr Fanning wants an order cancelling the transaction under which the assets and liabilities of Smart Telecom were transferred to Calally Ltd, which later changed its name to Smart YuRoE (Smart Y). Such a cancellation could mean losses of €60 million in promised investment, he said.
Mr Murtagh and his sons Alan and Fergal claim Smart Y is now carrying on the business formerly carried on by Smart Telecom, which is no longer trading, and that Smart Y is in negotiations with two other "significant players" in the telecommunications market relating to transactions with potentially significant benefits.
The Murtaghs believe this is why Mr Fanning has chosen to bring his action now as the events Mr Fanning complained of had occurred in autumn 2006 or earlier, their lawyer said.
The Murtaghs contend that Mr Fanning's proceedings are bound to fail but also have the potential to frustrate the transactions which would in turn have serious consequences for the business of Smart Y. Smart Telecom is a 10 per cent shareholder in Smart Y and this would have serious consequences for all its shareholders, including Mr Fanning, they said.
In those circumstances, the Murtaghs are to apply to the court to strike out Mr Fanning's petition on the grounds of delay, the fact Mr Fanning himself had approved the acquisition of Smart Telecom and in light of Mr Fanning's motives for bringing the action.
