MANAGEMENT AT investment group One51 has said its lawyers and auditors approved controversial payments that are to be queried at this week’s agm, independent director Ivan Yates has said.
In a letter to dissident shareholder Gerry Killen on July 19th, Mr Yates said some of the information that emerged in the media in recent times was not known previously to him.
Mr Yates, an independent non-executive director since March 2009, said in the letter that it was his understanding that the company was “fully legally compliant”.
The group is due to hold an agm this week where the board is to be asked why 40 per cent of a €4.96 million tax-free royalty payment was paid to nine unnamed executives. The royalties related to a patent for a paint-tin lid developed by a company called Protech Performance, which is owned by One51. The funds are understood to have passed through a number of firms before being paid out.
Mr Yates wrote to Mr Killen in response to a letter written four days earlier to the One51 board in which a list of questions including ones about the patent payments were posed.
“Some of the points in your data and outlined in the media were not previously known to me while others have been discussed at board level,” Mr Yates said.
“I wish to assure you that I and my colleagues treat all of these matters with the utmost importance.” Mr Yates said he understood from management that its legal advisers and auditors had approved the remuneration arrangements that were the subject of controversy and that the company was fully, legally compliant. Mr Yates said he was not on any subcommittee of the board and was replying in an individual and personal capacity.
He said as a former government minister and a chartered director with the Institute of Directors, he wished to emphasise that it was his belief One51 should conform to the highest ethical standards beyond legal obligations, to inspire ongoing investor confidence. “I don’t believe that any member of the board disagrees with this.”
He said all shareholders would be appraised of a detailed response to the questions Mr Killen posed in his letter.
“In some media, the directors of One51 have been depicted as lackeys and sycophants of Philip Lynch . I believe this is unfair and inaccurate.” He said he always sought to assert his independence and to represent shareholders’ best interests.
Mr Yates said given the period during which One51 made most of its acquisitions, it was clear that premium prices had been paid.
He said he would be reluctant to relinquish the potential of the company’s investments in ICG and Irish Pride, which he felt were top-class enterprises with capacities to yield long-term profits. However, he said decisions had to be made with investments where One51 could not get a controlling stake.
