The Supreme Court has upheld a High Court decision to grant Mr John McGilligan, a director of Premier International Trading House Ltd (PITH), and Premier International Merchandising Ltd (PIM), an interlocutory injunction preventing his removal from the boards of both companies.

The court also upheld an order that PIM should comply with its obligations pursuant to section 202 (8) of the Companies Act 1990, and make its books of account available for inspection by the officers of the company and other persons entitled to see them. However, the court did not uphold an order preventing PIM from becoming involved in manufacturing.

Mr Justice Keane ruled that if Mr McGilligan was excluded from participation in the board meetings of PIM, and was denied financial information pending the hearing of the section 202 petition, "the asset base of the company could be seriously damaged and the efficacy of the winding-up order to which the plaintiffs may ultimately be entitled significantly affected".

The case was between plaintiffs Mr John McGilligan and Mr James Bowen, and defendants Mr William O'Grady, Mr Peter Thornton, PIM, and Premier International Trading House Ltd (PITH).

Mr McGilligan is the managing director of Business and Trading House Investment Co Ltd, a company which was involved in organising a Business Investment Scheme investment in PITH in July 1989. The investment was worth £600,000. PITH is a wholly-owned subsidiary of PIM. Mr O'Grady is the chairman and chief executive of PIM.

As part of an exercise aimed at finding an exit mechanism for the investors, discussions were initiated with Seamar Ltd, a company which manufactures hotel, amenity, and airline products similar to those marketed by PITH. At the time, Mr McGilligan was a non-executive director of Seamar. He has since ceased to hold that position.

Mr O'Grady and Mr Thornton told the High Court that Mr McGilligan's role as non-executive director of Seamar put him in conflict with his interests as a director of PIM and PITH. For this reason they were entitled to withhold sensitive commercial information from him.

Mr Justice Keane said, according to the text of his judgement, that the presence of Mr McGilligan on the board of PIM and his being afforded access to financial information about the company would not seriously affect the interests of the defendants, given Mr Gilligan's assurance that he is bound by a duty of confidentiality and, in any event, was no longer on the board of Seamar.