The chief executive of the Web Summit Paddy Cosgrave is alleged to have hacked a rival Irish event company, according to claims in newly-filed court documents.
The accusation is one of many included against Mr Cosgrave in an affidavit filed by Web Summit co-founder Daire Hickey against Manders Terrace, the holding company for the business, which operates tech-focused events.
Mr Hickey who has a 7 per cent stake in Web Summit through Lasvisax Ltd, has begun proceedings against Mr Cosgrave, his entity, Proto Roto Ltd and Web Summit holding company Manders Terrace Ltd.
Gap
In the affidavit, which has been filed in the High Court, it is alleged that Mr Cosgrave admitted hacking Dublin Tech Summit after it sought to fill the gap left by Web Summit’s move to Lisbon.
Mr Hickey said in the High Court documents that he has no idea of how valuable the business is as he has no access to financial information other than abridged accounts filed with the Companies Registration Office.
Mr Hickey, who estimates the Web Summit business is worth between €200 million and €350 million, claims Mr Cosgrave has failed to observe corporate governance norms, engaged in a concerted strategy to force him out of the business and refused to comply with a profit share agreement with his co-founders.
It is also claimed that Mr Cosgrave, the event company’s chief executive, engaged in disreputable conduct that undermined the business and used funds without authorisation or oversight.
Mr Hickey, who alleges Mr Cosgrave sought to coerce him out of some of his shareholding in the company, said he came to realise that his former colleague was a “highly egocentric, manipulative, volatile and vindictive individual”.
He said Mr Cosgrave demands “unsupervised control of all of the company’s affairs, and seeks to run it entirely for his own benefit and without any oversight.
“Mr Cosgrave’s behaviour was and remains entirely unpredictable in terms of how he seeks to manage the company. When challenged or questioned in relation to his conduct, Mr Cosgrave typically reacts with extraordinary vitriol,” he said.
“He will stop at nothing to exact revenge on those who he believes have been disloyal, or who have slighted him in some real or imagined way,” Mr Hickey added.
It is claimed Mr Cosgrave has been “unnecessarily destructive of company business and employee relationships” due to his “explosive temper, which he frequently exercises.” The affidavit says “this has been and continues to be damaging to the company’s business and reputation”.
Mr Hickey alleges that while he did his best to depart Web Summit on amicable terms, he was forced out of the business.
Claims
It is claimed that Mr Cosgrave engaged in other behaviour that was damaging to the company. This included claims the Irish Government had offered Web Summit "hush money", Facebook adverts and posts seen as attempts to coerce potential partners, and "petty vendettas" against politicians and business people, including Denis O'Brien.
Mr Cosgrave is also accused of alienating Andreesen Horowitz, one of the biggest tech-focused venture capital firms globally with over $18 billion in assets under management.
He is also accused of using €50,000 in company funds to have taken a 0.25 per cent stake in Camile Thai and to have spent over €10 million in turning Web Summit into a software company rather than an events business.
Mr Hickey's claims come on the back of a High Court action by another Web Summit shareholder, David Kelly.
Mr Kelly co-founded Web Summit with Mr Cosgrave and Mr Hickey and owns 12 per cent of the business through a company called Graiguearidda Ltd.
In his action, Mr Kelly claims he was oppressed as a minority shareholder of Web Summit and that Mr Cosgrave shut down a potential €200 million deal to sell the business in 2017 without telling his business partner.
The dispute between the founders first arose after Manders Terrace alleged in separate legal proceedings, taken in Ireland and the US earlier this year, that Mr Kelly had breached duty to the company by attempting to secretly use Web Summit’s resources to set up an investment fund with Patrick Murphy for his own personal gain.
Responding to Mr Hickey’s affidavit, a spokeswoman for Web Summit said:
“We reject the baseless claims contained in Daire Hickey’s opportunistic legal action and we note his wholly one-sided version of the circumstances surrounding his exit from Web Summit.”
