A former Web Summit director has claimed Web Summit chief executive Paddy Cosgrave is a “highly egocentric, manipulative, volatile and vindictive individual” who ran the events firm as his own “personal fiefdom”.
In an affidavit in proceedings alleging shareholder oppression, Daire Hickey, who claims he was forced out of the Web Summit firm in 2019, claims Mr Cosgrave “would routinely chastise and demean staff [in particular female staff] publicly and reduce them to tears or place them under an inordinate amount of stress which would leave me having to step in and manage the situation”.
One female employee had a panic attack and fainted in November 2016 due to being publicly chastised by Mr Cosgrave about a number of chairs set up at a company event, he claims.
Another female employee settled a formal bullying complaint against Mr Cosgrave for “a very substantial sum of money”, he alleges.
Mr Cosgrave, he alleges, has maintained “numerous petty vendettas” against business and political figures, and “gratuitous online abuse” of minority shareholders in the company, Tánaiste Leo Varadkar, the media and others, which has potential to seriously detract from the company’s brand and business.
Among the allegations he makes is that Mr Cosgrave “has conducted a campaign of abuse” against businessman Denis O’Brien through his Twitter account, despite having had a close relationship with the businessman in the early years of the Web Summit.
Mr Hickey has alleged a failure to observe corporate governance norms, a concerted strategy to force him out of the company, refusal to comply with a profit share agreement, use of company funds without proper authorisation or oversight and a concerted strategy to damage his reputation.
Allegations denied
The Commercial Court was told on Monday the respondents, including Mr Cosgrave, to the case brought by Mr Hickey’s firm, Lazvisax Ltd, “categorically deny” the allegations. They were given until January next to respond to the claims.
Lazvisax Ltd is owned by Mr Hickey whose company holds a 7 per cent shareholding in Web Summit firm, Manders Terrace Ltd (MTL).
MTL and Proto Roto Ltd, the company through which Mr Cosgrave holds an 80 per cent shareholding in the firm, along with Mr Cosgrave, are respondents to the action, admitted to the fast-track court on Monday.
It follows an earlier separate case by the other minority shareholder, David Kelly, and his firm Graigueridda Ltd.
Mr Justice Denis McDonald said, despite opposition by the respondents over the delay, the Lazvisax case should be admitted to the fast-track court because it appeared Mr Hickey only recently learned of alleged attempts by Mr Cosgrave to destroy his reputation and to undermine his shareholding.
The judge was “unimpressed” by historic allegations made by Mr Hickey, relating to a time when he was an employee and director of MTL, which the judge noted never prompted any action by him in the past.
The judge was conscious the respondents wanted time to deliver a replying affidavit in the circumstances where the allegations were made and the “extraordinary fact” the detail of Mr Hickey’s affidavit was made available to the newspapers in advance.
Bernard Dunleavy SC, for the respondents, had objected to the case being fast-tracked given the delay in bringing it and because most of the allegations were of a historic nature.
Kelley Smith SC, for Lazvisax, argued the more recent allegations were something Mr Hickey knew nothing about because he resigned as a director of the Web Summit firm in 2019.
‘Vituperative attacks’
Mr Hickey, in his affidavit, alleged Mr Cosgrave “demanded nothing less than unsupervised control” of all the affairs of MTL, seeking to run it “entirely for his own benefit and without any oversight from the board or anybody else”. When he or other staff tried to question or contribute to his decisions, Mr Cosgrave launched “vituperative attacks on us”.
Mr Hickey said, by April 2017, he “had had enough” of Mr Cosgrave’s treatment of him and resigned as an employee to pursue other interests but remained on as a director. Mr Cosgrave “refused point blank” to acknowledge his directorship and an email from Mr Cosgrave of April 3rd, 2019 made clear Mr Cosgrave wanted him to resign as a director.
The only company board meeting of which he was notified was fixed for August 16th, 2019, in the middle of his honeymoon, Mr Hickey said. He resigned his directorship the previous day and considered he was “forced out”.
He said he recently learned from Mr Kelly that, following his departure from Web Summit, Mr Cosgrave and Proto Roto had engaged in conduct liable and, in several instances, deliberately directed towards undermining the value of Mr Hickey’s shareholding and “to destroy my reputation”.
