There is “no question” Paddy Cosgrave knew about an employee’s complaint against his former friend and Web Summit director Daire Hickey, the High Court heard on Thursday, despite his claims that information was concealed from him for several years by his one-time business partners.
Mr Cosgrave’s separate insinuation that Mr Hickey possessed compromising photographs of David Kelly, another former director of Web Summit, and used them for leverage over Mr Kelly, was an “invention”, designed to justify his behaviour towards the minority shareholders in the tech conference company, the civil trial heard.
On Thursday morning, barrister Michael Cush delivered his opening statements in his client, Mr Kelly’s, action against Mr Cosgrave, the chief executive of Web Summit.
Mr Kelly – who is, in turn, being sued by Mr Cosgrave for alleged breaches of his duties as a director of the tech conference company – is suing his former schoolfriend for alleged shareholder oppression and breaches of a profit-sharing agreement.
Both men strongly deny the allegations against them as does Mr Hickey, who is also suing Mr Cosgrave for shareholder oppression and breaches of the profit-share agreement. All five cases are being heard together in a High Court civil trial which began on Tuesday.
Mr Kelly resigned as a director of Manders Terrace Ltd, which trades as Web Summit, in early 2021.
This was around the time that Mr Cosgrave convened an external investigation into a 2016 complaint against Mr Hickey, made by an employee of the business, who alleged Mr Hickey had sexually harassed him at an event in New Orleans.
Mr Hickey vehemently denies the allegations and was not even aware that a formal complaint had been made to the company about the incident, the court heard on Tuesday.
However, Mr Cosgrave had developed a deep animus toward Mr Hickey in the intervening years. This was in part due to the appearance of an unflattering profile of Mr Cosgrave, the court heard, that appeared in the Sunday Independent and for which he suspected Mr Hickey had been a source.
Counsel for Mr Hickey told the court that the Web Summit chief executive used the complaint to “blackmail” and “intimidate him” into giving up his shareholding in the tech conference business.
On Thursday, Mr Cush said that Mr Cosgrave had detailed knowledge of the complaint after it happened in 2016 but had sought to distance himself from it. He then blamed Mr Kelly for mishandling an investigation into the matter.
The court was shown a note of a meeting on December 5th, 2016, between Mr Cosgrave and Mr Kelly and legal counsel in which issues involving Mr Hickey were discussed including the alleged New Orleans incident.
In private conversations with Mr Kelly, also seen by the court, Mr Cosgrave threatened in 2019 to go public with the complaint. When Mr Kelly expressed reservations about Mr Cosgrave’s threat to “blow the whole thing up”, Mr Cosgrave replied: “I’m not sure what the downside is. Unless [Mr Hickey] has emails where you’ve said things you might regret or something.”
Mr Cush said this was the beginning of a campaign to insinuate that Mr Hickey had “kompromat” or compromising material on Mr Kelly, which the court heard related to photographs that were taken on a trip to Singapore.
Mr Cosgrave began publicly and privately referencing “the four floors” incident. Mr Cush said he understands this refers to a place in Singapore known colloquially as “the four floors of whores”, which he said is understood to be four floors in a modern office building “devoted to bars, strip clubs and that kind of thing”.
In a city not known for its nightlife, the venue is a “massive attraction” for tourists, Mr Cush said.
He said the suggestion that Mr Hickey held damaging information over Mr Kelly was “an invention” of Mr Cosgrave’s used to justify his own behaviour towards his former business partners.
The trial continues on Friday when Bernard Dunleavy SC, for Mr Cosgrave, will respond to the arguments made by Mr Kelly’s and Mr Hickey’s barristers this week.
