Two directors of a Dublin-based mineral exploration firm are to be disqualified from involvement in a company, arising from "blatant disregard" for obligations to file returns for their effectively insolvent business over a three-year period, the High Court has said.
The court will decide later on the duration of the disqualification period for Aventine Resources plc directors John Francis Liwosz and Anthony William Brown.
Lawyers for the Director of Corporate Enforcement (ODCE) and the two men will make submissions at a later hearing concerning the severity of the penalty.
Relief
The directors will be seeking relief from any disqualification on the grounds that some of the deficiencies have been remedied since the case went to hearing earlier this year, their counsel said.
Mr Justice Brian Cregan said he would deal with the matter next month.
In his judgment on the ODCE’s application for disqualification orders, Mr Justice Cregan said it was noteworthy no substantive defence acceptable to the court had been put forward as to why they failed to comply with two previous High Court orders requiring them to file returns to the Companies Office.
This was “an intolerable situation” for the shareholders of the company or possible investors” and the “sole responsibility” for this lay with the two directors, he said.
Aventine, originally incorporated in 1988 as Feltrim Mining plc, and later Minmet plc, is principally involved in exploration, processing and sale of gold, metals, ores and minerals. The firm has been dormant since 2008 and is effectively insolvent but has not been put into liquidation, the court heard.
In affidavits, the two directors said the failure to file returns for 2010 and 2011, and non-compliance with subsequent court orders obtained by the ODCE, were the result of the company’s perilous financial state and lack of money to meet auditor’s fees.
Mr Brown, aged in his seventies, made similar claims and added he was not appointed a director until October 2011. He believed he was naive in accepting that appointment and he had never been paid for that role, he said.
Contradiction
The ODCE argued, among other things, there was an inherent contradiction in the directors’ contention the company had a significant value but did not have sufficient funds to pay for an audit.
There had been repeated promises to comply with their obligations to file returns but they delivered little, the ODCE said.
Mr Justice Cregan said they were in persistent and continuing breaches of not one, but two, High Court orders, amounting to an “extraordinary omission on their parts”.
