ELST, a company whose “driving force” was described by a judge as manager and controller Ronnie Wilson, must buy out the shareholding of Donegal Investment Group plc (DIG) without discount.
The decision follows a number of hearings over DIG claims that it was excluded from the affairs of the company following acts of oppression by the majority shareholders.
DIG sought orders under Section 205 of the Companies Act directing ELST to buy out is minority shareholding.
ELST is a holding company formed after a merger of Carbury Mushrooms and Monaghan Middlebrook Mushrooms Ltd.
DIG brought its proceedings against the majority holders: Danbywiske, Mr Wilson, the Wilson Limited Partnership One, Monaghan Mushrooms and ELST itself.
All the respondents have addresses at Tyholland, Monaghan, and had admitted to unspecified acts of oppression, Mr Justice Brian McGovern said in his judgment ordering the purchase of DIG shares.
He said the respondents had conceded a sample act of oppression was the purchase, by the company, of a mushroom business in Canada without the matter having being brought to the board for approval.
DIG alleged the Wilson shareholders were essentially running ELST “as if it were a family business”.
The Wilsons, it was claimed, viewed board meetings as mere information sessions convened to explain decisions, including acquisitions and pay rises, which they have already taken and put into effect.
Among its claims were that Danbywiske had no intention of taking steps to effect a sale of ELST despite a 2004 shareholders’ agreement that the business would be realised within six years.
Last December, Mr Justice McGovern ruled the price for the buyout should be €30.6 million although DIG argued it should be €34 million.
On Thursday, Mr Justice McGovern said the buyout should not be in accordance with the 2004 shareholders’ agreement or under an initial public offering of the shares on the stock market.
He said it should be in accordance with a process of discussion between the parties in 2013 in which DIG agreed to exit the company at full value with no minority discount on its shareholding.
The judge said this appeared to him to be the appropriate order to make and would also be in accordance with the norm in applications of this type.
The purchase will be at a valuation of €30.6 million and must have regard to a judgment he gave last January when he determined ELST and the other respondents were entitled to exercise the option to buy, giving them an entitlement to 70 per cent of the shares in the company.
The judge also said DIG had said it was willing and able to buy out the majority and had invited the court to make such an order.
However, he said there was no evidence of dishonesty, fraud, divesting of assets or other serious misbehaviour by members of the Wilson family or other respondents which would entitle the court to treat this as such an unusual case meriting an order that a minority shareholder buyout out the majority against their wishes.
