TIDMMNRG
RNS Number : 0631A
MetalNRG PLC
31 January 2022
31 January 2022
MetalNRG plc
Commencement of legal proceedings against Brit Energy Holdings
LLP, Pierpoalo Rocco and BritNRG Limited
MetalNRG plc ("MNRG" or the "Company") announces that it has
filed and served civil legal proceedings in the English High Court
against BritENERGY Holdings LLP (the "LLP"), Pierpoalo Rocco ("Mr
Rocco") and BritNRG Limited (the "Joint Venture Company") (together
the "Defendants") for, inter alia, a declaration and the recovery
from the Defendants of monies paid to the LLP in 2021.
Following Mr Rocco's resignation as a director of the Company,
announced by the Company on 25 October 2021, the Company has also
terminated Mr Rocco's service agreement, as an employee, for cause,
following an open and robust disciplinary process which, despite
making written representations, Mr Rocco declined to attend. Mr
Rocco has subsequently appealed the decision.
Both MNRG and its shareholders have been impacted by information
circulated by Mr Rocco, the Joint Venture Company and the LLP on
social media, which is considered by the Company to be misleading
and factually incorrect. In particular, it has now been
acknowledged by the Joint Venture Company that the Company is one
of its shareholders despite recent social media claims to
contrary.
As the Company has now formally served proceedings on the
Defendants it is appropriate to provide a summary of the issues in
dispute.
As previously announced and disclosed in 2021 the Company
entered into an agreement to pay the LLP the sum of GBP475,000 to
acquire 190 ordinary shares in the capital of the Joint Venture
Company (the "SPA") and the LLP agreed to procure the transfer of
an additional 116 shares held by Mr Rocco to the Company upon the
Company's payment to the LLP of GBP475,000; the Company also
entered into an option agreement pursuant to which the LLP paid the
sum of GBP1 to the Company for an option to acquire up to 300
shares in the capital of the Joint Venture Company at the price of
GBP4,000 per share (the "LLP Option"; a further option agreement
was executed pursuant to which the Company paid the sum of
GBP545,000 to the LLP for an option to acquire 150 shares in the
Joint Venture Company at a price of GBP0.001 per share (the
"Company Option"); a share charge which purported to grant a
security interest in all convertible loan notes held by Company
(which convert into shares in the Joint Venture Company and
encompasses such acquired shares) in favour of the LLP to support
the payment obligations of the Company under the Company Option;
and a variation agreement between the Company, the LLP and the
Joint Venture Company purporting to vary the terms of the existing
shareholders agreement in respect of the Joint Venture Company
(together, the "April Transaction Documents").
The arrangements set out in the April Transaction Documents were
(and were understood and agreed by the parties at the time of the
entry into the same) to be an interconnected series of
arrangements, with the entry into each such document being
dependent upon the entry into the others. None of the arrangements
set out in the April Transaction Documents were intended to be of
legal effect in the event that all of the arrangements set out in
the April Transaction Documents were not entered into and such
arrangements were not legally effective.
The benefits to be acquired by the Company under the
arrangements set out in the April Transaction Documents (in
particular, under the SPA and the Company Option) was an
"arrangement" involving the acquisition of "non cash assets"
(within the meaning of section 190 of the Companies Act 2006) which
were, at the time of the entry into the arrangements set out in the
April Transaction Documents, "substantial" (within the meaning of
section 191 of the Companies Act 2006, in that they (in particular
the SPA and/or the Company Option) were said to be in respect of
arrangements worth in excess of GBP100,000).
In pursuance of the arrangements set out in the April
Transaction Documents, in a series of payments between 19 and 24
May 2021, the Company paid the sum of GBP1,019,999 to the LLP
(being the sums due under SPA and the Company Option less the GBP1
due under the LLP Option) (the "Company Payment").
It subsequently came to light that, following the Company having
not received share certificates for the shares in the Joint Venture
Company, at the time the parties entered into the April Transaction
Documents a private company limited by shares (incorporated on 23
September 2015 and with its registered office address at 18
Anderson Drive, Aberdeen, Scotland, AB15 4TY)known as Old Compton
Associates Limited ("OCAL") had an interest in the capital of the
LLP and by virtue of OCAL being owned by Mr Rocco's wife, Mr Rocco
and OCAL were connected persons for the purposes of sections 252 to
254 of the Companies Act 2006. In addition, it came to light that
Mr Rocco had an additional, potentially substantial, direct
interest in the LLP.
By reason of Mr Rocco's then status as a director of the
Company, the arrangements set out in the April Transaction
Documents, being a "substantial property transaction", required, in
accordance with section 190 of the Companies Act 2006, the approval
by a resolution of the members of the Company or to be conditional
upon such approval first having been obtained. The Directors have
at all times made it clear that they would have not entered into
the April Transaction Documents on behalf of the Company had they
been aware of the material interests of Mr Rocco in the LLP.
Accordingly, notwithstanding the requirements of section 190 of
the Companies Act 2006, the arrangements set out in the April
Transaction Documents were not approved by a resolution of the
members of the Company in a general meeting and were not
conditional upon such approval having been obtained, the Directors,
other than Mr Rocco, being unaware of the material nature of Mr
Rocco interests in the LLP.
As a result, the arrangements set out in the April Transaction
Documents and the Company Payment were each voidable at the
instance of the Company and by letter dated 22 September 2021, the
Company gave notice that the arrangements set out in the April
Transaction Documents were avoided and demanded repayment to the
Company of the principal amount of the Company Payment. The LLP and
Mr Rocco (by their joint solicitors) have sought to dispute the
validity of this notice and have, in any event, refused and/or
failed to pay to the Company the amount of the Company Payment.
The refusal by the LLP and Mr Rocco to accept that the
arrangements set out in the April Transaction Documents have been
avoided and/or to ensure the Company is repaid the principal amount
of the Company Payment is without credible foundation; the Company
has accordingly sought declaratory relief that it has avoided the
arrangements set out in the April Transaction Documents and the
Company Payment and an order for the immediate repayment of the
principal amount of the Company Payment. The Defendants have not
yet filed any defence.
In a separate action Mr Rocco has sought to recover his legal
and other costs relating to the Company's action described above
and in relation to his summary dismissal by the Company under the
terms of his service agreement in a case brought in the Courts of
Scotland. The Company disputes that the ability to recover legal
expenses under the contract was ever intended nor can be construed
to extend to actions by the Company itself against Mr Rocco for
breach of duty and/or misconduct against it, but is limited to the
reasonable costs of advice in relation to any personal claims by
third parties whilst discharging his duties to the Company. The
Company is accordingly vigorously defending these claims.
The Company will provide further updates on these issues and the
legal proceedings as appropriate.
END
Contact details:
MetalNRG PLC
Rolf Gerritsen
Christopher Latilla-Campbell +44 (0) 20 7796 9060
Corporate Broker
PETERHOUSE CAPITAL LIMITED
Lucy Williams/Duncan Vasey +44 (0) 20 7469 0930
----------------------
Corporate Broker
SI CAPITAL LIMITED
Nick Emerson +44 (0) 1483 413500
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END
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