Ryanair in climbdown over Aer Lingus row
Budget airline will stop efforts to force rival into calling EGM
Published 10/12/2011 | 05:00
RYANAIR has been forced into an embarrassing climbdown after it said it would not continue efforts to force Aer Lingus to call an extraordinary general meeting.
Ryanair, which owns almost 30pc of its rival, has been attempting to make Aer Lingus call the EGM since early November.
It wanted to put two resolutions to shareholders: that Aer Lingus release the contents of an internal report into a controversial 2008 leave-and-return scheme; and that the former state-owned airline pledge not to put fresh funds into a pension scheme that's carrying a €500m-plus deficit.
Aer Lingus has refused Ryanair's request to hold the EGM on a number of occasions in past weeks. It has insisted that the request was invalid.
Earlier this year, the High Court said that Aer Lingus had the right to refuse to put a proposed Ryanair resolution to its shareholders on whether or not additional payments would be made to the troubled pension scheme.
Talks with DAA and Aer Lingus workers and management to find a solution to addressing the pension deficit were set to begin yesterday at the Labour Relations Commission.
But Ryanair has confirmed it won't now pursue the EGM.
It said that while it would drop the request, it would continue "through direct correspondence and -- if necessary -- legal proceedings, to raise the two issues".
In an open letter to the board of Aer Lingus yesterday, Ryanair's company secretary, lawyer Juliusz Komorek, has still insisted that the EGM should be called.
"We are extremely disappointed that Aer Lingus has again ignored our EGM requisition, which puts you in breach of Irish company law," he claimed.
Aer Lingus has previously rejected as "without foundation" suggestions by Mr Komorek that its directors have acted in breach of company law and stock exchange rules.
Ryanair had threatened to take legal action against Aer Lingus directors if the EGM request continued to be denied.
Ryanair told Aer Lingus that its refusal to hold the EGM demonstrated that it was "unable to exert any control or influence over how you operate the company".
Last month, a probe into Ryanair's ownership of a near 30pc stake in Aer Lingus by the UK's Office of Fair Trading (OFT) was suspended until an appeals court rules next year on whether the watchdog launched the investigation on time.
The OFT is trying to determine if Ryanair has exerted material influence over Aer Lingus.