THE High Court has rejected a bid to wind up a mining company headed by entrepreneur John Teeling over claims that it is insolvent.
Connemara Mining plc, whose executive chairman is Mr Teeling, insisted the company was solvent and able to pay its debts.
It had opposed a winding-up petition brought by UK mining finance company Trampus Ltd, which is the largest single shareholder in Connemara at 6.32 pc. Mr Teeling and another director, James Finn, who both also opposed the winding up as creditors, own 7.78pc between them.
Trampus argued it should be wound up because it was insolvent and that it would be just and equitable to do so.
The company and the directors said no grounds had been demonstrated for winding up on a just and equitable basis and it was able to pay its debts when they fall due.
Trampus, as a contributory which owns fully-paid up shares in the company, did not have the required legal standing to bring the petition as it was not a creditor, it was also argued.
Yesterday, Ms Justice Mary Laffoy said she had come to the conclusion that under Irish law, Trampus did not have the required standing on the grounds it brought the petition, particularly as it had not been established the company was unable to pay its debts or that it would be just and equitable to wind up.
Connemara was set up in 2006 to exploit zinc and other mineral mining opportunities in Ireland. It has obtained licences for a number of locations in Ireland and one of its subsidiaries, Limerick Zinc Ltd, has attracted investment from a Canadian company, Teck, to help exploit zinc reserves covered by the licences.
In its petition, Trampus argued that Connemara's financial position had been deteriorating and it had a current deficit of €80,000.
Its inability to pay its debts was shown by a notification to shareholders last November that it was immediately ceasing to make payments towards the funding of Limerick Zinc under the terms of its joint venture agreement with Teck. This was in spite of previous assurances from directors that the company had sufficient funds to meet its obligations under that agreement until 2013, Trampus said.
In opposition, Connemara's directors said Trampus's assertions were unsupported by any evidence and the company had a right from time to time to contribute to exploration budgets, such as for Limerick Zinc, but had no obligation to do so.