The pharmaceutical company Elan has been granted an interim injunction preventing two of its US-based board members from establishing 'a parallel' investigation into concerns about corporate governance at the company.
This afternoon, the High Court was told that two shareholders and directors of the company, Jack Schuler and Vaughn Bryson, had attempted to engage a firm of lawyers in the US to carry out an investigation. It followed a complaint made by them at a meeting of the company's audit committee in May last.
The court heard that immediately after the meeting, Elan began an independent investigation into the concerns. The results of that investigation are due to be presented to the board on September 15.
But the company claims the two board members are attempting to engage another firm of lawyers to conduct a parallel inquiry at the expense of the company.
Elan says the two directors - who have been outspoken critics of the company's management in the past - have no authority to initiate such an investigation on behalf of and at the expense of the company.
The High Court was told that today's injunction application was of the 'utmost urgency' because legal proceedings by the two men relating to access to information was due before the US courts tomorrow.
Senior counsel Paul Sreenan said both defendants - who have been shareholders for a number of years - had run a public campaign to be appointed to the board of Elan last year. The company was questioning the motives and the timing of their actions, he said.
He said the defendants had made certain allegations against officers and employees of Elan and had now appeared to establish an entirely separate inquiry. They had acted unilaterally to instruct a Californian law firm at the expense of Elan, he said.
It was the company's case that they had no authority to do so and such action was likely to prejudice the proper inquiry which was already underway. The allegations made by the two men were already being fully explored, Mr Sreenan told the court.
Mr Justice Ryan said the urgency of the application, which was made on an ex parte - or one side only - basis, was clear. He granted the interim injunction and adjourned the case until next Monday.
Elan specialises in commercial pharmaceutical and biotechnology and employs 1,200 people, including 500 in Athlone and Dublin.
