Petrel secures injunction preventing any trading of newly issued shares
Oil and gas exploration firm Petrel Resources Plc has secured a temporary High Court injunction preventing some of its investors from unlawfully selling any newly issued shares in the company.
Petrel claims that the last year it entered into what it believed was a long term investment agreement aimed at expanding its businesses with several individuals, who are experts in the area of fossil fuel exploration.
Seeking the injunction Gary McCarthy SC for Petrel said that as part of that deal the investors entered into an agreement, known as a 'locked-in' agreement, where they agreed not to sell any of their shares until August 2020.
Earlier this month Petrel, which has a registered address at Clontarf Road, Dublin 3 claims that it discovered that its shares have been unlawfully traded.
It has sought information about the trades, which it says are in breach of regulatory rules.
Counsel said that despite Petrel's demands the investors will not answer basic questions or provide straightforward information to explain why the allegedly unlawful trades have taken place.
Counsel said that it is Petrel's case that this will damage the company's reputation and business.
As a result, Petrel has taken action against the investors UAE-based Roger Edward Tamraz, as well as Michel Fayad and Said Mehraik who both live in France.
Petrel claims the three are the beneficial owners of shares in the company.
Chase Nominees Ltd, which is the alleged legal owner of the shares is also a defendant in the proceedings.
The temporary injunction prevents the defendants or any party that has knowledge of the order from selling or transferring any newly issued shares in the company.
The order also requires that Chase Nominees Ltd remains the registered owner of the newly issued shares, and that no steps are taken to change the registered owner of the shares.
The injunction was granted on an ex-parte basis by Ms Justice Leoine Reynolds today.
The judge accepted the matter was urged and that the potential breach of the agreement could have serious implications for Petrel.
The case will come back before the court next week.
Seeking the injunction Mr McCarthy said Petrel, which has projects in Ireland, Iraq and Ghana sought fresh investment so it could expand its business in the Middle East and North Africa.
The overall agreement was that shares representing a total of 47.5% of the company's share capital would be transferred, in two tranches, to the three named investors and a company owned by Mr Fayad and Said Mehraik.
Counsel said the company discovered in early January that some of its shares had been unlawfully transferred.
It sought explanations from the defendants. The company received correspondence from the investor's solicitors stating they had not given any instructions for the disposal of shares in Petrel.
What concerned Petrel was in the response reference was made to a US registered firm, which counsel said his client had never heard of before.
Following investigations, Petrel said that the main investors had somehow pledged or charged some or all of the shares to this entity.
Petrel said it sought further information about this entity as well as undertakings from the investors but says it has not received any substantive response.
The company now claims that the transfer of the shares is in breach of the locked-in agreement, and Petrel cannot trust the investor's assertions that they are not responsible or unable to stop the shares from being traded.
As a result, counsel said the company had no option other than come to court and seek an injunction preventing any more shares being traded.
