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Mobile phone technology company Plus SMS Holdings is being taken to court by its founder Garry Donoghue.
Donoghue and chairman Jim Bracknell resigned in September 2006 amid a scandal of incorrect business statements and the launch of an ongoing inquiry by the Securities Commission.
At the time, a settlement deed was reached which included a no-cost buy back by the company of 85 million shares held by interests associated with Donoghue. However, the shares were only returned after Plus SMS started legal action.
Now Donoghue has started legal proceedings in the High Court at Auckland against the company.
Donoghue's lawyer, John Henderson, said the proceedings alleged Plus SMS had breached its confidentiality obligations under the settlement agreement.
"Immediately after that [agreement] Garry says the company didn't honour its side and they flavoured their public announcements against him and they had little digs at him here and there," Henderson said.
"So eventually he came and saw a couple of people including me and I said 'you can't put up with this, your reputation's being kicked from pillar to post here, you've got to do something about it'."
Donoghue was seeking unspecified damages. "He's not looking for a cheque, in other words what he wants is people to stop saying nasty things about him," Henderson said.
The publication of defamatory material appeared to have stopped, he said.
"So he's probably achieved his purpose."
Neither Plus SMS nor its lawyer returned calls.
Plus SMS shares closed unchanged at 8 cents on Friday.
