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Plus SMS said today it would sue former chairman and founder, Australian Garry Donoghue, claiming he reneged on a deal to give back 85 million Plus SMS shares.
The company said Mr Donoghue had refused to settle the delivery of 85 million shares as agreed when he suddenly quit the company on August 31 amid company admissions it had misled investors with "unrealistic statements".
The company had intended to cancel the 85 million shares. The share cancellation was to "resolve all matters, disputes and disagreements between them (the company and Mr Donoghue)".
Plus SMS said today it had filed proceedings in the High Court against Mr Donoghue seeking the return of the shares, or damages of $11 million.
The share parcel days before the August announcement was worth $30m, before the share price plunged.
Mr Donoghue is an Queenslander who also owns New Zealand firms Prestige Boat Sales and Q-Tel.
He and significant one-time Plus SMS shareholder Simon Spence were directors in a sport marketing scheme, Ultimate Rugby, that went bust owing more than $800,000. In February last year, the pair made millions selling SMS shares.
The Securities Commission is investigating Mr Donoghue and other former Plus SMS directors.
In the August statement, Mr Donoghue's resignation and his agreement to return what was then a 24 per cent stake was attributed to the company having not achieved its goals and objectives.
Mr Donoghue set up the company with a plan to accumulate cellphone number ranges that corresponded to multi-national brand names and use them in global marketing campaigns.
At one stage, the company's market capitalisation shot up over $250m.
Plus SMS shares last traded at 11 cents. In April last year, they hit 74 cents. The company today is capitalised at $43m.
- NZPA
