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Text message marketer Plus SMS has triumphed against its founder, who has been forced to return $11 million worth of shares after the company started legal action against him.
But the Guernsey-based, NZAX-listed company, whose share price plummeted last year amid revelations it misled investors, also announced the issue of $400,000 worth of shares to another ex-employee whose identity it did not reveal. Plus SMS said yesterday it had successfully acquired and cancelled 85 million ordinary shares former chief executive Garry Donoghue agreed to hand back when he resigned last year. It had appeared he was trying to hold on to them.
Plus SMS chief executive Chris Tiensch said the successful conclusion of a no-cost buyback of shares worth almost 20 per cent of the company fulfilled a settlement agreed with Donoghue and that no further action would be taken. Plus SMS shares finished the day up 1.5c at 14c.
"[The company] has now been delivered the 85 million ordinary shares in accordance with the terms of a deed of settlement entered into between [Plus SMS] and Mr Donoghue on 31 August 2006," he said. Under that deed Plus SMS had "agreed to refrain from taking any action whatsoever" against Donoghue.
Donoghue's apparent failure to keep his end of the bargain prompted the company to take legal action last month in the High Court. After announcing the buyback, Plus SMS revealed it had issued four million fully-paid shares at 10c a share to a past employee of a subsidiary.
"The shares were issued in satisfaction of certain indebtedness owed by the company to a former employee (not being Garry Donoghue), who was previously employed by one of the company's subsidiaries," it said.
Plus SMS late last year rebranded as CRE8 Limited after a scandal involving incorrect statements to the market which saw its share price slip from 53c to 16c and prompted a Securities Commission probe. It continued to trade in New Zealand as Plus SMS Holdings Ltd.
Claims by Plus SMS, which plans to enable companies to run global text message campaigns and competitions using single codes, that it had exclusive control of more than 1000 country and national designation codes and ownership of thousands of vanity short codes, had been shown to be incorrect.
