An Irish oil exploration company has secured court orders aimed at identifying people who allegedly posted defamatory material about it on internet message boards with a view to suing them following a “catastrophic” fall of some £132 million in its market value in recent weeks.
It is claimed “wholly untrue” defamatory postings between November 8th and 22nd, including postings claiming the firm’s drilling project in Nevada, US, was a “scam” by “liars”, materially contributed to its price fall and damaged the company’s reputation and ability to raise funds to exploit oil discoveries.
Proceedings
The market capitalisation of US Oil Gas plc (USOP) on November 5th was some £173 million, when the share price was £4.15, and is now £41.6 million with a share price of £1, the court heard.
Legal proceedings are intended against those who posted the material, Mr Justice Roderick Murphy was told.
“There appears to be a view you can say what you like on the internet but that day is gone,” said Rossa Fanning, for USOP.
In an affidavit, Brian McDonnell, chief executive of USOP, said he has been involved in the oil and gas sector for up to six years and USOP, incorporated in Ireland in 2009, was a well-run business formed to exploit the potential for substantial oil and gas finds in Nevada.
The material posted about USOP had had “a catastrophic effect” on his company’s share price and individually and cumulatively alleged serious wrongdoing against himself and his company’s employees, directors and officers, he said.
The gist of most of the statements was that he and USOP were engaged in a fraudulent attempt to induce investors to buy shares in a “sham” company, he said.
To suggest without any evidence and falsely he was a “fraudster” and “ponzi” scheme creator was defamatory per se, said Mr McDonnell .
Mr Fanning said the material complained of was posted on message boards on three websites: boards.ieoperated by Boards.IE Ltd, an Irish company; iii.co.uk, operated by London South East Ltd, a UK company; and lse.co.uk, operated by two related companies, Interactive Investor Trading Ltd and Interactive Investor plc.
