Paddy Cosgrave: Bullying allegations made purely to damage me, claims Web Summit CEO

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Web Summit CEO Paddy Cosgrave has claimed allegations made in a lawsuit that he bullied and harassed staff were made purely to damage him in the eyes of the tech community.

he events entrepreneur has also rejected claims he was motivated by vendettas against a number of people, including Tnaiste Leo Varadkar.

In an affidavit filed with the High Court, Mr Cosgrave made several counter allegations against Web Summit co-founders Daire Hickey and David Kelly, both of whom are suing him over alleged shareholder oppression.

He alleges Mr Hickey sold access to Web Summits databases, which included contact details for billionaire Elon Musk, to third party event operators for personal profit. The claim has been described as baseless by Mr Hickey, who runs a public relations firm in New York and sits on the board of RT.

Paddy Cosgrave: Misunderstood or mischief maker?

Mr Cosgrave also claimed there was no reality to the description of Mr Hickey and Mr Kelly as co-founders. He claimed they were important early stage employees and that he agreed to give them vanity titles as a soother.

His comments are the latest twist in the extraordinary falling out between the three former business partners, who had been close friends for years. Mr Hickey met Mr Cosgrave when they were both studying at Trinity College, while Mr Kelly went to secondary school with Mr Cosgrave at Glenstal Abbey in Limerick.

Mr Cosgrave filed the affidavit earlier this week in a Commercial Court shareholder oppression lawsuit in which he is being sued by Mr Hickeys company Lazvisax Ltd. Web Summit holding company Manders Terrace Ltd and Mr Cosgraves firm Pro Roto Ltd are also defendants in the case, which is one of three Irish lawsuits relating to disputes between the co-founders of the tech event.

Last November, Mr Hickey alleged in an affidavit that a very substantial payment was made to a female ex-employee to settle claims of bullying and harassment against Mr Cosgrave. Mr Hickey claimed Mr Cosgrave routinely chastised and demeaned staff, particularly women, reducing employees to tears or placing them under inordinate stress.

Mr Hickey referred to a town hall address given by Mr Cosgrave in January 2015, where it is alleged he stated employees should either deal with the stress of life at the company or leave and accept they would only ever be average people or civil servants.

Responding to these allegations, Mr. Cosgrave said he had absolutely no recollection of the town hall meeting, describing the claim as an un-evidenced anecdote.

He also denied publicly chastising a member of staff who failed following an event. Mr Cosgrave admitted sending her a message expressing disappointment about utter disorganization and failing to have the right amount of chairs put out for the event. He acknowledged the message was strong in its terms but said Web Summit events were highly pressurized and successful because of the high standards we keep.

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Paddy Cosgrave, co-founder of Web Summit. Photo: Pedro Nunes

Paddy Cosgrave, co-founder of Web Summit. Photo: Pedro Nunes

He said the fainting episode happened almost nine hours after the message was sent and he did not believe there was a connection between it and the womans collapse.

In the affidavit, he claimed Mr Hickey was project manager for the event and that Mr Kelly later attributed the female employees failing to Mr Hickey failing to help her.

In relation to the alleged settlement with a different female ex-employee, Mr Cosgrave said he noted neither Mr Hickey nor Mr Kelly had said they had the complainants permission to put the matter before the court and into the public domain. I am advised that they had no business taking this step and that in the circumstances, all I should say is that the matter has been resolved to the satisfaction of all concerned, he said.

Mr Cosgrave said the tech community was a progressive one and it would reflect very poorly on him and the Web Summit if either was connected with harassment or bullying.

I believe that Mr Kelly and Mr Hickey were aware of this and that is why these allegations are made, purely for public consumption and in order to damage me in the eyes of the community in which I work and the Web Summit operates, he said.

As well as making serious allegations about Mr Cosgraves behavior towards staff, Mr Hickey also alleges the Web Summit CEO hacked the email of a rival tech event and used corporate funds without proper authorization.

He also claimed Mr Cosgrave used businessman Denis OBriens private jet to fly to Davos and the United States, but subsequently launched a campaign of abuse against the billionaire after his companies stopped sponsoring the tech event.

In a separate affidavit, David Kelly claimed Mr Cosgrave used company resources to run toxic campaigns and vendettas against Mr Varadkar, the Tnaistes friend Dr Maiti Tuathail and the IDA.

In his response, Mr Cosgrave said he entirely rejected claims that he was motivated by vendettas, for example against people such as Leo Varadkar.

He said from a business perspective, his feeling was the Web Summit should take a strong stance on issues and that he engaged in all of these matters in good faith.

Mr Cosgrave did not address Mr Hickeys claims regarding Mr OBrien, but alleged this was included by Mr Hickey in order to ensure press coverage of his affidavit.

He said the issue had no bearing whatsoever on the proceedings.

In relation to the claims he had hacked the email account of a rival tech event, Mr Cosgrave said what occurred was that following a review of Web Summit files and records he was discovered a former employee now working for the competitor had downloaded a valuable Web Summit database.

I confronted the competitor with this information and a confidential agreement was reached whereby the database was returned/deleted. There is little more to say about this, he said.

Mr Hickey has alleged Mr Cosgrave used corporate funds without obtaining authority from the board or consulting other board members.

He claims this included the use of 50,000 of the companys money to purchase a 0.25pc interest in takeaway business Camile Thai from Mr Cosgraves friend, Trevor White, the settlement of High Court proceeding brought against Mr Cosgrave personally by Dr Tuathail, the hiring of an activist lawyer and the giving of a 1m donation to charity.

In response, Mr Cosgrave said he did not agree that investments made were either unauthorized or contrary to the companys interests.

Mr Cosgrave said a 10,000 payment to Dr Tuathail was out of his own funds.

He denied improperly using company funds to hire the activist lawyer, saying this person was hired conventionally.

He also defended the 1m charitable donation, saying it was to fund projects aimed at strengthening Irelands response to the pandemic.

Mr Cosgrave said not only was it the right thing to do but it was felt the donation had the potential to enhance the attraction of partners, attendees and other customers.

Mr Hickey has claimed the breakdown in his relationship with Mr Cosgrave led to him resigning as a Web Summit employee in 2017 and as a director in 2019.

Mr Kelly resigned as a director last April.

He is being sued by the Web Summits holding company over the alleged secret setting up of an investment fund to profit from the companys success.

Mr Cosgrave claims the alleged breaches of fiduciary duty are likely to give rise to a loss of $10m (8.6m) to the Web Summit. Mr Kelly disputes the claims.

Mr Cosgrave owns more than 80pc of the Web Summit, Mr Kelly has a 12pc stake, while Mr Hickey owns 7pc. Both Mr Kelly and Mr Hickey claim they are oppressed shareholders.

Mr Kelly claims Mr Cosgrave has run the company like a personal fiefdom, as if he owned it outright himself.

It is also alleged by Mr Kelly that Mr Cosgrave harbored an intense animus towards Mr Hickey, tried to force him out of the business and repeatedly attempted to enlist Mr Kelly in coercing Mr Hickey to surrender his shareholding.

Much of Mr Cosgraves affidavit is taken up with counter-allegations against the two men and criticism of their performance as employees.

He denied Mr. Hickey has been oppressed, saying his interests had not been disregarded at any time.

Mr Cosgrave said Mr Hickey moved to New York in 2013.

He alleged Mr Hickey refused to substantially engage in the business afterwards, meaning he was in effect not involved.

He was never excluded, Mr. Cosgrave said.

He alleged Mr Hickey secretly assisted third party events which directly competed with Web Summit and that he accessed the personal details, including email and mobile phone numbers, of A-list individuals including Tesla CEO Elon Musk, Brian Chesky of Airbnb, Google co-founder Sergey Brin and Netflix CEO Reed Hastings.

A spokesman for Mr Hickey said he rejected these baseless allegations, claiming they were designed to distract rather than engage with the case.

Mr Hickey will not be deterred and remains focused on resolving the case through the courts, he said.

Mr Cosgrave claims Mr Kelly did not raise any concerns with him in writing about governance in the five years before his resignation.

He also said he was surprised Mr Kelly swore an affidavit in support of Mr Hickey, as he had been critical of Mr Hickeys performance over a number of years.

Mr Cosgrave also alleged Mr Kelly asked Mr Hickey to resign as an employee.

A spokesman for Mr Kelly said he had no comment.

The matter is next due before the Commercial Court in March.

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