Tribunal begins over dispute between Crogga and a founding member 

Diccen Sargent claims he had an unlawful deduction of pay

A tribunal's begun today (26 November) to rule on a dispute between Crogga and one of its founding members over an alleged unlawful deduction of pay.

Diccen Sargent left his position as a director and chief executive officer of the company in March 2022 but remains a shareholder.

WHO IS CROGGA?

Crogga is an independent company which is hoping to drill for gas under Manx waters off the coast of Maughold.

It's currently got a licence to do so from government on the condition it completes a 3D seismic survey of the seabed.

That licence has been extended numerous times and Crogga is now applying for a variation to it which enables it to drill using 2D surveys carried out in the 1990s.

WHAT IS THE DISPUTE?

The dispute stems from a decision for various directors to defer their salaries at a time when Crogga was in 'acute financial distress' in the autumn of 2020.

Mr Sargent was one of a number to have agreed initially to have his deducted by £1,500 in October and November that year before sacrificing his full £8,000 monthly salary in December and then January 2021.

The tribunal heard the understanding of this deferral was that when the company had successfully secured funding it would be repaid with an added 15 percent on top.

According to the evidence presented it wasn't just directors who agreed to this, a number of suppliers also agreed to defer their invoices too.

But the sticking point seems to be around the specifics of the funding that was to be secured in order for that repayment to be made.

WHY IS THERE A DISAGREEMENT?

It stems from a decision to restructure Crogga, which was founded in 2016, in early 2020.

It was split into three parts: Crogga Limited was the parent company of Crogga Energy Limited and Crogga Operations Limited.

The move was said to make the company more attractive to investors.

At the time of the restructure Mr Sargent's contract was transferred so that his employer was officially Crogga Operations Limited.

During his evidence to the tribunal today Mr Sargent said his understanding at the time was that his role was not changing as a result of this move - he was still CEO of Crogga Energy, something backed up by his email signature, and that there had been no change to his duties.

However Crogga's respondent claimed that, from the point of the restructure, Mr Sargent was solely an employee of Crogga Operations - something he himself agreed to as a member of the Board.

WHY IS THAT IMPORTANT?

In March 2022 Crogga Operations Limited went into liquidation - a position it is said to remain in today.

That means it's unable to pay its debts - including that which Mr Sargent claims he is owed.

But there's a difference of opinion between Crogga and Mr Sargent about when he should have been repaid.

In May 2022, after Mr Sargent had resigned, Crogga raised £800,000 of capital by selling some of its shares at a reduced price of £1 each.

Mr Sargent claims that, as this was the next time Crogga had managed to raise any funds, he should have repaid at this point.

However, Crogga is claiming the agreement was actually to repay the directors' salaries once it had completed a scheme to raise £10.3 million to conduct the 3D seismic survey of the seabed off the coast of Maughold.

Its representative at today's tribunal referred to minutes from Board meetings in October 2020 which suggested that to be the case.

But Mr Sargent disputes that point, claiming he and his colleagues wouldn't have agreed to the deduction if that were the case, something that was backed up by evidence given by Juan Cottier, another director who also resigned at the same time as Mr Sargent.

WHAT NEXT?

The tribunal's expected to last for four days and will continue tomorrow (Wednesday, 27 November).