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Record Number: 1999 /163 Cos
T H E H I G H C O U R T
I N T H E M A T T E R O F TH E C OM PA NIE S A CTS 1 963 to 19 90
AND IN THE MATTER OF PAR T I I OF THE COMPANIES ACT 1990 AND SECTIONS 8 AND 17
A N D I N T H E M A T T E R O F A N S B A C H E R ( C A Y M A N ) L I M I T E D
(formerly G U I N N E S S M A H O N C A Y M A N T R U S T L I M I T E D ,
A N S B A C H E R L I M I T E D an d C A Y M A N I N T E R N A T I O N A L B A N K A N D T R U S T C O M P A N Y
L I M I T E D )
R E P O R T O F T H E I N S P E C T O R S
A P P O I N T E D TO E N Q U I R E I N T O T H E
A F F A I R S O F A N S B A C H E R ( C A Y M A N )
L I M I T E D
Published by Order of the Court made on 24 June 2002
V O L U M E [ 1 3 ] : A P P E N D I X X V ( 1 4 3 ) TO X V ( 1 5 2 )
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ISBN 0-7557-1355-9
© Govern ment of I reland 2002
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Appendix XV (143) Blue Jeans Limited & JB Agencies
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating toBlue Jeans Limited & J B Agencies.
a) Transcript of evidence of Mr James Sweeney dated 27 June 2000.
b) Guinness and Mahon extract of nominal ledger balance listing dated 30September 1986.
c) Letter of 12 January 1988 from Blue Jeans Ltd to Guinness and Mahon.
d) Internal Guinness & Mahon Ltd Credit Memo of 4 September 1986.
e) Internal Guinness & Mahon Ltd Credit Memo of 14 October 1986.
f) Internal Guinness & Mahon Ltd Credit Memo of 8 January 1987.
g) Internal Guinness & Mahon Ltd Credit Memo of 10 March 1987.
h) Internal Guinness & Mahon Ltd Credit Memo of 16 July 1987.
i) Internal Guinness & Mahon Ltd Credit Memo of 11 August 1987.
j) Internal Guinness & Mahon Ltd Credit Memo of 5 February 1988.
k) Internal Guinness & Mahon Ltd Credit Memo of 8 March 1988.
1) Internal Guinness & Mahon Ltd Credit Memo of 30 August 1988.
m) Facsimile of 26 June 1990 from Blue Jeans Ltd to JB Agencies.
2. Correspondence received from or on behalf of Blue Jeans Limited & JB Agencies
Limited.
a) Letter of 22 January 2002 from Ivor Fitzpatick & Co Solicitors to M aryCummins, So licitor to the Inspectors.
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Appendix XV (143) (1) (a)
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PRIVATE EXAMINATION OF MR. JAMES SWEENEY
UNDER OATH
ON TUESDAY, 27TH JUNE 2000
I hereby certify the
following to be a true and
accurate transcript of my
shorthand notes in the
above named interview.
Stenographer
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PRESENT
The Inspectors: MR. JUSTICE COSTELLO
MR. ROWAN FCA
MS. MACKEY BL
Solicitor to the Inspectors MS. M. CUMMINS
Interviewee: MR. JAMES SWEENEY
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I N D E X
WITNESS EXAMINATION
MR. J. SWEENEY MS. MACKEY
MR. ROWAN
MR. JUSTICE COSTELLO
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1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,
2 22ND JUNE 2000:
3
4 MR. JUSTICE COSTELLO: Good morning Mr. Sweeney.
5 MR. SWEENEY: Morning.
6 MR. JUSTICE COSTELLO: Let me introduce myself, I
7 am Declan Costello and on
8 my right is Ms. Mackey and on my left is Mr. Rowan.
9 As you know we are the Inspectors who have been
10 appointed by The High Court.
11
12 The interview which we are going to have today will
13 be taken down and transcribed and we will ask you
14 later to come in to sign the transcript when you
15 have had a read of it.
16
17 However, your evidence will be taken under oath.
18 I will ask our solicitor now, Ms. Cummins, to
19 administer the oath to you.
20
21
22
23
24
25
26
27
28
29
4
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1 MR. JAMES SWEENEY, HAVING BEEN SWORN, WAS EXAMINED
2 AS FOLLOWS:
3
4 MR. JUSTICE COSTELLO: Mr. Sweeney, I am going to
5 ask Ms. Mackey to ask you
6 some questions first.
7 A. Yes.
8
9 MR. JAMES SWEENEY WAS EXAMINED AS FOLLOWS BY
10 MS. MACKEY:
11
12 1 Q. MS. MACKEY: Mr. Sweeney, just for the
13 record, before we start to
14 look at your statement, could you just give me a
15 brief history of your own career. Have you been in
16 business all your life?
17 A. I have worked for different companies before I went
18 into business on my own.
19 2 Q. Yes?
20 A. I was in the pharmaceutical industry. I was in the
21 heavy machinery equipment.
22 3 Q. Yes?
23 A. And I was in the leather industry.
24 4 Q. Right. You are currently, I think, a Director of
25 J.B Agencies?
26 A. Correct, that is us.
27 5 Q. Is that correct?
28 A. Yes.
29 6 Q. Will you tell me a little bit about J.B Agencies?
5
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1 When did you join it?
2 A. Well, I started the company.
3 7 Q. I see?
4 A. From the leather business.
5 8 Q. Yes?
6 A. It was an off-shoot of an introduction to the
7
8
clothing trade and I first started there as an agent
for Wallys International UK Limited selling leisure
9 wear.
10 9 Q. Yes?
11 A. And from there we -- the agency end of the business
12 was quite unprofitable, if nothing to say very hard
13 to survive in. We were working on a commission
14 basis.
15 10 Q. Yes?
16 A. We sold; got a commission; if the principals were
17 paid the goods were delivered etc. etc. It
18 transpired, that along that route, I had made
19 acquaintances with Wallaert, who was the owner
20 of Wallys and he was situated in Belgium but we
21 were buying out of the English company, which is a
22 guy called Cohen.
23 11 Q. Yes?
24 A. Now, as it transpired, as I say, the goods were
25 delivered. Payment was very slow, hence Wallys
26 slowed down the delivery. The commission became
27 smaller and I -- only I was living at home and
28 unmarried at the time, I couldn't have survived it.
29 It was 5% commission.
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1 12 Q. Right?
2 A. So, I put these propositions to the English
3 guy, Cohen, and he said he could do nothing about it
4 and he put the proposition to Wallaert and he said
5 -- Wallaert put the proposition to me that I could
6 become a wholesaler.
7 13 Q. Yes?
8 A. But wholesaling means that you should have some
9 financial backing.
10 14 Q. Yes?
11 A. And I had no financial backing at all. So, Wallaert
12 said he would put me into a situation whereby we
13 could deal direct from Belgium. We could -- he
14 would put up a marketing company that would look
15 after the marketing expertise in Ireland and
16 financially back the borrowings that would be
17 required by J.B Agencies to buy from him.
18 15 Q. Right?
19 A. And this would be all based on orders placed in
20 advance. So, in other words sales six months in
21 advance.
22 16 Q. Right?
23 A. So, if you got a £1,000 order he would know that we
24 would require £1,000 to buy it.
25 17 Q. When did you put all this in place? When did J.B
26 Agencies...(INTERJECTION)?
27 A. Start?
28 18 Q. Yes?
29 A. The early 1970's.
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1 19 Q. Yes?
2 A. The exact dates I am not quite sure.
3 20 Q. Is it an incorporated company?
4 A. Incorporated means what? Limited like?
5 21 Q. Is it J.B Agencies Company Limited?
6 A. J.B Agencies Limited, yes, yes.
7 22 Q. Yes?
8 A. It is incorporated.
9 23 Q. Yes?
10 A. Yes, fully.
11 24 Q. What does the J.B stand for?
12 A. It is a nickname. I was just called that at school.
13 25 Q. It is your own nickname?
14 A. Yes.
15 26 Q. J.B Agencies?
16 A. Yes.
17 27 Q. I see. Your full name is James Brian, is that
18 right?
19 A. No, James Patrick.
20 28 Q. James Patrick?
21 A. J.B was a nickname. J.P. didn't rhyme.
22 29 Q. Pardon?
23 A. J.P. didn't rhyme, James Patrick.
24 30 Q. J.P. did not rhyme. I see?
25 A. So, the guy called me J.B.
26 31 Q. I see. The company began then in the early 1970's?
27 A. Yes, yes.
28 32 Q. You traded up until?
29 A. We are still trading.
8
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1 33 Q. You are still trading?
2 A. Yes, yes.
3 34 Q. You are currently a Director of J.B Agencies, is
4 that right?
5 A. Yes, yes.
6 35 Q. Who are the shareholders in J.B?
7 A. I am one shareholder and Terry Kennedy is another.
8 36 Q. Just the two of you?
9 A. Yes.
10 37 Q. Yes?
11 A. Yes.
12 38 Q. Do you hold equal shares?
13 A. No, I have 60%. He has 40%.
14 39 Q. Right. Are you the two Directors as well?
15 A. Yes.
16 40 Q. Right. There are no other Directors?
17 A. No.
18 41 Q. I see. Do you have a copy of the statement that you
19 provided to us with you (Exhibit 1)?
20 A. I ... (INTERJECTION) .
21 42 Q. We will give you a copy if you have not?
22 A. No, I don't have actually, not with me.
23 43 Q. We will give you a copy here now because I want to
24 refer to it (Same Handed)(Exhibit 1).
25 A. Thank you.
26 44 Q. This is the statement you sent us in in answer to
27 the letter that we sent you?
28 A. Correct, yes.
29 45 Q. Seeking information about "Ansbacher", the company
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1 that we are investigating?
2 A. Yes .
3 46 Q. You say at paragraph two there that:
4
5
6
"J.B Agencies Ltd opened an accountwith Guinness & Mahon Ltd and operatedthis business account from 1984 to 1992approximately."
7
8
I want to ask you about your relationship with
Guinness & Mahon and how that began? I understand
9 that your bankers were Ulster Bank or Northern Bank,
10 or both?
11 A. Both.
12 47 Q. Both?
13 A. Well, Northern Bank and then Ulster Bank, yes.
14 48 Q. I see. How did you first come into contact with
15 Guinness & Mahon in the 1980's?
16 A. We were introduced to Guinness & Mahon by
17 Blue Jeans.
18 49 Q. I see. Yes?
19 A. Who were the people who were going to make the
20 guarantees available to us to trade.
21 50 Q. Right. May be I could just stop you there. If you
22 were introduced to Guinness & Mahon by Blue Jeans
23 may be, before we get on to your relationship with
24 Guinness & Mahon, this would be a good moment to ask
25 you about Blue Jeans. Who were Blue Jeans?
26 A. It was a marketing company of Wallaert's.
27 51Q.
Yes?
28 A. And they were responsible for marketing the leisure
29 wear business on behalf of their owners and they
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1 introduced us to markets in Italy, Holland, Germany.
2 52 Q. Right. When you say they were "a marketing company
3 of Wallaert's" were they a subsidiary of Wallaert's?
4 A. I am not quite sure. I don't know.
5 53 Q. And...(INTERJECTION)?
6 A. Just Wallaert said, "Here is a proposition. Here is
7 my marketing company." Well, now, whether he owned
8 it or whether he didn't own it.
9 54 Q. Right?
10 A. Or whether it was owned by Cohen, I don't know.
11 55 Q. Right?
12 A. I don't know who owned Blue Jeans.
13 56 Q. I see. Who did you deal with in Blue Jeans?
14 A. I didn't deal with anybody as such because
15 Blue Jeans basically gave us marketing.
16 57 Q. Right?
17 A. Display equipment, ads, negotiated the back-to-back
18 revenue to get us...(INTERJECTION).
19 58 Q. Their business was marketing?
20 A. Marketing, yes, yes. Like there was no dealing with
21 them.
22 59 Q. When I...(INTERJECTION)?
23 A. Like if we put an order down with
24 Wallys...(INTERJECTION).
25 60 Q. When I say "dealing" who was the person that you
26 spoke to or wrote to?
27 A. We didn't. We dealt with Wallaert. We didn't deal
28 with Blue Jeans as such.
29 61 Q. You have just told me Blue Jeans introduced you
11
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1 to Guinness & Mahon. So, somebody from
2 Blue Jeans ... (INTERJECTION)?
3 A. Well, they didn't introduce us. What was done was
4 we placed an order, say for next winter, with
5 Wallaert.
6 62 Q. Yes?
7 A. The value of that was £500,000, right?
8 63 Q. Yes?
9 A. An instruction came from Blue Jeans to their bankers
10 in Dublin, which was Guinness & Mahon, to make
11 available a Letter of Credit for the purchase of
12 that £500,000 worth of gear.
13 64 Q. Right?
14 A. Now, as such we -- our dealings with Blue Jeans was
15 -- there was no dealings at all.
16 65 Q. I asked you how you first came into contact with
17 Guinness & Mahon and you told me that you
18 were introduced by Blue Jeans?
19 A. Blue Jeans, yes, that is their bankers in Dublin.
20 66 Q. Let us just go back again then to your
21 first contact with Guinness & Mahon. Who said to
22 you, "Mr. Sweeney, you should go down to
23 Guinness & Mahon"?
24 A. Blue Jeans.
25 67 Q. Who in Blue Jeans?
26 A. They didn't talk to me direct. We dealt with
27 Wallaert.
28 68 Q. Yes. What I am trying to find out is what caused
29 you personally to go to Guinness & Mahon?
12
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1 A. Blue Jeans because that was their bankers. They
2 said, "The money will be available to you in Dublin
3 in a bank called Guinness & Mahon".
4 69 Q. Someone in Blue Jeans said this to you Mr. Sweeney?
5 A. They didn't say it to me. They wrote.
6 70 Q. Who wrote to you?
7 A. Well, you have one of their...(INTERJECTION).
8 71 Q. I am asking you a question: Who wrote to you?
9 A. Well, they didn't actually write to me. They wrote
10 to...(INTERJECTION).
11 72 Q. However, who did they write to?
12 A. They wrote to the bank.
13 73 Q. The bank. Did the bank contact you and say, "Come
14 in and see us"? Was that the first contact you had
15 with Guinness & Mahon? I am trying to establish
16 here Mr. Sweeney what caused you first to establish
17 a relationship with Guinness & Mahon?
18 A. Blue Jeans.
19 74 Q. You answer me each time "Blue Jeans"?
20 A. Blue Jeans, yes, yes.
21 75 Q. I want to know how that came about?
22 A. Well, I am probably -- I am obviously not describing
23 myself well. When we transferred from agent to
24 wholesaler.
25 76 Q. Yes?
26 A. We needed financial backing. I told Wallaert I did
27 not have the means to finance a wholesale company.
28 77 Q. Yes. Can I just stop you there Mr. Sweeney. You
29 speak of Wallaert and you speak of Blue Jeans?
13
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1 A. Yes.
2 78 Q. There was a person in each case. I want a name of
3 the person that you spoke to and who spoke to you?
4 Who in Wallaert said this to you?
5 A. Wallaert himself.
6 79 Q. What is his name?
7 A. Roland Wallaert.
8 80 Q. Ronan?
9 A. Roland Wallaert.
10 81 Q. Roland Wallaert?
11 A. Yes.
12 82 Q. How do you spell Wallaert?
13 A. W-a-l-l-a-e-r-t.
14 83 Q. Thanks. Mr. Wallaert told you; continue?
15 A. He said, Mr. Wallaert, said, "The marketing end of
16 the business will be handled by Blue Jeans. The
17 finance will be put in operation." They will
18 name the bank. "You will have your finance made
19 available to you in a bank called Guinness & Mahon
20 in Dublin".
21 84 Q. Right?
22 A. Right.
23 85 Q. Mr. Wallaert told you all this?
24 A. Through Blue Jeans though.
25 86 Q. He told you?
26 A. Yes, yes.
27 87 Q. Yes?
28 A. But he said that end of the business was not his.
29 His end of the business was manufacturing.
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1 88 Q. Yes. However, nevertheless he was the one who told
2 you?
3 A. Blue Jeans's end was marketing but yet he was
4 involved somewhere along the line.
5 89 Q. I see. On foot of what Wallaert told you you went
6 to Guinness & Mahon, is that right?
7 A. We were advised in Guinness & Mahon that we had
8 available letters of credit.
9 90 Q. Wait now. You went to Guinness & Mahon, is that
10 right?
11 A. To know if there were letters of credit available.
12 91 Q. Who did you contact in Guinness & Mahon?
13 A. I don't honestly know. This was very -- we were in
14 Guinness & Mahon may be once or twice a year.
15 92 Q. I want to get back to your first contact. I want to
16 know (A) who introduced you and?
17 A. Who I talked to in Guinness & Mahon.
18 93 Q. And it was Mr. Wallaert, and to whom he
19 introduced you?
20 A. In Guinness & Mahon?
21 94 Q. Yes?
22 A. I don't know.
23 95 Q. Were you asked to go to see Mr. Keane?
24 A. Mr. Keane?
25 96 Q. Yes?
26 A. I could have been, I don't know.
27 97 Q. You do not remember?
28 A. No. Well, I don't know the name. It doesn't mean
2 9 anything to me.
15
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1 98 Q. Yes. Who did you meet in Guinness & Mahon? Who did
2 you know over the years there?
3 A. I honestly don't know anybody in Guinness & Mahon
4 because, I mean to say, all I was interested in was
5 that the money was there for us to buy our orders
6 for the next season.
7 99 Q. Yes?
8 A. And like if the money wasn't there they would either
9 sent a letter -- we would get a telex or a fax from
10 Blue Jeans to say that the money was in place.
11 Now, who in Guinness & Mahon was really irrelevant
12 because we would have to pay Guinness & Mahon after
13 we sold the goods, collect the money and pay them
14 and...(INTERJECTION).
15 100 Q. I understand you...(INTERJECTION).
16 MR. JUSTICE COSTELLO: I just want to interrupt
17 you for a moment. You are
18 going a little fast Mr. Sweeney for the
19 stenographer?
20 A. I beg your pardon.
21 MR. JUSTICE COSTELLO: Would you mind going a
22 little slower please in
23 your answers?
24 A. Certainly, yes, certainly.
25 MR. JUSTICE COSTELLO: Yes.
26 101 Q. MS. MACKEY: I understand you to say
27 here in your statement
28 (Exhibit 1), if you would just look at the end of
29 paragraph two Mr. Sweeney:
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1 "J.B Agencies Ltd opened an accountwith Guinness & Mahon Ltd"?
2
3 A. Yes.
4 102 Q. For the purposes of today you are J.B Agencies. You
5 are the principal shareholder. Was it you who
6 opened the account or was it your fellow Director?
7 A. I am not quite sure. I am not. I am honestly not
8 quite sure. I really am. I am not trying to be
9 evasive on that. I honestly don't know which of us
10 opened it.
11 103 Q. Very good?
12 A. But one of us opened the account because there was
13 an account opened.
14 104 Q. Yes?
15 A. I have said that.
16 105 Q. So...(INTERJECTION)?
17 A. So, I am not denying that we opened an account.
18 106 Q. Yes. You opened an account?
19 A. So, which one of us opened it, I don't know.
20 107 Q. Very good?
21 A. Mostly the business end of it would probably be, the
22 financial end would probably have been, him.
23 108 Q. Yes. I would like to just ask you to look at a
24 document Mr. Sweeney; it is page 26. (Exhibit 2) is
25 that your signature at the bottom of that letter Mr.
26 Sweeney?
27 A. It is, yes.
28 109 Q. Yes. You will see that that is a letter then
29 written by you to:
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1 "Dear Martin."
2
3 At the top we see:
4 "Attn. Mr. M. Keane"?
5
6 A. Yes, yes.
7 110 Q. A letter dated the 13th January 1984?
8 A. Right.
9 111 Q. I asked you a moment ago if you knew Mr. Keane and
10 the name did not seem to be familiar to you.
11 However, here you are writing to him addressing him
12 as:
13 "Dear Martin"
14
15 does that bring anything back to you?
16 A. Not really.
17 112 Q. You do not recollect who Mr. Keane is?
18 A. Well, if you would ask me to identify him in a
19 line up I couldn't.
20 113 Q. Do you remember dealing with Mr. Keane now?
21 A. Do I? Well, I can say that that is obviously a
22 meeting we had. I am not denying that and obviously
23 this was just put in writing to facilitate what he
24 required from us to get our L/C.
25 114 Q. Very good. You can just put that to one side for
2 6 the moment now?
27 A. Yes, Okay.
28 115 Q. And we will just gp on with what I want to ask you?
29 A. Yes.
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1 116 Q. Did you meet with Mr. Desmond Traynor when you were
2 in Guinness & Mahon?
3 A. I honestly don't know.
4 117 Q. You do not remember meeting Mr. Traynor?
5 A. No.
6 118 Q. Did you meet Mr. Collery?
7 A. I honestly don't know.
8 119 Q. You do not know?
9 A. No.
10 120 Q. At the time that you began your relationship with
11 Guinness & Mahon who were your financial advisors?
12 A. You mean our accountants?
13 121 Q. Yes?
14 A. I think Simpson Xavier.
15 122 Q. Who were your advisors before them? Who were you
16 accountants before them?
17 A. Frank Kavanagh & Company Limited.
18 123 Q. Frank Kavanagh & Company. Did you have s solicitor
19 at that period?
20 A. The company solicitor, yes.
21 124 Q. Who was that?
22 A. Richard Dennehy.
23 125 Q. Richard Dennehy?
24 A. Still is the company solicitor on some factors.
25 126 Q. I want to just move on down your statement, (Exhibit
26 1) in that same paragraph 2 you talk about Guinness
27 & Mahon granting a Letter of Credit to you,
28 "...and this letter of credit wasguaranteed by Blue Jeans Ltd, one of
29 J.B Agencies suppliers."
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2 You have just told me that this was a marketing
3 company?
4 A. Well, yes, but it was also a supplier of marketing
5 expertise. I mean to say we would regard, in the
6 sales field, the marketing end as important as the
7 goods. As the supplier we had to pay for it.
8 127 Q. I see.
9 "In this regard we enclose herewith acopy of this Letter of Credit
10 facilities. I can confirm that his isthe only account that we have with
11 Guinness & Mahon and we did notoperate any deposit account with
12 Guinness & Mahon Limited?
13
14 A. We had a current account with Guinness & Mahon.
15 128 Q. Right. I would like you to look at some
16 documents. Page 29 Mary please (Exhibit 3) (Same
17 Handed). This is a document, an internal document,
18 from Guinness & Mahon. It is one that you furnished
19 to us yourself Mr. Sweeney. It is application for a
20 Letter of Credit facilities, the one to which you
21 have referred?
22 A. Yes.
23 129 Q. It is dated 8th February 1984. If we look on down
24 we see that you are looking for an extension of your
25 Letter of Credit facility for a year. The source of
26 repayments is cash flow. Then we move on down and
27 we see:
28 "Security."
29
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1 Do you see?
2 A. Yes.
3 130 Q.
4 "Funds presently on deposit £90,000."
5
6 What does that refer to Mr. Sweeney?
7 A. That must refer to between Blue Jeans and them
8 because they were guaranteeing us our money.
9 131 Q. It does not say anything about Blue Jeans. The name
10 of the applicant is J.B Agencies Limited. The
11 security is expressed to be
12
"Funds presently on deposit £90,000.
13 Joint & several guarantees held..."
14
15 Something,
16 "...life policies to come."
17
18 They appear to be the security given by
19 J.B Agencies?
20 A. Well, I am afraid I honestly don't know what it
21 means then,
22 "Funds presently on deposit £90,000."
23
24 I don't know. I would assume that was all
25 Blue Jeans's department.
26 132 Q. However, as I understand your evidence, Blue Jeans
27 simply gave a guarantee?
28 A. Yes.
29 133 Q. This is not referring to a guarantee. It refers to
21
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1
2
3
4
"Joint & several guarantees"
1
2
3
4 down below. However, this refers to,
5
6
"Funds presently on deposit"?
7 A. Yes, but where is it on deposit?
8 134 Q. With Guinness & Mahon, we presume. I do not know.
9 Where is it?
10 A. It may be on deposit with Blue Jeans. I don't know
11 either.
12 135 Q. Are you saying that these funds on deposit are not
13 funds belonging to J.B Agencies?
14 A. No, we never had but not to my knowledge had we a
15 deposit account with them. We did not. We had a
16 trading account that covered our L/C purchases.
17 136 Q. I see. I would like you to look at some more
18 documents. Mary page 28 please (Same Handed)
19 (Exhibit 4). This is another application for a
20 Letter of Credit facility and for a VAT guarantee.
21 I do not think the date appears on it but we see
22 down at the bottom that it does. The 27th, I think,
23 September 1984?
24 A. Yes, I see that, yes.
25 137 Q. It seems to be a later one than the previous one?
26 A. Yes .
27 138Q.
Again, if we look at security there we see:
28
29
"Joint & Several guarantees ofDirectors already held. NegativePledge. Adequately secured to the
extent of £110,000.00"?
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1
2 A. Yes .
3 139 Q. What do you think that refers to Mr. Sweeney?
4 A. Blue Jeans's end of the organisation.
5 140 Q. Pardon?
6 A. Blue Jeans.
7
8
141 Q. You know it is not sufficient for you really to
answer me by saying "Blue Jeans's end of the
9 organisation". This is security. Blue Jeans
10 apparently gave a guarantee, is what you are telling
11 us. There is no reference...(INTERJECTION)?
12 A. Blue Jeans gave us the ability to borrow from
13 Guinness & Mahon.
14 142 Q. Right?
15 A. Yes, that is...(INTERJECTION).
16 143 Q. How did they give you that ability? What did they
17 do?
18 A. I don't know the workings of what way Blue Jeans did
19 it. I was told that we would get the facilities to
20 borrow from Guinness & Mahon the amount of money
21 required for our purchases for the season in
22 advance. Now, what we had to do for our end was to
23 give personal guarantees, give a lean on our debts
24 and open insurance policies.
25 144 Q. Yes?
26 A. The other end of the situation was theirs because
27 Guinness & Mahon was their backer, not ours. We
28 didn't pick Guinness & Mahon. They picked
29 Guinness & Mahon.
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1 145 Q. I see?
2 A. Sure they have me down there as Brian Sweeney.
3 146 Q. Is that a mistake, yes?
4 A. Well, I am J.B.
5 147 Q. Yes?
6 A. A nickname, as I told you.
7 148 Q. Yes?
8 A. My name is James Patrick.
9 149 Q. Yes?
10 A. So, I mean to say does that mean everything in that
11 document is correct?
12 150 Q. Can I ask you to look at a document you provided to
13 us? It is page 27 Mary please (Same handed)
14 (Exhibit 5). This is a document which you gave us
15 in your bundle of documents. It appears to be your
16 resident call deposit account with Guinness & Mahon,
17 is that correct?
18 A. What does resident call mean?
19 151 Q. This is your account Mr. Sweeney. I am reading
20 what is on the top of it. You provided this to us.
21 It is your account, your J.B account, with
22 Guinness & Mahon?
23 A. That is what it says anyhow. I don't know what
24 resident call means anyhow.
25 152 Q. What I want to ask you is why you have not given us
26 the entire of that page. We simply have a half
27 page?
28 A. I gave you everything that Guinness & Mahon gave me
29 because we have nothing else.
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1 153 Q. Right?
2 A. This -- I gave you everything that I had.
3 154 Q. I see?
4 A. That document was given to us by Guinness & Mahon,
5 this whole thing.
6 155 Q. You see that there is only half the page there. We
7 do not see the balance in that account at all. The
8 page is cut off half way down?
9 A. Well, I didn't do that.
10 156 Q. You do not have the other half?
11 A. No, I do not.
12 157 Q. Do you have any document relating to your accounts
13 with Guinness & Mahon other than those that
14 Guinness & Mahon provided to you?
15 A. No, no. The only things we would have had with
16 Guinness & Mahon was paying them back the L/C that
17 we borrowed from them.
18 158 Q. Did you not keep copies of your documents and your
19 letters?
20 A. We would have had through the normal accountancy
21 procedure, of course.
22 159 Q. Where are they now?
23 A. Well, you are going back to 1984.
24 160 Q. Yes?
25 A. We would have -- they would be kept for the period
26 or time required. That is a long time ago.
27 161 Q. Yes?
28 A. Like we produced anything that you required of us in
29 that letter that you sent to us.
25
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1 162 Q. You produced to us everything Guinness & Mahon had
2 given you, I am asking you?
3 A. We produced everything that we had, that we had.
4 163 Q. You produced everything that you had?
5 A. We have. We have nothing.
6 164 Q. I see. So we have everything that you have?
7 A. You have everything, yes.
8 165 Q. Were those documents that you had the only
9 documents that Guinness & Mahon gave you or were
10 there other documents?
11 A. Well, I gave you the L/C copy. No, I think that is
12 in that folder as well, isn't it? They are the only
13 documents we had, yes.
14 166 Q. What I am asking you is: The documents that you
15 had, were they all the documents that you got
16 from Guinness & Mahon?
17 A. Correct, they were all we had, yes.
18 167 Q. In other words you had no documents of your own
19 retained at all?
20 A. Retained to?
21 168 Q. At all?
22 A. No, nothing.
23 169 Q. You did not keep any?
24 A. No. Well, when the trading year is over you start
25 another afresh, you go out and you sell. Our job is
26 selling, not retaining documents. We -- anything
27 that was required to be kept, the accountants would
28 tell us and we would fall in line with what they
29 say, and anything that is required by law is in
26
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1 J.B Agencies.
2 170 Q. Would your accountants have copies of those
3 documents still?
4 A. I don't know about that.
5 171 Q. Would you ask them?
6 A. Would I ask them?
7 172 Q. Yes?
8 A. Well, if you can let me know what you want me to
9 ask the accountants.
10 173 Q. Yes?
11 A. I will certainly do that without any hesitation.
12 174 Q. That would be great if you would ask your
13 accountants?
14 A. No problem.
15 175 Q. If you would your accountants then if they would
16 provide you with any documents they have?
17 A. Can you write that down for me so when I leave
18 here...(INTERJECTION).
19 176 Q. We will?
20 A. I will know exactly what you want.
21 177 Q. We will. It will be in the transcript as well?
22 A. Okay.
23 178 Q. However, I will say it now anyway: We would ask you
24 to ask your accountants to provide us with any
25 documents you have in relation to your accounts with
26 Guinness & Mahon, to any borrowings that you had
27 with Guinness & Mahon?
28 A. Yes.
29 179 Q. And any copies of any correspondence in relation to
27
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1 those borrowings?
2 A. Yes, sure.
3 180 Q. Or any securities that were put in place?
4 A. Certainly.
5 181 Q. Thank you very much. Could I show you another
6 document? It is page 44 Mary please (Same Handed).
7 It is again one of the documents that you provided
8 to us. This is a fax to Terry Kennedy, who is your
9 fellow Director and shareholder. It appears to be
10 from one of the Directors of Blue Jeans Limited, is
11 that correct (Exhibit 6)?
12 A. Yes.
13 182 Q. Did you know Mr. Nichols?
14 A. No.
15 183 Q. Had you personally any contact with him?
16 A. Not really, no.
17 184 Q. When you said "not really" what do you mean? Did
18 you or did you not?
19 A. Well, a fax comes to J.B Agencies. That is the kind
20 of...(INTERJECTION).
21 185 Q. The fax came to Terry Kennedy?
22 A. Well, he is my partner.
23 186 Q. However, did you have any contact with Mr. Nichols?
24 A. No, no.
25 187 Q. Did you ever speak to him on the telephone?
26 A. I could have. I may have spoken to him on the
27 telephone, yes.
28 188 Q. What would you have been speaking to him about?
29 A. "Is our Letter of Credit alright, our guarantee
28
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1 alright?," may be, if I spoke to him. I don't
2 know. That is a long time ago. I don't know.
3 189 Q. In fact you would occasionally have had contact with
4 Mr. Nichols or Blue Jeans about your financial
5 affairs in spite of what you said earlier?
6 A. Only insofar as the facility -- if and for -- if I
7 were to go down that road, that the L/C wasn't going
8 to be there, would be in contact with Blue Jeans.
9 Most of our contact would be with Wallaert.
10 190 Q. Yes. However, you were in a position where you
11 could contact Blue Jeans direct?
12 A. Yes.
13 191 Q. When you did contact them was it always Mr. Nichols
14 or was it somebody else?
15 A. I don't honestly know. I mean to say you would ring
16 Blue Jeans, if one did ring Blue Jeans, which I
17 don't think we did very often to be honest with you.
18 It was Wallaert, as I say.
19 192 Q. Yes?
20 A. Wallaert was mostly our connecting point to see
21 where your Letter of Credit guarantee was.
22 193 Q. Yes. This fax to Mr. Kennedy (Exhibit 6) is a
23 confirmation that they were willing to guarantee
24 Letter of Credit facilities up a maximum of
25 Stg£475,000.
26 A. Yes.
27 194 Q. Mr. Nichols goes on to say:
28 "We can provide collateral in the formof cash deposits in support of any such
29 guarantee"?
29
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1
2 A. Yes .
3 195 Q. What do you understand that to mean?
4 A. Well, it means that, basically what it means is
5 that, we have given Wally orders to the value of
6 £475,000.
7 196 Q. Yes?
8 A. They were willing to make that money available to us
9 for borrowing and they were putting the money aside
10 to please their backers, which are Guinness & Mahon,
11 in support of the guarantee.
12 197 Q. This fax here (Exhibit 6) was provided to you to
13 provide to Guinness & Mahon, is that correct?
14 A. No, that was telling us that the L/C facility has
15 been Okayed. In other words all our trading, our
16 purchasing, was brought forward to the value of
17 £475,000 and we could -- we knew we were going to
18 get the goods.
19 198 Q. Was this letter for your information or for the
20 information of Guinness & Mahon?
21 A. For ours. It was sent to us.
22 199 Q. Why would they be telling you that they could
23 provide collateral? Was that not something they
24 would have to tell the bank?
25 A. Well, if they didn't sell -- if we didn't know we
26 had the collateral that meant that we weren't going
27 to get the goods. We were out of business. I
28 presume they told the bank as well because they made
29 the L/C facility available to the bank. They
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1 guaranteed the L/C facility.
2 200 Q. When I was asking you earlier about the security
3 mentioned in a couple of the letters of facility and
4 there was a figure mentioned, you said, "That was
5 Blue Jeans's business. That was Blue Jeans's end of
6 things. It must have referred to Blue Jeans"?
7 A. Yes .
8 201 Q. £90,000 and is £110,000?
9 A. Yes .
10 202 Q. What I understood from what you were saying was that
11 Blue Jeans and Guinness & Mahon had some arrangement
12 whereby Guinness & Mahon would be aware of what ever
13 Blue Jeans was using to support their guarantees.
14 However, that was not your affair, is that what you
15 intended to say to me?
16 A. Yes. The guarantee was between Blue Jeans's bank
17 and Guinness & Mahon in Dublin.
18 203 Q. Right?
19 A. Yes, and -- yes.
20 204 Q. Then I wonder, and I ask you again, why were
21 Blue Jeans telling you that they could provide cash
22 deposits to support the guarantee? The guarantee
23 they are talking about here is the guarantee to
24 Guinness & Mahon, is it?
25 A. Well, yes. That is what I presume that is too, yes.
26 205 Q. Yes?
27 A. Very simply because we were anxious to know whether
28 our purchases were going to be -- were we going to
29 get the money from Guinness & Mahon in Dublin.
31
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1 206 Q. I mean you would get the money from Guinness & Mahon
2 once Guinness & Mahon had the Letter of Credit, is
3 is not right?
4 A. But we wouldn't. They weren't opened at this stage.
5 207 Q. Yes?
6 A. And we wanted to know why they weren't opened.
7 208 Q. I see?
8 A. So, obviously we made enquires. They sent us the
9 fax (Exhibit 6) to say that the guarantee of the L/C
10 facility was made available.
11 209 Q. They were confirming that they were willing to
12 guarantee one?
13 A. Yes.
14 210 Q. Not that it was...(INTERJECTION)?
15 A. Yes, and it wasn't always that they were willing
16 either. If the orders didn't justify the amount of
17 borrowings that we were looking for off Wallaert.
18 211 Q. Yes?
19 A. They wouldn't give -- grant us. We would have to
20 have the orders down.
21 212 Q. I see?
22 A. And they had -- yes.
23 213 Q. In fact these Letters of Credit were not automatic?
24 A. No.
25 214 Q. This was not a set up that Wallaert had established
26 for you whereby you would certainly get your
27 borrowings from Guinness & Mahon and that these
28 would be put in place? You had to satisfy
29 Blue Jeans first of all?
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1 A. I had to satisfy Wallaert.
2 215 Q. Yes?
3 A. That the orders were in place.
4 216 Q. Yes?
5 A. And he would scrutinize some of the orders because
6 he had previous experience.
7 217 Q. Yes?
8 A. Of supplying the retail trade in Ireland and not
9 getting paid.
10 218 Q. Yes?
11 A. So, now he had one account in Ireland, which was me,
12 but he also didn't want to end up not getting paid.
13 219 Q. Mr. Wallaert's company, I think you said, was in
14 Belgium, is that right?
15 A. Yes.
16 220 Q. Blue jeans is based in Guernsey?
17 A. Yes.
18 221 Q. They operated their marketing from there, is that
19 correct?
20 A. Yes.
21 222 Q. For Mr. Wallaert?
22 A. Yes, and other companies.
23 223 Q. And other companies?
24 A. And other companies he may have been involved. I
25 don't know whether he was involved with Italian
26 companies that they lead us to, that we dealt with.
27 224 Q. Yes?
28 A. And German companies and Dutch companies.
29 225 Q. I see. Was it always marketing for clothing
33
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1 companies?
2 A. Well, we were only involved in the clothing. So, I
3 don't know did they market anything else.
4 226 Q. Yes. Did you ever visit Blue Jeans in Guernsey?
5 A. No, no.
6 227 Q. You did not?
7 A. No, I didn't. Not to my recollection, no.
8 228 Q. You would recollect, I think, would you not?
9 A. No, I wouldn't, not that far back. I wouldn't
10 recollect twenty years ago, ten years ago. No, I
11 wouldn't.
12 229 Q. Did you ever visit Guernsey?
13 A. Not to my recollection. We could have had. I am
14 not saying that we did or we didn't. I don't
15 remember ever visiting Guernsey, no.
16 230 Q. Did Mr. Kennedy ever visit Guernsey?
17 A. Not to my knowledge.
18 231 Q. When did your relationship with Guinness & Mahon
19 come to an end?
20 A. It came to an end when the products that were
21 marketed through Blue Jeans became to expensive.
22 232 Q. What products were they?
23 A. Well, I can name you names. Do you want to know the
2 4 names?
25 233 Q. Did they not do the marketing for all your products?
26 A. They did the marketing for all the products under
27 the guise of Wallaert and that.
28 234 Q. Right?
29 A. But those products, namely the source in Italy,
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1 became too expensive.
2 235 Q. Yes?
3 A. The commission we had to pay Blue Jeans along with
4 the price of the garments -- just they were too
5 dear.
6 236 Q. Right yes?
7 A. So, we moved along to another company, which we
8 traded out of Denmark, and we didn't have to pay
9 commission.
10 237 Q. Did you move away from Wallaerts at that time?
11 A. We did, yes.
12 238 Q. I see. You moved away from Wallaert and Blue Jeans?
13 A. Well, once we moved away from Wallaert we moved away
14 from Blue Jeans.
15 239 Q. When did this happen?
16 A. I am not -- dates. They are all the dates like -- I
17 mean to say the last time that we paid would be ten
18 years ago.
19 240 Q. Ten years ago?
20 A. So, approximately. To the best of my knowledge now.
21 241 Q. In the early 1990's?
22 A. Yes, to the best of my knowledge, yes.
23 242 Q. Would it be around 1995?
24 A. We stopped trading with Blue Jeans?
25 243 Q. Yes?
26 A. Well, the last payment is in our accounts. So, I
27 mean to say it is easy enough to check that. The
28 last -- that would be in our accounts, yes.
29 244 Q. Have we got these accounts?
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1 A. Well, did you ask for my accounts? You didn't.
2 245 Q. Have you got accounts with Blue Jeans still? I
3 mean have you got copies of your accounts with
4 Blue Jeans?
5 A. Have I got copies of my accounts? I presume my
6 accountant has.
7 246 Q. With Blue Jeans?
8 A. With Blue Jeans?
9 247 Q. Yes?
10 A. Well, would there be payments to Blue Jeans do you
11 mean?
12 248 Q. Any correspondence or accounts or statements?
13 A. You have requested that already, haven't you?
14 249 Q. If I have not I am requesting it now, anything to
15 do with Blue Jeans?
16 A. Okay.
17 250 Q. You have them, have you?
18 A. I don't have anything of that sort.
19 251 Q. Your accountant has?
20 A. He may have.
21 252 Q. I see. When you finished your relationship
22 with Wallaert and with Blue Jeans you then had to
23 close the account which you had opened with
24 Guinness & Mahon. In fact you had two accounts, you
25 had a current account and a resident deposit
26 account, is that not correct, that are referred to
27 in the letter of facility. You had to close those.
28 How did you go about doing that?
29 A. Just didn't apply for a L/C again.
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1 253 Q. There was more than an L/C Mr. Sweeney. You had an
2 account in there, in the bank?
3 A. We had a current account.
4 254 Q. Yes. What did you do to close that?
5 A. Well, they wouldn't renew our L/C. We moved to --
6 we got the facility from the Ulster Bank.
7 255 Q. Yes. However, did you close down your account or
8 is it still there in Guinness & Mahon?
9 A. No, we have nothing in Guinness & Mahon.
10 256 Q. So, you closed down your account?
11 A. I presume so, yes.
12 257 Q. Yes. However, you must remember?
13 A. Closing down an account?
14 258 Q. Yes?
15 A. I don't.
16 259 Q. In a bank that was not your own bank and that you
17 had a quite specific relationship with?
18 A. I didn't. We didn't have that much of a
19 relationship with them. All they did was guarantee
20 our L/C's.
21 260 Q. They gave you large borrowings?
22 A. They didn't give us anything that they weren't
23 covered ten times over for. They didn't give us
24 anything.
25 261 Q. However, you had a quite specific relationship with
26 Guinness & Mahon?
27 A. Well, as close a relationship as you can have with
28 any banker.
29 262 Q. Any way do you recollect closing down your accounts?
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1 A. No, I don't, no.
2 263 Q. You do not?
3 A. No.
4 264 Q. We are going to take a break for ten minutes. We
5 will offer you a cup of tea or coffee and we will be
6 back to you then?
7 A. Yes. I would like a cup of tea. Thank you.
8 265 Q. We would ask you to stay here?
9 A. Okay.
10
11 END OF EXAMINATION OF MR. JAMES SWEENEY BY
12 MS. MACKEY:
13
14 SHORT ADJOURNMENT
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1 MR. JUSTICE COSTELLO: Mr. Sweeney, we will
2 resume our interview then.
3 Mr. Rowan would like to ask you some questions.
4
5 MR. JAMES SWEENEY WAS EXAMINED AS FOLLOWS BY
6 MR. ROWAN:
7
8 266 Q. MR. ROWAN: Mr. Sweeney, good morning.
9 A. Good morning.
10 267 Q. I would like to understand a little bit more
11 clearly the mechanism of dealing with Mr. Wallaert.
12 Mr. Wallaert was in Belgium and his company was
13 called Wallaert, was it?
14 A. No, no. His company was called Wallys.
15 268 Q. How do you spell that?
16 A. W-a-l-l-y-s.
17 269 Q. Wallys was...(INTERJECTION)?
18 A. There was a number of Wallys. There was Wallys
19 International UK Limited.
20 270 Q. That was the point. There was a Wallys in Belgium?
21 A. A Wallys in Switzerland; Wallys in Germany; Wallys
22 in Holland; a Wallys in Belgium, head office, and
23 Wallys in Tunisia.
24 271 Q. Right. These companies were all controlled by
25 Mr. Wallaert?
26 A. Yes.
27 272 Q. The Wallys in the United Kingdom, for instance what
28 was its role in the United Kingdom because that was
29 where you were dealing with when you were an agent?
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1 A. Correct. What was whose role, Belgium's?
2 273 Q. No. The UK Wallys?
3 A. With me?
4 274 Q. Yes, with you and others?
5 A. Well, I was working -- that is where I was
6 introduced to Wallaert or to Wallys.
7 275 Q. Yes?
8 A. At a show in the UK.
9 276 Q. Yes?
10 A. And I became an agent.
11 277 Q. Yes?
12 A. They supplied the Irish market.
13 278 Q. Yes?
14 A. I sold for them as a commission agent.
15 279 Q. Yes?
16 A. They collected the accounts.
17 280 Q. Yes?
18 A. They supplied the goods and generally speaking from
19 a business point of view, both from my side and
20 their side, it was an unsatisfactory arrangement
21 because payments were slow and sometimes not at all,
22 and the goods being delivered where not 100%
23 delivered. So, therefore, my commission was reduced
24 by the percentage of the goods not delivered. So,
25 it was a situation that had -- I couldn't sustain a
26 livelihood out of it anyhow on 5% commission.
27 281 Q. From your prospective whatever profit was in this
28 transaction of getting the goods from the supplier
29 to the customer in Ireland, too much of the profit
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1 was going to Wallys and the commission that you
2 earned was not sufficient. You could not make
3 anything out of it?
4 A. Well, that wasn't the supplier. Wallys UK wasn't
5 the supplier. They were the distributor of Wallys
6 Belgium's jeans in the UK for Ireland and England.
7 I couldn't go direct to Belgium.
8 282 Q. I understand that?
9 A. Yes.
10 283 Q. Alright. We know that Wally UK was a distributor?
11 A. Yes.
12 284 Q. Wallys in Belgium, what was its role if that role
13 was different?
14 A. Manufacturing.
15 285 Q. Wallys in Belgium manufactured?
16 A. Yes, they made everything.
17 286 Q. They made everything?
18 A. Yes.
19 287 Q. All made in Belgium?
20 A. All made in Belgium and Tunisia.
21 288 Q. And in Tunisia?
22 A. Yes.
23 289 Q. Right?
24 A. They dyed, they weaved, they knitted and they sewed
25 and they designed.
26 290 Q. Yes?
27 A. And then the marketing was done through Blue Jeans.
28 291 Q. Yes. When you became unhappy with your agency
29 commission you said to Mr. Cohen, I think you said
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1 his name was?
2 A. Cohen, correct, yes.
3 292 Q. Yes. Was he the UK...(INTERJECTION)?
4 A. He is the Managing Director of the UK.
5 293 Q. Of Wallys UK?
6 A. Yes .
7
8
294 Q. Right. You said to him, "Look, this cannot go on.
I need a better deal than this"?
9 A. Well, something to that effect but basically
10 speaking he was unhappy with me perpetually at him.
11 295 Q. Yes?
12 A. He was at the situation where he couldn't supply the
13 goods to me, and I later found out why, but if I
14 ordered 1,000 pieces I might get 750 pieces. So,
15 that meant the cost of selling 1,000 pieces was
16 there. They had been incurred. I wouldn't get the
17 commission on 1,000 pieces because they weren't
18 delivered. You had to pay commission on 750 pieces.
19 So, it was -- I was chasing my tail all the time.
20 So, I continuously gave him a hard time because it
21 wasn't a great idea, I now thought, going out on my
22 own. So, one day he said to me, "Look, Sweeney,"
23 he said, "There is the man that owns this
24 organisation. Go and talk to him. I have had
25 enough of you." So, I went up to this man I didn't
26 know.
27 296Q.
You met him in England?
28 A. He was at the show in England.
29 297 Q. I see?
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1 A. We all had to go over for the shows.
2 298 Q. Yes?
3 A. They paid our fare over.
4 299 Q. Yes?
5 A. And we stood on the stands and looked after the
6 Irish people.
7 300 Q. Yes?
8 A. The Irish customers there.
9 301 Q. I understand, yes. All their agent from around
10 these Islands would have been there at the show?
11 A. Yes .
12 302 Q. And whenever they saw their retail customers coming
13 in?
14 A. At the fair.
15 303 Q. They would have dealt with them?
16 A. At the fair.
17 304 Q. Yes?
18 A. Yes. So, I went up to this fellow, Mr. Wallaert I
19 was told was his name, and I said, "Mr. Wallaert, my
20 name is Sweeney. I sell your goods in Ireland and I
21 am not satisfied with delivery." He said, "I know
22 who you are and I know where you are from. I would
23 like you to deal direct with me." That basically
24 was the start of that. That was his opening
25 conversation and I said, "Mr. Wallaert, I can't
26 deal direct with you, financially I am not capable."
27 So, from there sprung, he said, "Look, we will
28 talk," and so we did talk.
29 305 Q. Because at that stage, of course, you were living
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1 at home?
2 A. Yes.
3 306 Q. And finding it difficult to make ends meet?
4 A. Very much so after being in a salaried position with
5 a car and all that type of stuff.
6 307 Q. Yes?
7 A. Yes.
8 308 Q. Yes. The conversation with him, you said to him,
9 "Look, I can't fund any of this sort of thing"?
10 A. Well, it didn't get...(INTERJECTION).
11 309 Q. Did he say, "Come and see me in Belgium or I will
12 come to Ireland and see you"? What happened then?
13 A. From memory we went to Belgium I think. We went to
14 see him in the factory.
15 310 Q. When you say "we"?
16 A. Myself and Terry Kennedy.
17 311 Q. However, was he also an agent of Wallys?
18 A. No, he was working for me at that stage.
19 312 Q. I see?
20 A. Yes, and I think we went to Belgium. As far as I
21 can recollect we went to Belgium, right?
22 313 Q. Yes?
23 A. And he outlined a programme. He knew the potential
24 of the market from my sales and he knew also the
25 credit risk he was incurring by supplying all these
26 people.
27 314 Q. Because up to that point, of course, the goods had
28 been coming straight through to the retailer in
29 Ireland, is that not right?
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1 A. Yes, yes, and they were invoicing and they were
2 trying to collect the money.
3 315 Q. Yes?
4 A. And between bad debts, slow payments.
5 316 Q. Yes?
6 A. Returns they had...(INTERJECTION).
7 317 Q. They had a lot of admin to do?
8 A. Well, a lot of admin and a lot of non-payment for
9 goods.
10 318 Q. Yes?
11 A. And out of sight out of mind and the last guy to be
12 paid was the supplier from the UK.
13 319 Q. Right?
14 A. That invoice went on the bottom of the pile.
15 320 Q. Right?
16 A. So, his proposal was that we deal direct and I
17 become one customer in Ireland, J.B Agencies,
18 instead of 350 over the country. Anything that I
19 bought, he knew what it would cost and he knew my
20 exposure debt wise.
21 321 Q. Yes?
22 A. And he said he would, through this, organise the
23 finance and keep control on my market, and keep an
24 eye on the progress, and if we progressed well and
25 good and he would introduce us to other markets,
26 which he did do.
27 322Q.
I wonder why he did not in the alternative just set
28 up Wallys Ireland?
29 A. Well, that is a question. Well, I suppose I can
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1 hazard a guess.
2 323 Q. Yes?
3 A. Because he closed down Wallys UK nine months later.
4 324 Q. I see?
5 A. Because of discrepancies appearing both in stock and
6 in other -- but I didn't know that at the time.
7 325 Q. Yes?
8 A. So...(INTERJECTION).
9 326 Q. The difference, of course, between J.B Agencies
10 acting as a distributor in Ireland because that is
11 effectively what you then became, rather than an
12 agent you became a distributor?
13 A. Correct.
14 327 Q. Was that you who took over for him all of this
15 administration so he was only dealing with one
16 customer in Ireland, namely yourself?
17 A. Correct.
18 328 Q. The problem being, of course, that you did not have
19 the funds to support this business?
20 A. Correct, yes.
21 329 Q. When it came to the question of financial support
22 how did he deal with that with you, can you remember
23 that?
24 A. Well, basically the orders had to be on the table
25 first like. We sold six months in advance.
26 330 Q. Yes?
27 A. So, we at the moment now would be selling for
28 next spring.
29 331 Q. Yes?
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1 A. So, therefore, what would arrive on his table would
2 be orders in the tune of say £500,000/£600,000 worth
3 of goods.
4 332 Q. Yes?
5 A. There is nothing made. There is nothing made up.
6 There is nothing supplied. He would evaluate that
7
8
and on the basis of that, and the number of accounts
involved, he orchestrated the finance through his
9 marketing company.
10 333 Q. Right. Just let me understand the order taking
11 process and I am thinking really now -- it may have
12 changed a little today but go back if you would to
13 the late 1980's and describe how it was you secured
14 the orders?
15 A. You went into a shop with your basket full
16 of...(INTERJECTION).
17 334 Q. You did not go to the show any more?
18 A. We went -- we did go to the shows, yes, yes.
19 335 Q. You would have shown some goods at the show?
20 A. What they would do at the shows would be -- people
21 would look, go around all the suppliers at the
22 shows.
23 336 Q. Yes?
24 A. And sort of check prices...(INTERJECTION).
25 337 Q. Form a view. Yes?
26 A. Check colours.
27 338Q.
Yes?
28 A. Check materials, check fabrics.
29 339 Q. Yes?
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1 A. And if at the end of that period of discovery they
2 still wanted to see you they would said, "Call," or
3 as we got a bit more sophisticated they now called
4 to us in our showrooms in Capel Street.
5 340 Q. I see?
6 A. Because we have different showrooms for the
7 different products we carried.
8 341 Q. However, your sales team would have gone around the
9 various retailers?
10 A. Retailers.
11 342 Q. And, of course...(INTERJECTION)?
12 A. Well, there wasn't a sales team it was myself and
13 Terry, that was it.
14 343 Q. I see. Right. However, ten or twenty years ago, of
15 course, there were many more independent retailers?
16 A. Yes, yes, there were.
17 344 Q. Is that not right?
18 A. That is correct.
19 345 Q. There had been a big change?
20 A. Yes, yes, all dwindling out.
21 346 Q. In the whole clothing distributing scene?
22 A. Yes.
23 347 Q. Much more direct now the big boys direct from
24 the manufacture?
25 A. Correct, yes, yes.
26 348 Q. Okay. In a sense you would have shown the samples
27 to individual retailers, the owner of the retail
28 shop?
29 A. Yes.
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1 349 Q. Or the buyer if there was a different person?
2 A. Right, right.
3 350 Q. Those samples came from Wallys in Belgium?
4 A. Yes.
5 351 Q. They sent you the goods, the sample goods?
6 A. Yes, the sample range, yes.
7 352 Q. Yes. Did you have any input into that sample range?
8 A. To a degree. To a degree say for argument sake this
9 make and style. Like there were some outlandish
10 colours that I would say they wouldn't sell in
11 Ireland.
12 353 Q. Yes?
13 A. "That fabric probably wouldn't sell in Ireland," and
14 to that degree but he was very much his own man
15 like. He was dealing with a very large number of
16 markets and ours would have been a very small one.
17 354 Q. Alright?
18 A. So, if we didn't get what was suitable for the other
19 markets he would particularly at that stage make
20 something specific for us.
21 355 Q. Yes, I see. You had a say, "Well, I don't like that
22 but I like this."
23 A. Yes.
24 356 Q. "So, we will have these number of garments over
25 these colours"?
26 A. Yes.
27 357 Q. "And these sizes"?
28 A. Yes.
29 358 Q. You would send those orders all off once you had
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1 done your selling?
2 A. Seven or eight weeks around the country.
3 359 Q. Yes?
4 A. You would collate the orders and send him a main
5 order.
6 360 Q. Okay. He would look at that and he would say, "That
7 is worth a quarter of a million pounds"?
8 A. Yes.
9 361 Q. What happened then?
10 A. Well, that if -- then if he approved to
11 accept that order the guarantee was placed with
12 Guinness & Mahon.
13 362 Q. He accepted your quarter of a million pound order
14 across all those styles?
15 A. Yes, one of the companies, whichever one it was,
16 yes.
17 363 Q. Yes. At that point, of course, they were either
18 being made in Belgium or in Tunisia?
19 A. Yes, and also they could have been Italian gear.
20 They could have been -- there was other companies
21 involved.
22 364 Q. That he owned?
23 A. Well, I don't know whether he owned them or not but
24 they were going through the marketing company.
25 365 Q. Yes, I see. He was sourcing goods?
26 A. Well, the market... (INTERJECTION) .
27 366 Q. In other places?
28 A. Yes, yes, yes, yes.
29 367 Q. Did he source goods, for instance, in the Far East
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1 at any stage?
2 A. I don't know. I don't know whether he made there or
3 not. I don't know.
4 368 Q. Yes?
5 A. But when you say "sourced goods" he did his own
6 manufacturing but he might have fabrics he might
7 have brought, but he had his own weaving mills as
8 well.
9 369 Q. However, you will know that increasingly it has
10 become too expensive to manufacture garments in
11 Western Europe?
12 A. That is why he is closed. He is closed. He
13 is gone.
14 370 Q. Yes. Things moved down to Portugal for instance?
15 A. China.
16 371 Q. And to China?
17 A. Yes.
18 372 Q. And to Hong Kong?
19 A. Yes.
20 373 Q. And to Taiwan and so on?
21 A. Yes.
22 374 Q. And then to other countries, Korea, and so on?
23 A. Yes.
24 375 Q. Effectively Mr. Sweeney the orders were placed with
25 Wallys in Belgium and he sourced the goods?
26 A. Yes.
27 376 Q. Okay. The goods, when they came in, would have come
28 directly from where they were manufactured into your
29 warehouse?
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1 A. Yes.
2 377 Q. They would not have come via Belgium, would they?
3 A. They could have had.
4 378 Q. Yes?
5 A. Well, at that time we were in the EU.
6 379 Q. Yes?
7 A. And we had to pay duty on the stuff coming in
8 from Belgium.
9 380 Q. Yes?
10 A. Yes, they would have come in from Belgium.
11 381 Q. Would they?
12 A. Yes.
13 382 Q. Alright. They would come into you and then you
14 would have distributed them out?
15 A. Break them down and distribute them out.
16 383 Q. Okay. However, going back to the order process,
17 whenever he accepted your big order he then said to
18 you, "Go and see Guinness & Mahon and get them to
19 raise a Letter of Credit"?
20 A. No, no. The Letter of Credit facility was made
21 available through Guinness & Mahon. We had no
22 input into the opening of the Letter of Credit.
23 384 Q. He instructed the Letter of Credit?
24 A. But it was instructed through Blue Jeans the
25 marketing company.
26 385 Q. Yes. I just want to understand, the instruction
27 came from Mr. Wallaert?
28 A. Well, yes. If he didn't approve of that order you
29 could forget it like. Blue Jeans couldn't just
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1 initiate a carte blanche L/C for us.
2 386 Q. Just to be a little careful, was it Mr. Wallaert or
3 one of his managers who rang, or sent a letter, or a
4 telex, or whatever, to Guinness & Mahon and said,
5 "Please issue a Letter of Credit on behalf of J.B
6 Agencies"?
7 A. The internal workings of that I am not quite sure on
8 like. My interest was, as you can imagine, getting
9 the orders and getting L/C approval. The mechanism
10 of how that worked really was of no concern to me.
11 I encouraged...(INTERJECTION).
12 387 Q. However, you needed to know it was happening?
13 A. I needed to know that it had happened.
14 388 Q. Yes?
15 A. Not it was happening.
16 389 Q. Yes, and if there was a screw up...(INTERJECTION)?
17 A. It had happened.
18 390 Q. Yes. If there was a screw up you rang somebody?
19 A. I rang Wallaert.
20 391 Q. You rang Wallaert?
21 A. Yes.
22 392 Q. In Belgium?
23 A. Yes.
24 393 Q. Right, and said, "Look...(INTERJECTION)?
25 A. "What is happening my L/C?"
26 394 Q. Yes, fine. When the L/C was issued on behalf of
27 J.B Agencies did there have to be any sort of
28 administration back and forward between J.B and
29 Guinness & Mahon? Did you have to sign things or
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1 anything of that sort?
2 A. For payments going out of the Country we had to sign
3 some documents. I don't know what they were we had
4 to sign.
5 395 Q. You would drop into Guinness and Mahon every so
6 often, would you?
7 A. No, no. No, we wouldn't. The documents would
8 appear down in Capel Street.
9 396 Q. Right. They would send them down?
10 A. Yes, we signed them.
11 397 Q. You would sign them and send them back?
12 A. Yes, we were selling like. I mean to say we were on
13 the road selling the goods.
14 398 Q. Yes?
15 A. That is it like. Administration is irrelevant
16 really.
17 399 Q. Yes?
18 A. Sales and payments.
19 400 Q. A necessary evil?
20 A. Yes, well, yes.
21 401 Q. In essence, therefore, the Letter of Credit was
22 raised in the name of J.B Agencies?
23 A. Yes.
24 402 Q. And that was sent, the Letter of Credit, where?
25 A. It was opened in favour of whoever we brought from.
26 403 Q. That was?
27 A. Wallys.
28 404 Q. Wallys?
29 A. Or it could be Pop 84 or it could be Panmem. It
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1 A. That is... (INTERJECTION) .
2 414 Q. Because they knew your customers, they knew whether
3 you had a sporting chance of getting paid because
4 you told them who they were. Why would they have
5 gone through this unnecessary loop of Blue Jeans in
6 Guernsey?
7 A. Well, if you are trying to ask me a question that
8 really should be addressed to Mr. Wallaert I will
9 try and answer it on his behalf but my answer
10 first of all is I don't know.
11 415 Q. Yes?
12 A. I can't think for Mr. Wallaert nor can I answer
13 for him but...(INTERJECTION).
14 416 Q. Yes. I am looking for a bit of a surmise because
15 it is a clumsy way of doing things when you
16 think about it?
17 A. Well, we are still doing it with companies we are
18 buying from in Holland and we are paying -- no, we
19 are buying in Germany and we are paying commission
20 to a marketing company in Holland, who
21 said...(INTERJECTION).
22 417 Q. However, they will not be guaranteeing payment to
23 your bankers?
24 A. No, they weren't, no.
25 418 Q. You see that is the essential difference in all of
26 this. That is the strange element of it, as it
27 seems to me at least?
28 A. Well, that is a strength element, I suppose, that
29 Mr. Wallaert made me a distributor overnight from
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1 a 5% commission agent and I had never met him.
2 419 Q. He was hoping to make a profit out of it?
3 A. Yes .
4 420 Q. I mean that is fair enough?
5 A. Well, he was making a profit out of Blue Jeans as
6 well.
7 421 Q. Alright?
8 A. If you like every garment that I sold they were
9 getting commission on and the principals were still
10 invoicing us with the cost of the goods. So, every
11 garment that they guaranteed us on they got
12 commission to Guernsey and Belgium was paid for the
13 garment. So, it is not that very strange at all.
14 422 Q. Alright. Let us explore then the role of Blue Jeans
15 because you explained that Blue Jeans was providing
16 a marketing service?
17 A. Yes .
18 423 Q. This word "marketing" can mean a whole lot of
19 different things?
20 A. Yes, right.
21 424 Q. Can you describe the services, describe them as
22 precisely as you can, that you believed Blue Jeans
23 provided J.B Agencies in the 1980's? What services
24 did they provide?
25 A. Well, to the best of my recollection we started
26 trade fairs here when I think the Futura Fair opened
27 up. I think we were told we would show. To my
28 recollection, "Could we afford to show?" They said,
29 "We will show".
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1 425 Q. Yes?
2 A. They did some advertising.
3 426 Q. Yes?
4 A. We had an add in the cinema.
5 427 Q. Yes?
6 A. They sent us a loop and they paid for cinema time.
7 428 Q. Yes?
8 A. Bags, in-store display units, and generally speaking
9 kept an eye on our sales to see that we were meeting
10 target expectations. Wallys did the manufacturing.
11 They did the marketing. That is as I understand the
12 marketing end to be.
13 429 Q. Okay. When there was a decision to have a show here
14 which company issued the instruction to the show
15 organizers for instance in respect of paying for the
16 stand?
17 A. J.B.
18 430 Q. Right. You incurred all of these costs?
19 A. Well, I incurred them provided they were going to
20 help me along the way.
21 431 Q. Of course, yes?
22 A. Yes.
23 432 Q. I mean you would have discussed it beforehand?
24 A. Yes, yes.
25 433 Q. And decided what you were going to do?
26 A. Yes.
27 434 Q. However, you went out and did it?
28 A. Yes, yes.
29 435 Q. You accumulated all of these costs once you paid
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1 them. How did you get paid by Blue Jeans for those?
2 A. Blue Jeans could have sent me a cheque or else I
3 would -- they would -- I would issue a credit note
4 to Wallaert.
5 436 Q. Yes?
6 A. Or some form of transaction anyhow. I wasn't -- I
7 didn't lose out on it anyhow. He recovered the
8 costs or credit notes or something similar
9 like that.
10 437 Q. Alright. It could easily have been either I
11 suppose, you issue a cheque or may be a credit note?
12 A. Yes, yes, yes.
13 438 Q. Because when you sold the goods, or was it before
14 you sold the goods that, you paid a per item
15 commission?
16 A. No, no. When we sold. I think the invoices were
17 raised on us when they were supplied, when the goods
18 were supplied, and we invoiced out the goods.
19 439 Q. When you invoiced out the goods?
20 A. Yes.
21 440 Q. However, before you had been paid for them?
22 A. Yes, yes, but, of course, we didn't pay for them
23 either until we got paid for them.
24 441 Q. Yes. The suppliers invoice, did that come from the
25 individual companies or did it come from Blue Jeans?
26 A. It came from the individual companies. It was a
27 Blue Jeans invoice, their own commission invoices.
28 442 Q. Blue Jeans were aware that those suppliers invoices
29 had been issued?
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1 A. Very much so, yes. They knew...(INTERJECTION).
2 443 Q. And at that...(INTERJECTION)?
3 A. They knew, Blue Jeans, exactly the quantity of goods
4 we got.
5 444 Q. Yes?
6 A. And how we distributed or broke them down was
7 irrelevant.
8 445 Q. Yes?
9 A. We could break them down in 150 over 500 accounts.
10 446 Q. Yes?
11 A. But at the end of the day it still amounted to
12 X amount of garments.
13 447 Q. Okay?
14 A. And once that tallied at the end of the year and the
15 commission, or the royalties, owed on that were
16 agreed.
17 448 Q. Yes?
18 A. They weren't that fussy now over credit limits or
19 things like that.
20 449 Q. Yes. Blue Jeans issued a commission invoice to you?
21 A. Yes.
22 450 Q. Of how much?
23 A. It was... (INTERJECTION) .
24 451 Q. Give a percentage?
25 A. It wasn't a percentage. It was a charge per
26 garment. It was between 0.75p and £1 a garment.
27 452 Q. Would that have been approximately a number of
28 per cent?
29 A. It would. It could have been around 10/12% or may
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1 be 15%.
2 453 Q. That was in addition to the cost...(INTERJECTION)?
3 A. To the cost of the goods.
4 454 Q. Of the garment?
5 A. Yes.
6 455 Q. Okay. The effect of this was that Blue Jeans got
7 this 10% or 15% per cent per garment charge and
8 against that they picked up some of the cost of
9 this marketing?
10 A. Marketing, yes.
11 456 Q. Alright. Point of sale materials?
12 A. End of store, yes.
13 457 Q. Yes?
14 A. Point of sale material, yes.
15 458 Q. Shows?
16 A. Yes.
17 459 Q. Advertising?
18 A. Yes.
19 460 Q. Newspaper advertising, TV advertising?
20 A. No, no. Not TV, no, no. That was too expensive.
21 They did occasionally take a sheet in a paper for a
22 local retailer who had done up a store or something.
23 461 Q. Yes?
24 A. And, "Congratulates to Joe O'Brien of Edenderry," or
25 something like that, you know.
26 462 Q. Yes?
27 A. "Compliments of J.B Agencies," and we would do
28 these, a number of these, and they would approve a
29 percentage of them.
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1 463 Q. Every so often there would be the income they were
2 deriving from these charges and the expenses that
3 you had created as a result of the marketing costs?
4 A. Well, the expenses weren't huge. They didn't --
5 they weren't that carte blanche now, I mean to say,
6 with their marketing end but they did help but it
7 was expensive.
8 464 Q. Right. You were dealing all the time, am I right,
9 with Guernsey and Blue Jeans?
10 A. That was were Blue Jeans was stationed, yes.
11 465 Q. Yes, and...(INTERJECTION)?
12 A. We didn't deal as such. As I said like my dealings
13 would be with mostly the manufacturing side of the
14 business, where the goods came from. This was
15 payment. There was no dealings. They just told you
16 that was the bill and you paid it.
17 466 Q. Mr. Wallaert had created this somewhat unusual beast
18 in Blue Jeans?
19 A. To my knowledge, yes.
20 467 Q. Which was stuck in the middle of all of this?
21 A. Yes.
22 468 Q. Adding to the cost of the garment?
23 A. Adding to my cost before that.
24 469 Q. Yes?
25 A. But I still netted 20% vis-a-vis 5% as an agent.
26 Quite a total difference.
27 470 Q. Yes?
28 A. And I was guaranteed the difference.
29 471 Q. However, in effect you were doing all the work for
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1 Blue Jeans, were you not?
2 A. I was doing all the work anyhow, not for Wallaert.
3 I was doing all the work anyhow and getting 5% of
4 what was delivered.
5 472 Q. Yes.
6 A. And Wallaert delivered all my goods.
7 473 Q. Yes?
8 A. I got a 100% deliveries.
9 474 Q. Yes?
10 A. So, therefore the work, the effort in selling,
11 justified the return.
12 475 Q. Yes?
13 A. I was doing the same for the UK and I was getting
14 75/65% of my deliveries.
15 476 Q. Blue Jeans, of course, were also providing this
16 rather crucial facility of guaranteeing the Letter
17 of Credit?
18 A. Very much so. Without that we couldn't have
19 functioned. We would still be an agent and out of
20 business.
21 477 Q. Right. Mr. Wallaert had effective control of
22 Blue Jeans?
23 A. To my knowledge -- that I can't swear but it
24 seemed to be that when he nodded they bounced.
25 478 Q. You talked to him a great deal?
26 A. Yes.
27 479 Q. And they did things?
28 A. Yes.
29 480 Q. He must have had some influence over all of it?
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1 A. That is what I said to you, to my knowledge he must
2 have had, yes, but it wasn't a thing he would
3 discuss with me.
4 4 i1 Q. Eventually you said that in the early 1990's this
5 arrangement became uneconomic?
6 A. Yes .
7 482 Q. Can you just outline a little bit more about that?
8 A. Well, as you just yourself said the cost of garments
9 in Europe went up astronomically and we couldn't
10 justify retailing them. I couldn't sell them. So,
11 we had to either close down or look for another
12 market, another source, another supplier and we came
13 across one in Cologne, who was sourcing stuff from
14 China. So, we moved out of goods out of Europe
15 basically to goods sourced in China through a
16 company through Denmark, who we are dealing with
17 today.
18 483 Q. However, by that stage, of course, J.B Agencies had
19 become established as a business?
20 A. It was. We had been dealing in the retail for
21 25 years, yes.
22 4 i4 Q. Yes?
23 A. Yes .
24 4 i5 Q. Obviously, you had built up some financial strength
25 at that stage?
26 A. Well, yes. Some strength, yes.
27 4 i6Q.
Sufficient to allow you to not require the guarantee
28 for the Letter of Credit because that was no longer
29 something, you said, was available?
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1 were quite happy with them and they made the
2 facilities available to us.
3 492 Q. Yes, of course. The relationship
4 between...(INTERJECTION)?
5 A. It wasn't really a relationship with
6 Guinness & Mahon. I mean we didn't see the guys.
7 We didn't -- we would go in on our bended knees to
8 see if our L/C facility was available and if it was
9 available they were lovely chaps and if it wasn't we
10 were out of business. It was a simple as that.
11 493 Q. Yes. I suppose that the relationship would have
12 improved over the years as you became more
13 established?
14 A. Not really, not really. The relationship was in
15 Ulster Bank, who saw our cash flow, our monies in,
16 our monies out, our monies over to Guinness & Mahon
17 to pay them. They saw that we were trading
18 reasonably well and weren't, you know -- we were
19 running the company reasonably well. That is where
20 we built a relationship.
21 4 94 Q. However, Guinness & Mahon did give you advice about
22 your business?
23 A. Not that I am aware of.
24 495 Q. A little earlier I think we passed over to you a
25 letter and perhaps we can pass page 26 over again.
26 This was the letter that you had a little
27 difficulty recalling having this meeting of
28 around January 1984 (Exhibit 6)?
29 A. Yes.
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1 496 Q. Where you are writing to Mr. M. Keane of
2 Guinness & Mahon and you are saying, "Dear Martin."
3 You obviously knew him well enough to call him by
4 his first name?
5 A. Well, obviously.
6 497 Q. Yes.
7 "Many thanks to your self and Barry..."
8
9 Who is Barry
10 A. I do not know.
11 498 Q.
12 "...for the informative meeting."
13
14 In other words he provided you with some valuable
15 information?
16 A. Well...(INTERJECTION).
17 499 Q. Would you agree with that? I mean that is what you
18 are saying in the letter?
19 A. Alright, I will have to agree with what I say in the
20 letter, yes.
21 500 Q.
22 "The following points were wellreceived..."
23
24 He offered you some guidance?
25 A. Yes, alright, yes.
26 501 Q.
27 "...and we will implement same as soonas possible."
28
29 He was acting as an adviser and you were prepared to
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1 take his advice?
2 A. Yes.
3 502 Q. These were people that you did not know very well
4 Mr. Sweeney?
5 A. Yes.
6 503 Q. I mean that seems to contradict a little your
7 observation that you really did not have a
8 relationship with them?
9 A. Well, I don't know how you term a relationship with
10 a bank. We were conforming to what they required.
11 504 Q. You were taking advice from them?
12 A. Yes. So, that is what they told us to do so we did
13 it.
14 505 Q. However, Ulster Bank would not tell you to do that.
15 Let us look at what they are saying:
16 "1. Increase Directors salaries forthe last year to £10,000 per annum and
17 enter into accounts."
18
19 A. Yes.
20 506 Q. This was a suggestion of a retrospective change to
21 your accounts. This is pretty hairy advice. Why
22 would they be saying that to you when you did not
23 have a relationship with them?
24 A. Well, it depends on what you term as a relationship.
25 Your term of relationship and mine obviously are
26 different. I listened...(INTERJECTION).
27 507 Q. You described...(INTERJECTION)?
28 A. I listened to advice. They obviously told me to do
29 this and I did it.
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1 508 Q. Did you ask...(INTERJECTION)?
2 A. If that is a relationship...(INTERJECTION).
3 509 Q. Did you ask for this advice?
4 A. No.
5 510 Q. They volunteered it?
6 A. Well, they obviously told us at a meeting. That is
7 what it says there.
8 511 Q. Yes. I am afraid Mr. Sweeney I feel that your
9 comments about this letter are not as clear as they
10 might be. I mean this letter I hope has helped to
11 refresh your mind. I mean I would like to
12 understand what prompted this sort of meeting?
13 A. What prompted this sort of meeting? I don't
14 honestly know.
15 512 Q. Did you request the meeting?
16 A. I don't know. Maybe they wouldn't give us the L/C
17 on the basis of our salaries. Maybe it is to do
18 with that.
19 513 Q. Let us go on down this letter then. They have told
20 you to increase the Directors salaries for last
21 year?
22 A. Yes.
23 514 Q. They said secondly:
24 "Increase Directors salaries for thisyear"?
25
26 A. Yes.
27 515 Q.
28 "On our projected cash flowforecast..."
29
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1 In other words you took along to him some
2 projections?
3 A. Obviously, what he required, yes.
4 516 Q. Yes.
5 "... it was your opinion that werequired no more than a Letter of
6 Credit facility for £150,000."
7
8 He said, "You have got some funds in the business
9 which would allow you to meet some of these bills"?
10 A. Bills, yes.
11 517 Q. Without the need for a Letter of Credit facility?
12 A. Yes.
13 518 Q. In other words you were sitting with funds on
14 credit. That is what that means, would you agree?
15 A. Well, I would take -- I don't honestly know. I
16 presume so. I don't know.
17 519 Q. He was getting your accounts?
18 A. Of course he was getting our accounts. Sure they
19 had a lien on our accounts.
20 520 Q. Who did?
21 A. Guinness & Mahon.
22 521 Q. Did Ulster Bank have a lien on your accounts?
23 A. No, Guinness & Mahon had.
24 522 Q. However, not Ulster Bank?
25 A. It was they who were giving us the L/C.
26 523 Q. However, the L/C was being guaranteed by Blue Jeans?
27 A. Well, they also had a lien on our accounts.
28 524 Q. Who did?
29 A. Guinness & Mahon, plus the guarantee. So far as I
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1 recollect with that guarantee they still had a lien
2 on our accounts. He...(INTERJECTION).
3 525 Q. Sorry to interrupt you. What exactly is a lien?
4 A. Well, that is...(INTERJECTION).
5 526 Q. In your mind?
6 A. In my mind?
7 527 Q. Yes?
8 A. Well, they saw our A list of debtors and we were
9 owed say -- for argument sake if we borrowed
10 £150,000 we were owed £200,000.
11 528 Q. Yes?
12 A. They would regard themselves as a preferential
13 creditor.
14 529 Q. How come?
15 A. I don't know how come but that is -- we sign over
16 our debts to them.
17 530 Q. You signed over your debts. Was this some sort of
18 invoicing?
19 A. Our -- yes, our debtors, yes.
20 531 Q. I.e. the money...(INTERJECTION)?
21 A. It was a form of a guarantee.
22 532 Q. The money you were expecting to come?
23 A. Yes.
24 533 Q. From your customers?
25 A. Yes, yes.
26 534 Q. You signed these over to Guinness & Mahon, a formal
2 7 document?
28 A. Well, that is to my knowledge, yes, yes.
29 535 Q. You did not actually...(INTERJECTION)?
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1 A. I didn't go into these things in as intricately as
2 that now to be honest with you.
3 536 Q. No, no. I am not trying to confuse you. I am
4 merely trying to understand the relationship?
5 A. But Guinness & Mahon had more security than the
6 Bank of England to give us a loan of that L/C, both
7 from Blue Jeans and from us.
8 537 Q. Yes?
9 A. Plus insurance policies, plus personal guarantees,
10 plus a lien on our debts.
11 538 Q. And you had no relationship with them?
12 A. No. So, therefore, why would they have a
13 relationship with us when I was tied up in a little
14 ball that you couldn't move if anything went wrong?
15 539 Q. I just find it...(INTERJECTION)?
16 A. Do you call that a relationship? I would not. I
17 would call that prison.
18 540 Q. A relationship is something where there is no
19 arrangements of that sort between the parties, where
20 merely you are using them to provide a facility.
21 They do that at the behest of someone else because
22 that is where all of this discussion started. You
23 said that Blue Jeans had the relationship with
24 Guinness & Mahon. Now you are telling us that, in
25 fact, they had some sort of invoice discounting
26 arrangement or some sort of rights over your
27 customer debts, that they...(INTERJECTION)?
28 A. Who had, Guinness & Mahon?
29 541 Q. That you showed them your projections, your cash
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1 projections?
2 A. Yes.
3 542 Q. That they saw your accounts?
4 A. Yes.
5 543 Q. Right. I mean that is a different sort of set of
6 ideas from "we had no relationship with them"?
7 A. Is this over the word relationship?
8 544 Q. You tell me what you would call it?
9 A. I would call it a business transaction.
10 545 Q. A business transaction?
11 A. Yes.
12 546 Q. Alright?
13 A. Not a relationship of any sort at all.
14 547 Q. Okay.
15 "Dear Martin"?
16
17 A. Necessity.
18 548 Q. Right. Okay. Going on to point number 4 in this
19 letter:
20 "Your advice on over trading and alsoyour comments on the effects of being21 granted a greater L/C facility than our
needs have been noted and absorbed"?22
23 A. We told...(INTERJECTION).
24 549 Q. They were telling you that you were selling too
25 much?
26 A. Yes.
27 550 Q. You were trading ...(INTERJECTION)?
28 A. We weren't running our company properly, yes.
29 551 Q. That is right?
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1 A. Yes. I needed that advice from him.
2 552 Q. Did you?
3 A. Yes.
4 553 Q. Not from your accountants?
5 A. My accountants weren't giving me the money, he was.
6 554 Q. Absolutely?
7 A. So, therefore, he decided to tell us how to run our
8 business.
9 555 Q. Technically...(INTERJECTION)?
10 A. Wallaert wouldn't have made that remark. He
11 wouldn't have been so bold.
12 556 Q. Then point number five:
13 "We will arrange to have fundstransferred from our Northern Bank14 account to our deposit account in
Guinness & Mahon from time to time"?15
16 What was he asking you to do there?
17 A. To pay for our L/C. To pay. That is basically to
18 pay for our L/C.
19 557 Q. Yes. He had some sort of a right over your customer
20 debtors ledger, the amounts that you would get in
21 from your customers?
22 A. That is if we defaulted in payment to him.
23 558 Q. However, they would have been put into your
24 Northern Bank account, would they not, your
25 customers...(INTERJECTION)?
26 A. In the event of default, yes, yes.
27 559 Q. In the ordinary course you would lodge those into
28 your Northern Bank account?
29 A. All things, yes, yes.
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1 560 Q. However, despite this Guinness & Mahon could claw
2 back some of that money?
3 A. From Northern Bank?
4 561 Q. I do not know?
5 A. No, they couldn't unless we instructed the Bank to
6 pay them but failing that, whatever lien on our
7 debts meant, they still had a guarantee from
8 Blue Jeans, and failing that they still had personal
9 guarantees, and failing that if we dropped dead they
10 had insurance policies. So, I mean to say they
11 weren't going to be out of pocket and then they
12 still turn around and tell you how to run your
13 business.
14 562 Q. Yes. I mean essentially...(INTERJECTION)?
15 A. That is a relationship?
16 563 Q. It is a business arrangement?
17 A. Yes, that is what I call it.
18 564 Q. Yes?
19 A. Very one-sided.
20 565 Q. Yes. How often would you have had meetings with
21 Mr. Keane?
22 A. As little as possible.
23 566 Q. Would it have been once a year?
2 4 A. Maybe, maybe.
25 567 Q. Twice a year?
26 A. Possibly.
27 568 Q. Every quarter?
28 A. No, no, no, no. Once a year maybe if he decided
29 like. Some of this information would be sent down
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1 so we didn't have to see him.
2 569 Q. Yes?
3 A. Or if it was him or whoever that other fellow
4 Barry is.
5 570 Q. Clearly there was a meeting here, was there not?
6 A. Yes, there must have been, yes, yes.
7 571 Q. And...(INTERJECTION)?
8 A. I am not denying that, no.
9 572 Q. No, no. You also said to me earlier that you showed
10 him your list of orders because that was the way he
11 became comfortable?
12 A. No, Wallaerts, Wallys. Wallys would see the orders.
13 573 Q. I thought you said that Mr. Keane saw the orders?
14 A. Did I say that?
15 574 Q. I thought you did when we were talking about the
16 cash flow. Did Mr. Keane see the orders?
17 A. Well, I mean to say he may have. He could have
18 seen the orders but I mean to say there is
19 no...(INTERJECTION).
20 575 Q. Please Mr. Sweeney?
21 A. Okay.
22 576 Q. Did he see the orders or did he not?
23 A. I am not quite sure. I am sorry. I am not trying
24 to be evasive. He could have seen the orders but
25 seen the orders like, "So there is £50,000 worth of
2 6 orders," I am not quite sure.
27 577 Q. Did Mr. Keane have any connection with Blue Jeans?
28 A. I am not quite sure. I don't think so. Not to my
2 9 knowledge anyhow. He could have had but I don't
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1 think so.
2 578 Q. Did Mr. Keane have communications with Blue Jeans?
3 A. I don't know that.
4 579 Q. However, Guinness & Mahon had communications with
5 Blue Jeans because Blue Jeans were guaranteeing the
6 Letter of Credit?
7 A. Correct.
8 580 Q. I rather assumed your answer to that would have
9 been, "yes"?
10 A. Well, I don't know what communication between
11 Guinness & Mahon and Blue Jeans took place. All I
12 wanted to know was my L/C facility was available.
13 That is my only interest in Guinness & Mahon.
14 581 Q. Just one final point. We asked you could you obtain
15 some more information on the, page 27 Mary, your
16 statement which you provided (Exhibit 5)?
17 A. Yes.
18 582 Q. As you can see?
19 A. Yes, yes.
20 583 Q. It turns out to be half a statement?
21 A. Yes.
22 584 Q. What do you think the balance on that statement
23 (Exhibit 5) might have been?
24 A. I haven't the foggiest notion.
25 585 Q. I mean...(INTERJECTION)?
26 A. 1984, February?
27 586 Q. Yes. I suppose I should ask it in a more general
28 way. What level of deposit did you maintain with
29 Guinness & Mahon?
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1 A. To my knowledge to kept -- pay off our
2 Letter of Credit.
3 587 Q. Yes?
4 A. From time to time we transferred money from our
5 bank.
6 588 Q. Yes?
7 A. To pay off our L/C's.
8 589 Q. L/C's would have had a date on them when they had to
9 be met, would they not?
10 A. Yes, yes.
11 590 Q. You would have transferred the money into your
12 account in Guinness & Mahon just before the L/C had
13 to be met?
14 A. Not necessarily so. We could go over that date
15 provided -- or we could pay before that date or like
16 -- they weren't that strict, I don't think so
17 anyhow.
18 591 Q. Did you borrow money from them from time to time?
19 A. We borrowed -- no, we didn't. We got L/C's from
20 them.
21 592 Q. Right. When you had to pay the Letter of Credit,
22 out of which of your Banks did you pay it?
23 A. The bank we were with. Northern Bank was one and
24 then we changed to the Ulster Bank.
25 593 Q. Why did you keep any deposit monies with
26 Guinness & Mahon in that case?
27 A. I wasn't aware we had deposited money with
28 Guinness & Mahon.
29 594 Q. Surely that is what this statement (Exhibit 5), the
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1 bit of it that we can read, says, that you had an
2 Irish pound resident call, "D/A" means, deposit
3 account. It says J.B Agencies so you had money on
4 deposit with them?
5 A. Well, may be it was to pay off the L/C.
6 595 Q. However, you said to me that the L/C's were paid by
7
8 A.
your main Bank, either the Northern or the Ulster?
Well, it says here (Exhibit 2):
9
10
11
"We will arrange to have fundstransferred from our Northern Bankaccount to our deposit account inGuinness & Mahon."
12 And that was to pay off the L/C's.
13 596 Q. Guinness & Mahon paid the L/C's?
14 A. Of course they did.
15 597 Q. I am sorry. I thought a moment ago you said to me
16 that Northern Bank paid the L/C's?
17 A. We paid Guinness & Mahon for the L/C's and they paid
18 Blue Jeans.
19 598 Q. Guinness & Mahon paid Blue Jeans?
20 A. Yes .
21 599 Q. Right?
22 A. No, paid Wallaert. Wallaert, sorry. I might be
23 getting all mixed up here. Blue Jeans guaranteed my
24 borrowings. The money was owed to Wallaert.
25 600 Q. Yes?
26 A. Or to one of the companies, right?
27 601Q.
Yes?
28 A. They were paid by the Letter of Credit. We owed the
29 money to Guinness & Mahon.
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1 602 Q. Yes?
2 A. That money was paid to Guinness & Mahon out of our
3 trading account, which was either Ulster Bank or
4 Northern Bank.
5 603 Q. Yes?
6 A. Now...(INTERJECTION).
7 604 Q. You might have transferred that money over?
8 A. To a deposit account or whatever to pay off the L/C.
9 605 Q. Just before the Letter of Credit was due?
10 A. Well, just before or just afterwards. I am not
11 quite sure on those details.
12 606 Q. Yes. However. Guinness & Mahon would have given you
13 an overdraft facility for a time?
14 A. They may have done so, I am not quite sure.
15 607 Q. Did you have an overdraft arrangement with
16 Guinness & Mahon?
17 A. I don't know. I am not quite sure.
18 608 Q. Is it a possibility?
19 A. I doubt it otherwise he would have put it in black
20 and white but it is a possibility.
21 609 Q. I appreciate this is some years ago and I appreciate
22 that one cannot remember everything in detail.
23 However, I did think as a general bit of information
24 you would have recalled whether you did have a
25 borrowing arrangement?
26 A. I am nearly 100% that we did not but then again I
27 can't trust my memory back to 1984 but I am nearly
28 sure we did not.
29 610 Q. Yes?
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1 A. Our borrowing arrangements were with our Bank there
2 we were trading with.
3 611 Q. However, you can see, can you not, that if
4 Guinness & Mahon were to pay a Letter of Credit
5 before you transferred the money in from
6 Northern Bank, they would have been running a risk?
7 A. Exposed.
8 612 Q. Exposed?
9 A. So, therefore, we must have paid it in before they
10 were exposed.
11 613 Q. I was hoping for a bit more clarity than that?
12 A. There isn't any more clarity on it. I mean to say
13 it is either the L/C's -- we always got L/C for
14 90 days. So, therefore, that would give us 90 days
15 to collect our accounts.
16 614 Q. Okay. What was your policy for keeping money on
17 deposit with Guinness & Mahon?
18 A. To pay off the L/C.
19 615 Q. Yes. Would that have meant that you would have kept
20 £1,000 in the account, £10,000 in the account,
21 £100,000 in the account?
22 A. I don't know. I don't honestly know.
23 616 Q. Right?
24 A. Because all we would know is what we owed them,
25 would be in our accounts as a debt and that was for
26 us to see. That was the same for our suppliers.
27 So, I mean to say that...(INTERJECTION).
28 617 Q. Anyway you have agreed to try and find this?
29 A. Yes, yes.
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1 618 Q. The other half of this statement (Exhibit 5)?
2 A. If you let me know what you want me to try and get
3 you I will do my utmost to get all the information
4 that is required and what is available.
5 619 Q. Thank you Mr. Sweeney.
6 A. How are you going to let me know that as a matter of
7 interest?
8 620 Q. First of all we will have a conversation with you
9 afterwards?
10 A. With me?
11 621 Q. Yes.
12 MS. MACKEY: We will put it in writing,
13 I think.
14 MR. ROWAN: I think we will follow it
15 up with a letter?
16 A. Okay, right.
17 622 Q. Thank you.
18
19 END OF EXAMINATION OF MR. JAMES SWEENEY BY MR. ROWAN
20
21
22
23
24
25
26
27
28
29
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1 MR. JAMES SWEENEY WAS EXAMINED, AS FOLLOWS, BY
2 MR. JUSTICE COSTELLO:
3
4 623 Q. MR. JUSTICE COSTELLO: Mr. Sweeney, just a
5 few questions to clarify
6 the situation. Would you pass him page 31 please
7 (Same Handed). I want to refer you to a letter of
8 the 24th January 1986 from Guinness & Mahon to the
9 Secretary of your company. Do you see this (Exhibit
10 7) :
11 "Further to recent negotiations, wehave pleasure in confirming that we are
12 prepared to place at your disposal afacility."
13
14 This is a facility letter. You have seen that, have
15 you not?
16 A. Probably, yes, Okay. I can't recall if I seen them
17 but I must have had.
18 624 Q. Why? Have you a doubt about it?
19 A. Well, it is 1986.
20 625 Q. No. You gave it to us?
21 A. I know but I didn't read everything in that folder.
22 626 Q. Did you not?
23 A. Not really, no.
24 627 Q. Did you not read the documents that Guinness & Mahon
25 gave you?
26 A. Most of them, yes, but...(INTERJECTION).
27 628 Q. Most of them?
28 A. Most of them.
29 629 Q. Then you would have read this?
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1 A. Yes, yes, Sir. Right, I read it.
2 630 Q. Then why did you deny a moment ago that you had not
3 read it?
4 A. I didn't deny, Sir. I said I don't recall.
5 631 Q. Would you please be careful with your answers to my
6 questions.
7 A. Sorry, I beg your pardon.
8 632 Q. Listen: I am asking you questions and you are under
9 oath and I am requiring you to be careful in your
10 answers. Will you be careful?
11 A. Yes.
12 633 Q. Very well. Do you recall this letter (Exhibit 7)?
13 A. Yes, to the best of my knowledge, yes.
14 634 Q. Yes. Did you get other letters such as that?
15 A. I can't recall.
16 635 Q. You cannot recall. This is a letter which says the
17 amount of the loan to you was £179,000, is
18 that right?
19 A. Correct.
20 636 Q. It is:
21 "Purpose - the funds are being placedat your disposal to finance your
22 spring/summer purchases mainly fromyour Italian suppliers"?
23
24 A. Yes.
25 637 Q. Who were you Italian suppliers?
26 A. Who were they?
27 638 Q. Yes?
28 A. Pop 84.
29 639 Q. Yes?
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1 A. Pooh.
2 640 Q. Yes?
3 A. Stratos, Wampum.
4 641 Q. Yes?
5 A. That is four or five.
6 642 Q. From Italy?
7 A. Yes.
8 643 Q. Yes. The drawdown then was:
9 "We have agreed to an exposure on yourbehalf in the form of Letters of
10 Credit."
11
12 This, in fact, was a facility letter referring to
13 your Letters of Credit?
14 A. Yes.
15 644 Q. This was from Guinness & Mahon to you, from
16 Mr. O'Dwyer. Had you met Mr. O'Dwyer before?
17 A. I don't recall.
18 645 Q. You do not recall. Would you just turn to
19 another letter now, on September 1986? It is
20 number 36 (Same Handed) (Exhibit 8). This is
21 another letter that you supplied us with. This is
22 to Martin. That is Martin Keane, is it not?
23 A. Yes, that is right.
24 646 Q.
25 "As agreed during our telephoneconversation to day I enclose herewith
26 up to date figures."
27
28 You had been on the phone with him?
29 A. Yes.
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1 647 Q. Is that right?
2 A. Yes.
3 648 Q. Yes.
4 "Our auditors have promised draftaccounts."
5
6 Mr. Keane was looking for draft accounts?
7 A. Correct.
8 649 Q. Yes.
9 "Once again my sincere apologies formaking a "Nuisance" of myself to you.
10 I appreciate very much your..."
11
12 This is a letter to Martin Keane about the
13 Letters of Credit in September 1986?
14 A. Correct.
15 650 Q. Would you turn to another letter, page 39
16 (Same Handed)? This is another letter to Mr. Keane
17 on the 2nd March 1987 (Exhibit 9)?
18 A. Correct, yes.
19 651 Q. It is:
20 "Dear Martin, regarding our recentmeeting and subsequent telephone21 conversation I wish to confirm that our
requirements for Spring/Summer 1987 are22 as follows ..."
23
24 And they are set out:
25 "...all in favour of Pantrem andC.S.P.A."?
26
27 A. Yes, yes.
28 652 Q. Who is Pantrem?
29 A. Pop 84.
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1 653 Q. Pop 84. Italian?
2 A. Yes.
3 654 Q. Who was C.S.P.A?
4 A. That is just Company Limited in Italian.
5 655 Q. Sorry?
6 A. That is Company Limited in Italian, that is as far
7 as I recall. It is not Pantrem and C.S.P.A. It is
8 Pantrem C.S.P.A. ...(INTERJECTION).
9 656 Q. However, that is what the letter says?
10 A. Well, the letter is incorrect.
11 657 Q. I see. Very well. It was to Pantrem?
12 A. Yes.
13 658 Q. Pantrem seemed to have been -- this was a
14 substantial amount of business you seemed to do with
15 the Italian suppliers. Used you approach them
16 direct or how did you place the orders?
17 A. We placed the orders the same way as we place them
18 on everything else, forward orders.
19 659 Q. Yes?
20 A. We sold six months in advance and placed the orders
21 with them and...(INTERJECTION).
22 660 Q. How would you decide to place the orders with these
23 Italian firms? Was this as a result of seeing their
24 products.
25 A. Yes, yes, yes.
26 661 Q. Where? How would you see their products?
27 A. We would see them at fairs.
28 662 Q. At fairs?
29 A. Yes.
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1 663 Q. I see. Were these Italian companies associated in
2 any way with Wallys?
3 A. Well, this is -- I think they were but directly or
4 indirectly I am not quite sure.
5 664 Q. You are not quite sure?
6 A. I am not sure.
7 665 Q. You dealt directly with them?
8 A. I dealt directly with them.
9 666 Q. I just want to understand this: You dealt directly
10 with these Italian firms?
11 A. Yes .
12 667 Q. They would then get paid by you by means of this
13 Letter of Credit and you would pay Guinness & Mahon
14 then subsequently. Where did Blue Jeans come into
15 that?
16 A. They got a commission on our sales because they
17 introduced us to Pantrem.
18 668 Q. There must be some agreement somewhere by which you
19 agreeD to give them a commission on your sales?
20 A. For marketing the product in Ireland.
21 669 Q. Is there an agreement?
22 A. An agreement? A verbal agreement? You have the
23 letter of agreement actually. It
24 is...(INTERJECTION).
25 670 Q. No. I want to know was there an agreement by which
26 you gave commission to Blue Jeans, as I
27 understand 15%?
28 A. Well, now. That was an approximate percentage that
29 I gave.
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1 671 Q. What was the agreement?
2 A. The agreement, as I said, was a pound to 0.75p
3 per garment.
4 672 Q. Yes?
5 A. It was royalties or commission.
6 673 Q. Was that agreement in writing?
7 A. Yes, there is a letter to that effect.
8 674 Q. Was that agreement in writing?
9 A. Yes, Sir.
10 675 Q. Yes. Was it in the documents you gave us?
11 A. Yes, Sir, it was.
12 676 Q. A letter saying that you...(INTERJECTION)?
13 A. From Blue Jeans, yes.
14 677 Q. Saying what?
15 A. Saying precisely that.
16 678 Q. That they were giving...(INTERJECTION)?
17 A. They would charge for their services
18 at...(INTERJECTION).
19 679 Q. At £1 per...(INTERJECTION)?
20 A. £1 per garment, yes.
21 680 Q. Can you show it to us in these documents?
22 A. Well, if it is there but I submitted it to you
23 people anyhow.
24 681 Q. We will leave it for the moment. You can get it
25 later to us?
26 A. Yes.
27 682 Q. Because I have not found it Mr. Sweeney?
28 A. Well, it was submitted.
29 683 Q. Yes, I see. Very well. It may be there but I have
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1 not found it and we can check it out?
2 A. Alright.
3 684 Q. If you were getting the goods and paying the Italian
4 suppliers, they then sent them direct to you
5 from Italy?
6 A. Yes.
7 685 Q. How would you then account to Blue Jeans for the
8 commission that you owed them?
9 A. Well, they would know the L/C facility backing that
10 they had to give us.
11 686 Q. Yes?
12 A. They would know the amount of garments we bought.
13 687 Q. Yes?
14 A. They would know the percentage commission or what
15 they were due.
16 688 Q. What would you do?
17 A. Pay them.
18 689 Q. How would you do that?
19 A. On -- when we would get paid.
20 690 Q. Yes?
21 A. As we issued invoices.
22 691 Q. Yes?
23 A. We would issue -- invoices would be issued to us
24 from Blue Jeans.
25 692 Q. Yes?
26 A. They had to see all these other invoices.
27 693 Q. Sorry? Sorry, just take it slowly a moment?
28 A. We would send out 1,000 garments. We would invoice
29 the customers. Copies of those invoices went to
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1 Blue Jeans. Blue Jeans then issued us an invoice on
2 the strength of our invoicing and we had to pay
3 them.
4 694 Q. All your business throughout these years, every
5 invoice that you sent to a customer in Ireland a
6 copy of it was sent to Blue Jeans?
7 A. Practically, yes.
8 695 Q. Were the customers in Ireland invoiced from your
9 company or from Blue Jeans?
10 A. From J.B Agencies.
11 696 Q. Yes. How was this shown in your accounts? How was
12 this transaction shown in your accounts?
13 A. Which transaction?
14 697 Q. The transaction that you were paying them 15%
15 commission?
16 A. Well, it was shown as royalties and commission paid
17 to Blue Jeans.
18 698 Q. I see. They would be in your accounts?
19 A. They are in the accounts, yes.
20 699 Q. Yes. Very well?
21 A. Yes.
22 700 Q. You can get those for us, I suppose,
23 without...(INTERJECTION)?
24 A. You just let me know what you want.
25 701 Q. Very well?
26 A. And if they are available, Sir, I shall get them for
2 7 you.
28 702 Q. Very well. I referred you to the letter of the
29 5th September 1986 (Exhibit 8). I will just refer
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1 you to the letter dated 2nd March 1987 at page 39
2 (Exhibit 9)?
3 A. Yes, I have that.
4 703 Q. To Mr. Keane?
5 A. Yes .
6 704 Q. Again:
7
8
Q
"Regarding our recent meeting andsubsequent telephone conversation."
j
10It looks as if you had fairly regular meetings with
11 Mr. Keane?
12 A. Sorry, as you can see that meeting was attended by
13 Mr. Kennedy.
14 705 Q. Yes. Mr. Kennedy then?
15 A. And...(INTERJECTION).
16 706 Q. Mr. Kennedy or yourself?
17 A. No, Mr. Kennedy.
18 707 Q. No, sorry. Frequent meetings either by Mr. Kennedy
19 or yourself?
20 A. Well, I was at some of the meetings but this, the
21 financial end, was more Mr. Kennedy's end but, yes,
22 I met Martin Keane at one or two meetings earlier
23 on, or one meeting. This one here (INDICATING).
24 708 Q. I am sorry?
25 A. The 13th January letter (Exhibit 2).
26 709 Q. I am sorry Mr. Sweeney. Are you telling us now that
27 you only meet him once?
28 A. Sir, I am honestly telling you I don't know how
29 many times I met Martin Keane.
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1 710 Q. Does this correspondence not show you that you meet
2 him fairly regularly?
3 A. Not fairly regular, no, Sir, it does not.
4 711 Q. It does not?
5 A. No.
6 712 Q. I see?
7 A. No, it does not.
8 713 Q. You are not able to assist us beyond what is shown
9 in the letters as to the times you would have seen
10 him?
11 A. The frequency I meet Martin Keane?
12 714 Q. Yes?
13 A. I did say that we may have meet him once a year.
14 715 Q. Yes?
15 A. For... (INTERJECTION) .
16 716 Q. "We," who is "we"?
17 A. Terry Kennedy and myself.
18 717 Q. The two of you would go?
19 A. Or Terry Kennedy on his own.
20 718 Q. On his own?
21 A. Yes.
22 719 Q. Very well. These documents that you have given us,
23 I think you have agreed that it is highly likely
24 that you would have read them, would I be correct in
25 saying that nowhere in the records in the letters to
26 you, a letter of facility to you, or in the records
27 that Guinness & Mahon has kept, is there any
28 reference to the fact that there is a letter of
29 facility that was guaranteed by Blue Jeans?
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1 A. To Guinness & Mahon from Blue Jeans.
2 720 Q. In any of the documents that you have given us would
3 I be correct in saying that there is no reference
4 anywhere to the fact that the Letters of Credit that
5 you obtained were guaranteed by Blue Jeans?
6 A. Well, I thought the letter I attached with my
7 statement said that.
8 721 Q. Which letter are you referring to?
9 A. I put in my statement a full attachment.
10 722 Q. The letter written to you?
11 A. It wasn't actually written to me. You gave it to me
12 earlier on.
13 723 Q. Yes .
14 A. I think there it is there.
15 724 Q. Page 44 (Exhibit 6)?
16 A. Is that it there? That one there? Does that not
17 say that?
18 725 Q. Yes, it does. That is a letter to you?
19 A. It is Terry Kennedy actually but J.B Agencies.
20 726 Q. Yes. Am I correct in saying that that letter to you
21 is the only reference in all of the documents that
22 Guinness & Mahon supplied to you, which refers to
23 the fact that the loan was guaranteed by Blue Jeans?
24 A. To my recollection, yes, Sir.
25 727 Q. Yes. Do you know why this letter was written, this
26 memo was written?
27 A. There may have been a delay in a guarantee and we
28 were anxious to make sure that we got it or else we
29 were out of business. That is -- may be it was
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1 urgency on our side.
2 728 Q. Are you suggesting that the Letters of Guarantee
3 depended on the action of Blue Jeans?
4 A. Mr. Wallaert.
5 729 Q. Yes. Mr. Wallaert?
6 A. Mr. Wallaert, yes.
7 730 Q. On the letters I have shown you, do they not
8 indicate that you were in touch personally, or
9 Mr. Kennedy was in touch personally, with
10 Martin Keane about the Letter of Credit?
11 A. We were, yes, but this still -- we wouldn't have got
12 facilities off Guinness & Mahon on what we were
13 willing -- what we were capable of putting up.
14 731 Q. For security?
15 A. Yes.
16 732 Q. The position then is that you negotiated the
17 Letters of Credit but you accept that you would not
18 have been able to get the Letters of Credit but for
19 this guarantee?
20 A. Yes.
21 733 Q. From Blue Jeans?
22 A. Yes.
23 734 Q. Did you tell Blue Jeans from time to time what
24 amount you were looking for?
25 A. These orders went to Belgium, to Wallaert.
26 735 Q. What orders?
27 A. The orders requiring the spring/summer -- we will
28 say the spring/summer of next year would go out now.
29 736 Q. Yes?
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1 A. They would amount to £500,000.
2 737 Q. However, are you saying that all the orders.
3 Including orders to Italy, went to Wallaert?
4 A. No, not all the orders to Italy.
5 738 Q. Yes?
6 A. The...(INTERJECTION).
7
8
739 Q. Am I correct in saying that the only orders that
you sent to the Belgian firm were orders in
9 respect of goods in respect of which the
10 Belgium firm manufactured?
11 A. Correct, yes, yes.
12 740 Q. Therefore, you would have sent -- you would have
13 bought from France and you would have invoiced them
14 directly?
15 A. Yes .
16 741 Q. How did Blue Jeans know what the Letter of Credit
17 was for?
18 A. On the invoices that we would raise on behalf of the
19 companies. They had to get copies.
20 742 Q. Did they get copies of all the invoices that you
21 sent to your Italian suppliers?
22 A. Yes, yes. Sure they were paid royalties and
23 commission on it.
24 743 Q. No, no. That was when the payment was made. As I
25 understand it as soon as you got paid from your
26 Irish supplier you sent on an a copy of the invoice
27 to Blue Jeans?
28 A. Em...(INTERJECTION).
29 744 Q. Sorry, was it Blue Jeans or was it to Belgium?
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1 A. I misunderstood your question, sorry.
2 745 Q. Was the invoice sent to Blue Jeans or to Belgium?
3 A. The financial requirement, the value of the order?
4 746 Q. I am talking about two separate things now. I was
5 asking you about the value of the order and I will
6 come back to that. As I understand it you said that
7
8
when you invoiced your Irish suppliers and they paid
you then and that you sent on a copy of this. I am
9 asking you did you send it on to Blue Jeans or did
10 you send it on to Belgium, to Wallys?
11 A. To my best recollection I think Belgium.
12 747 Q. Belgium?
13 A. I could maybe have sent it to Blue Jeans. It is a
14 possibility. I am not denying it could have
15 happened.
16 748 Q. However, you think it may be Belgium?
17 A. Yes, I think so. I think it was Belgium but then
18 again I may be wrong.
19 749 Q. You may be wrong, yes. That was the information
20 that you gave by which Blue Jeans got approximately
21 their 15% commission?
22 A. They got it. We will see from the letter that they
23 got a price per garment.
24 750 Q. Per garment?
25 A. Percentage...(INTERJECTION).
26 751 Q . Percentage?
27 A. I could be wrong mathematically.
28 752 Q. Alright. What I want to come back now to and ask
29 you about is sending on copies of orders which you
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1 had placed with your Italian suppliers. Did you
2 send copies of those orders to Wallys in Belgium?
3 A. To?
4 753 Q. To Wallys in Belgium?
5 A. No, what the purchase...(INTERJECTION).
6 754 Q. Did you send copies?
7 A. A compiled copy of the total of the value of the
8 goods.
9 755 Q. So...(INTERJECTION)?
10 A. And the number of garments.
11 756 Q. You would regularly send to Wallys?
12 A. Yes.
13 757 Q. The amount of orders?
14 A. Purchases.
15 758 Q. Purchases?
16 A. Required, yes.
17 759 Q. You had made?
18 A. Yes.
19 760 Q. Yes. Was it on the basis of that that they then
20 had the information as to the Letters of Credit?
21 A. Correct.
22 761 Q. Yes. Very well Mr. Sweeney. I just want to look at
23 this document that we have looked at already,
24 page 44. It is this memo to Terry Kennedy. This was
25 amongst the documents that you gave us (Exhibit 6)?
26 A. Yes.
27 7 62 Q. This would have been amongst the documents which
28 Guinness & Mahon sent to you?
29 A. Correct, yes.
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1 7 63 Q. Do you know how Guinness & Mahon got the memo from
2 Blue Jeans addressed to Mr. Kennedy? How it came
3 into their position?
4 A. I have no idea.
5 764 Q. I see?
6 A. They may have requested it, I don't know, but I have
7 no idea.
8 765 Q. Did you know Mr. A. J. Nichols?
9 A. Not personally, no.
10 766 Q. No, not personally. However, did you know him? Do
11 you know who he was?
12 A. A Director of Blue Jeans, yes.
13 767 Q. Do you know if he was a Director of any other
14 companies?
15 A. No, I am not aware if he was a Director of any other
16 companies.
17 768 Q. Did you know that he was a Director of
18 College Trustees?
19 A. No.
20 769 Q. Have you ever heard of College Trustees?
21 A. No.
22 770 Q. You have not?
23 A. No, Sir.
24 771 Q. You have never heard of the firm College Trustees?
25 A. No, Sir.
26 772 Q. Very well?
27 A. Yes.
28 773 Q. Thank you Mr. Sweeney. We will drop you a line and
2 9 let you know what documents we would like you to
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1 get us. Sit down. It is alright Mr. Sweeney.
2 Ms. Cummins will be in touch with you when the
3 transcript is prepared and we would ask you to
4 come in to sign it then?
5 A. Certainly, certainly.
6 774 Q. Thank you.
7
8 THE EXAMINATION WAS THEN CONCLUDED
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^ o v X o L b o r -
N X •Jcwvxcx'^^ 0 \
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Appendix XV (143) (1) (b)
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Appendix XV (143) (1) (c)
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BLUE JEANS LIMITED
PRIVATE
12th January, 1988
The Manager,Guinness Mahon Ltd.,17, College Green,Dublin 2,.Ireland.
Dear Sirs,
Guinness Mahon Cayman Trust.Limited foraoooiint of Blue Jeans Limited
Please accept this letter as your .authority, until further notioeto divulge any information requested of you by the Company'sauditors, Messrs. Linoe, Salisbury, Header & Co., of Avenue HouseSt. Julian's Avenue, St. Peter Port, Guernsey, concerning the' company's bank accounts and affairs with your bank.
Yours faithfully,
'for Blue Jeans Limited
BY COURT ADMINISTRATION UMI t Eu
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Appendix XV (143) (l )( d )
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• «J.B. AGENCIES LIMITED. Credit Memorandum •
Submit ted by: MCK
)C S: Capel Street, Dublin 1.4 Equity Stake: NO
JSINE& /
JCUPATI ON:
Clothing Importers /Wholesalers C.8. Approval : JW I /No
Permission Obtained
Data:1
I IS APP LICA TION : N«w Faci l it y /(Diktats approprbta)
A M O U N T : RATE:
(equivalent In Lire)•••M IIIMHtMK•M»N*MMN«<«
, L/CCPE:
•wjHf^wwaaatjKWuafK
... FEE:
!« H
MHH*MMH*
MNMMMM*H«HHI •««««•« ••••••
**HM«HMHM
«N«*MMHN*HlM*WNH
»MMM«M«*<NM«
1RPOSE/D R AWDOW N:
/fynce Autumn/Winter purchases from Companies mainpj, "' • in Italy (Pop. 84)- Totally seasonal requirement.
If imw or Increawdfacilities, b drawdownpermitted prior tocompletion of security?
YES/ I IOC
:RM OF FACILITIES:
s t J a n u a r y 1 98 7
REVIEW DATES:
31.1.87.
JURCE OF R EPAYMENT:'A
•CUR1TY:
srsonal guarantee of Directors, Life Policies 150k assigned to us.iequ ate security approximate value £ 1501c held.
If additional or existingfacility, b lacurlty In order?
YES/NO
If No, give detatla separately.
stCKGROUND NOTE/JTLINE OF PROPOSAL:
Company has been a customer for several years and the account has always•een conducted in order. All Imports are pre-sold at a mark up of 40%o a wide spread of customers with oniy a few large accounts e.g. Rcches,tests. Bad debt experience very good.
i lated Facil i t ies/Borrowers:
alance or .L im it, whichever is greater)
CREDIT COMMITTEE
Minute. .Z.^k?. Date. J f c J
JLJLB!:H^TLg Recommended
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Appendix XV (143) (1) (e)
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N
Date:
-. 3 APPLICATION: Hnw r.iillii/ / Additional Facility / '-"tar? / r'p
(Oa/ate as appropriate) . 'Existing facilities overleaf
TYP E: AMOUNT: RATE: FEE: f .^ .O
•»H*MM«*«N«M«n»H<«MHMM
PURPOSE/DRAWDOWN:
VAT Guarantee
If new or increasedfacilities, b drawdownpermitted prb r tocompletion of security?
YESSW0
TERM OF FACILITIES:
J 30th November, 1986 *>.'*' C....
REVIEW D ATES:
30 th Nov. 1986..* • •
SO"^CE OF REPAYMENT:
N/A •
SECURITY": ~"
Joint & Several guarantee of directors consideredadequate for £25,000
If additional or existingfacility, ii security in order?
Y E S / N O
If No , give details separately.
i A ( " G R O U N D N O T E/
Djli-s IE OF PROPOSAL:Established custom ers. VAT- guarantee cbvers W inter Imports.Company has traded very succesfully over the last severalyears. . Profits y/ e 30.4.86 . £100k+
elated Facilities/Borrowers:Balance or Limit, whichever]* greater)
L/C facility £130,0000
iosure: £155,000
CREDIT COMMITTEE
Minute FJLTLSL...
elated Facilities/Borrowers:Balance or Limit, whichever]* greater)
L/C facility £130,0000
iosure: £155,000
Recommended
elated Facilities/Borrowers:Balance or Limit, whichever]* greater)
L/C facility £130,0000
iosure: £155,000
BOARD
Minute M l . ? ] . ! !
w u .n i t ls ) Racord.fl h ' / ' = / 2 **
BOARD
Minute M l . ? ] . ! !
w u .n i t ls ) Racord.fl h ' / ' = / 2 ** A-.-..-....J
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j v . J . 0 . AGENCIES^lMlTED
Aoonsss: 10, Capel Street, Dublin t
business/ ,OCCUPATION; Clothing ImportersI,
4
THBAIfUCATlON: lt*XXUMlf/Addltbnil Faculty/WMMJMbowiartwitAII.JutMn(Dthlt a tppraprii(t)
.*>• RATS:
jL Cadit MamorandumSubmiltadby: C AW/MCK
Equity Slaks: No.C.B. Approval: Y as/NoPermloion ObtainedData:N/W
TYPfc.
K,
Guaran t ee AMOUNT: „i25,000 MNMlmmMM
'Exiitlng ficllltloa ovarlaaf
. FEE: £2.50
WmWWMMWmMKW
I POSE/DRAWDOWN:
^Guarantee
TERM OF .FACILITIES:
30th April, 1987
If i m r r Incrvandfadlitlat, b drawdownparmlttad prior tococnpfatlon of aacurlty 7
YES/IW
REVIEW DATES:
30th April, 1987
SOURCE OF REPAYM ENT:
N /A
SECURITY:
Joint & Several guarantee of directors considered adequate. £25,000
If additional or Mi ltin gfacility, c security ki ordar?
YES/NO
If No~slv< datalla wpa ralaly.
BACKGROUND NOTE/OUTLINE OF PROPOSAL: .Established cu st om e r V.A.T. guarantee covers Winter•Im port*• Company has traded very
successfully ove r the last several years. Profits y/e 30.4-86 £10UK*
1/
Helatad Facilitias/Borrowari:lalance or Limit, whichevar is greattr)
CREDIT COMMITTEE
Minut.
A,.UDSHH^IJ Recommendfld
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Appendix XV (143) (1) (g)
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A D D R E S S : 18 C'ipel Street, D u b l i n 1Equ i ty Stat"? : N O
B U S I N E S S /
O C C U P A T I O N :Clothing Importers/ Who ional or 3.
C.B. Ap proval: Yes/No
Permission Obta ined
D a te : N / A
TH IS AP PL IC AT ION : Increase / Extens ion / RKJKJtt fMKXX
(Dnlnte as nppmnrintfi) (It.Jim V>7 .mi 1 ! inn) '
T Y P E : . M . ^ ^ ' 9 f . . . C r r " ! : ! . i t . . A M O U N T : £ ) ... R A T E : F E E: f ,. l, .5 0 .. p( ? . r . . . rT l j | | e
(! nrrr; isc from LHH,')')() -/(. lini I b.7...M.i.l.l.i.on.).....
(b ) Guaran tee £30 ,000 (lncrcnso from £25,000) £300 .00
P U R P O S E / D R A W D O W N :
( a ) T o fi n a n ce S p r i n g / S u mme r p u r ch a se s f r o m ma i n su p p l i e ri n I ta l y .
( b) T o co ve r d e f e r r e d p a ym e n t s o f V A T a t p o i n t o f e n t r y .
I f new or increased
faci l i t ies, is drawdown
perm i t t ed p r io r t o
comp le t ion o f secu r i t y?
Y E S / > W ®
T E R M O F F A C I L I T I E S :
(a) To 30th May, 1987
(b) To 28th February, 1988
R E V I E W D A T E S : \
28 th Feb rua ry , 1988
SOURCE OF REPAYMENT: Main Bankers : U ls te r Ban k,
^ . . 2 /4 Low er O 'ConneJI S t re e t .F r o m ca sh f l o w . o / d £ 5 0 k L / c £ | 2 5 k
S E C U R I T Y :
Personal guarantee of d i r e c t o r s , L i f e p o l i c i e s £ 1 5 0 k a ss i g n e d t o u s .
A d e q u a t e se cu r i t y va l u e £ ! 9 6 k h e l d
C o u n t e r I n d e mn i t y r e V A T Gu a r a n t e e t o be co mp l e t e d .
I f add i t iona l or exist ing
faci l i ty , is secur i ty in order?
Y E S / N O
If No, g ive deta i ls separate ly.
B A C K G R O U N D N O T E /
OUTLINE OF PROPOSAL: J. B . Agenc ies L td . a re i n the bus iness o f c lo th ing impor te rs andw h o l e sa l e r e t a i l e r s . T h e d i r e c t o r s a n d o w n e r s a r e J i m
Sweeney & Te r ry Kenn edy. Com pany Mas been a custo me r fo r a number o f yea rs and the ac cou n thas a lways been conducted i n order. Al l imp or ts a re p re -s o ld a t a 40% mark up to a w ide sp read o fcustom ers w i th on l y a few la rge accoun ts e .g . Roches, Bests . Bad deb t exper ience ve ry good .P r o f i t s y / e 3 0 .4 . 86 - £ 1 0 0 k+ .
R e co mme n d e d .
Related Faci l i t ies/Borrowers:
(Balance or L i mi t , whichever is greater)
Tota l Exposute: £2 23 ,9 21 .
New L imit (s) Recorded by: Date
Securi ty in order for Dra wd ow n:
Dale
C R E D I T C O M M I T T E E
Minu te. . . .. Date.
A .
v Recommended
B O A R D
Minute. . . . Da te .to ,
flpprovoc^^"'*
pts.l
G.M. & Co. ( i f over E lm to ta l exposu re)
A p p r o v e d b y : . Date:
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fSS: 13 Capel S t re et , Du bl i n
S IN ES S/ C l o t h i n g I m p o r t e r s / W h o l e s a l e r s
A T I O N :
S u b m i t t e d b y :
Eq u i t y S ta k e : N O
C . B . A p p r o v a l : Y e s / N o
Pe rm is s io n Ob ta in e d
Da te : N / A
A P P L I C A T I O N : N o w F a c i li t y /
(Delete as appropriate)
PTO ->' Ex i s t i n g fa c i l i t i e s o v e r le a f
L e t t e r o f C r e d i tA M O U N T :
£190 ,700 R A T E ; F E E . P.®r_n
( I t a l i a n L i r a 3 6 9 m i l l i o n )
f i nanc e l a te S j m m e r pu r c has es f r om m a i n s upp l i e r in I t a l y - 90s i g h t d r a w i n g s . :
I f new or inc reased
fa c i l i t i e s , i s d ra wd o wn
p e r m i t t e d p r i o r t o
c o m p l e t i o n o f s e c u r i t y ?
,-f
Y E S / > W 5
R E V I E W D A T E S :
15.01.88
M a i n B ank er s : U l s te r B ank2 / 4 L o w e r O ' C o n n e l l S t .o / d £50k L /c £125kS ec ur ed by gener a l c ha r ge .
I f a d d i t i o n a l o r e x i s t i n g
fac i l i ty , is secur i ty in o rder?
F i x e d and F l o a t i n g c ha r ge ov e r c om pany as s e ts , r ank i ng a f t e r 1st
qua te s ec u r i t y v a l ue £207 ,700 he l d .
•'^Jr
Y E S / I ^
I f No , g ive de ta i ls separa te ly .
y
1 JE O F P R O P O S A L :
B . agenc i es L t d a r e c l o th i ng i m p or te r s and who l es a l e r e ta i l e r s and hav e been k nown to uss om e y ear s . A /C has a l wa y s been c on duc ted in o r de r and the d i r e c to r s and own er s o f t he
ny a r e J i m S weeney and Te r r y K enne dy . The i m p or t s a r e p r e - s o l d a t a 40% m ar k up to ac us to m e r s , t he la r ge ac c o un ts be i ng Roc hes , B es ts , S m a r t s , C l e r y ' s & S w i t z e r s . B ad
e x p e r i e n c e v e r y g o o d. P r o f i t s y / e 3 0 .4 . 8 6 £ 1 0 , 6 9 7 a c c o u n t s a t t a c h e d .
r r en t a / c £400 D R
d/a £75 C RT G u a r a n t e e £ 3 0 , 0 0 0
£220 ,700
CREDIT COMMITTEE
M i n u t e UJ 3N- D a t e . . J . . k : . . l : ¥ . Z
j L ^ l ^ ^ y ^ ^ l .
R e c o m m e n d e d
r r en t a / c £400 D R
d/a £75 C RT G u a r a n t e e £ 3 0 , 0 0 0
£220 ,700
BOARD _
Mi nut e Date . . ! . . . '.
( s ) R P r n r H o, ,u - l ' L ^c U,
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DDR ESS: 13 c a p e i S t r e e t , D u b l i n 1 .
J SIN ESS/
ccupation- C l o t h i n g I m p o r t e r s / D i s t r i b u t o r s
Equ i t y S t ake : N OC.B. Ap pr ov al : >Vfe$/No
Perm i ss i on Ob t a i ned
Dat e :
HIS APPLICATION: Wi^ ^H /icActcMMaKal XlKUiiKiX lncrease /
(Delete as appropriate) '
YPE: .....F/X..Line AMOUNT: ..£.2S0.,0Q.Q RATE: - FEE: ,
PURPOSE/DRAWDOWN:I f new or increased
PURPOSE/DRAWDOWN:f ac i l i t i es , i s d rawdown
For e i gn E x c hange Dea l i ng . p e r m i t t e d p r i o r t oFor e i gn E x c hange Dea l i ng .comp l e t i on o f secu r i t y?
Y E S / I ^
TF""" OF FACILITIES: R E V I E W D A T E S :
15 .01 .88 ( To c o i nc i de w i t h ex p i r y o f L /C fac i l i t i es ) 15.01.88
SOURCE OF REPAYMENT: Oth er B ank e r s : U l s te r B ank ,
O ' Conne l l S t .
N o r m a l t r a d i n g .
SECURITY:
P er s ona l gua r an tee o f D i r ec to r s .
L i f e P o l i c i es f o r £150k as s i gned .2nd F i x ed & F l oa t i ng c ha r ge ov e r t he c om pany ' s as s e ts , r ank i nga f te r U l s te r B ank ' s 1s t c ha r ge .S e c ur i t y c ons i de r ed adequa te f o r £207 ,700 .
I f add i t i ona l o r ex i s t i ng
fac i l i t y , is secur i t y in order?
Y E S / N O
If No, give detai ls separately.
BA ^G RO UN D NOTE/
Oy *U NE OF PROPOSAL:
L e a e r o f C r ed i t f ac i l i t i es o f £199 ,00 0 a r e p r es en t l y in p l ac e . Com pany has been dea l i ng inFor e i gn E x c hange and r equ i r es f o r m a l l i m i t . A l ine o f £250 ,000 ( r is k £25 ,000) s hou l d be s u f f i c i en t
and i s r ec om m ended .
Related Faci l i t i es /Borrowers:
(Balance or Limi t , whichever is greater)
L/C 's £199,000VAT Guarantee £ 30,000
g_TouijExpOSUrn: £254,000.
" 't is) Rccorclf i i l by. Da to:
C R E D I T C O M M I T T E E
M in u te U . . I . . L D ate ( . Q . . . J . . : . L 1 . . . .
/ R e c o m m e n d e d
B O A R D .
- Y TIH/LJ,..Lhr.i
A p p r o v e d
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N
J B Agenc ies L im i ted
E 18 Capel S treet , Du bl in 1
J£SS/ c l o th i ng Impo r te r s /D i s t r i bu te rsPATION:
Crtdtt M«moraiuiuni
Submitted by: CAW .
N
J B Agenc ies L im i ted
E 18 Capel S treet , Du bl in 1
J£SS/ c l o th i ng Impo r te r s /D i s t r i bu te rsPATION:
Equity Staka: N o
N
J B Agenc ies L im i ted
E 18 Capel S treet , Du bl in 1
J£SS/ c l o th i ng Impo r te r s /D i s t r i bu te rsPATION:
C.B. Approval: Yes/No
Ptrmlsilon Obtained
Data: N /A
APPU.CAT.ON: ^ ^ ^
L e t t e r o f C r e d i t amount: £?.99jS9&. hate: fee: £J..5Q„per..janUla..
( I t a l i an L i r e 390 m i l l i on )• • • • U a » M * H » M t n H < n M M I « M M M I I H « N > *
POSG/ORAWOOWN:
fiv' Tce late Spr ing purchases f rom m ain suppl ier In I ta ly -s igh t d raw ings .
If new or lncrtsud
(acilltfai, h drawdown
permitted prior tocompletion or wcurUy7
Y E S / M X
IM OF FACILITIES:
IS A p r i l J 988
REVIEW DATES:
15 Ap r i l 1988
JRCE OF REPAYMENT:
3m cash f low.
Main Bankers : U ls te r Bank L td .2 /4 Low er O 'C onne l i S t ree to /d £50k : L /C £ l 25 k .
Secured by oenera l charoe.
JURITV:
rsonal guarantee or d i rectors, l i fe pol ic ies £150k assigned to us.
cond F ixed and F loa t ing charge over compar ty assets , rank ingter f i rs t charge to U ls te r Bank .
let , s secu r i ty value £220,000 held .?
i
If additional or exlitlngfacility. Is taourlty In order?
yes M1f No, glvadotal)* aaparataly.
vCKGR OUNO NOTE/
JTUNE OF PROPOSAL: -
B Agenc ies L id . a re c lo th ing Impor te rs and who lesa le re ta i le rs , and have been known to us fo rme years . A /C has a lways been condu c ted In o rder and the d i rec tors and owners o f the companye J im Sweeney hnd Terry Kennedy . The impo r ts a re pr es o l d a t a 4 0% mark -up to a w ider range
custo me rs; the large accounts being Roches, Bests,' Sma rts, Clerys & Swl t ie rs. Bad debtper fence very good. Es t imated pro f i t s year ended 30/4 /87 £30,000.
scorn mended.
elated F«cilillm/8ofro«"irj:lalanca or Llmli, wltichavar Is paalRf)
C R E D I T C O M M I T T E E
Mlnuta W ± 2 , r
j r i . Accoun t £ ICR
3p Account £ 74CR
c->n rvK)
L b f c ^ J l i ,Rocommnnded
¥
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B U S I N E S S / C B. App rova l : Yes /No
O C C U PA T IO M ( D o t h i n g I m p o r t e r . s / l ) i s i r i l j u i o r s . Ter m i ss io n O b t a i n e d
•Date : N / A
TH IS AP PL IC A T IO N : N t i r a f tw ^x t .Y ; / ,Wk ! * i *X !X i J (K f fH f t t t .Vx ' jm S ' * * ' Ex tens ion / IVm Iv.S^'X .x
{Dclcln ns n/'priipr inlr)
V A T G u a r a n t e eT Y P E : A M O U N T : f? A T F
' Ewt'X «ng tfarj) i x x
.. TE E: P- 'T-
c o v e r d e f e r r e d p a y m e n t s o f V A T a t p o i n t o f e n t r y .
I f now or increased
fac i l i t ies , i s d rawdown
pe rm i t t ed p r i o r t o
com p le t i on o f secu r i t y?
Y 1 5- 7 W 3 N / A
O F F A C I L I T I E S :
x ' . * s i o n f o r 6 m o n t h s .
R E V I E W D A T E S :
3 1 s t A u g u s t , 19 88
Ov- JE O F R E PAY M E N T : U l s t e r H a n k , 2 / 4 , L r . O ' C o n n e l
S t . O / D 5 0 k ; L / C 1 25 k
S e c u r e d b y g e n e r a l c h a r g e .
g u a r a n t e e o f D i r e c t o r s . L i f e P o l i c i e s 1 50 k a s s i g n e d t o
. S e c o n d F i x e d a n d F l o a t i n g C h a r g e o v e r c o m p a n y ' s a s s e ts r a n k i n g
r F i r s t C h a r g e to U l s t e r B a n k L t d . A d e q u a t e s e c u r i t i e s v a l u e d£ 2 2 0 , 0 0 0 h e l d . • - , , , ' i ;
I f add i t iona l o r ex is t ing
fac i l i t y , is secur i ty in o rder?
Y E S / N O
If No, ( j ive detai ls separately.
R O U N D N OT E/ L / C f a c i l i t y o f £ 2 0 0 , 0 0 0 r e c e n t l y a p p r o v e d e x p i r e s t i e x l m o n t h . T h e e x t e n s i o n n o w
C ^ i N E OF P RO PO SA L: r e q u e s t e d t o e n d o f A u g u s t w h e n t h e c o m p a n y w i l l s u b m i t n n a p p l i c a t i o n
e r i n g i t s o v e r a l l r e q u i r e m e n t s f o r t h e f o l l o w i n g y e a r . T h e c o m p a n y h a v e b e e n k n o w n t o l is f o r s o m
e ^ s T h e a c c o u n t h a s a l w a y s b e e n c o n d u c t e d i n o r d e r . D i r e c t o r s a n d s h a r e h o l d e r s a r e J i m S w e e n e y
e r r y K e n n e d y . T h e g o o d s i m p o r t e d a r e p r e s o l d a t a m a r k u p o f 4 0 % t o w e l l k n o w n r e t a i l o u t l e
h a s R o c h e s S t o r e s , A r n o t t s , S m a r t s , C l e r y s a n d S w i t z e r s . H a d d e b t s a r e m i n i m u m . E s t i m a t e d
f i t s f o r Y / E 3 0 . 4 .1 9 8 7 £ 3 0 , 0 0 0 .
r e c o m m e n d e d .
t t e r o f C r e d i t F a c i l i t y £ 2 0 0 , 0 0 0
Exposure: £2 . ' 30 ,000 .
Lim it(s) Recorded l i y I ), it<:
in order fnr Drawdown
C R E D I T C O M M I T T E E
I SIXM inu te .
B O A R D
onto...2..
' J^JJB^
G.M. & Co. ( i l over E 1m to ta l oxposme)
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isir-n-sr./
13, ( ;ipH St reel, Dublin, I.
( |nt liing Import ers/Disl ribut oi s
F'luiiy Si.il': f\J,)
C I). Appr oval: ^'^Mo
Permission Obtained
[ 3 n r r-:
KoX:Kr.* W K W i > i < K i / M X nnv / Extension
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To c o v e r d e f e r r e d p a y m e n t o f V A T a t po i n t o f e n t r v .facilities, is drawdown
permitted pi inr to
T o f i n a n e e p u r c h a s e s fr om s up pl i e r s , m a i n l y It a l i a n . completion of seem ily ?
T o c o v e t F o r e ig n E x c h a n g e d e a l i n g s ./ N O
D O W N : A l r e a d v in p l a c e .
M n r TACIIJ TIES: REVIEW DATES:
T V e a r 3 1 / 8 / 1 9 8 9
LP AY ME N T:O T H E R H A N K S :
N o r m a l T r a d i n g U l s t e r H a nk , O ' C o n n e l l S t . ,DiId in, 1 .
C c r s o n n l G u a r a n l e e s of T . K e n n e d y a n d J .H . S w e e n e y ,
l i fe P o l i c i e s o n D i r e c t o r s f or £ 2 5 0 K e a c h , a s s i g n e d t o G & M .S e c o n d f i x e d arid f l oa t in g c h a r g e o v e r c o m p a n y ' s a s s e t s r a n k in g
a f t e r U l s t e r H a n k s f i r s t c h a r g e f o r I R £ 2 0 0 , 0 0 0 * .
t i t y c o n s i d e r e d a d e q u a t e t o (.lie e x t e n t , o f I R £ 3 0 7 K .
I f a d d i t i o n a l o i e x i s t i n g
fac i l i t y , i s sec u t i l y i n o r de r ?
I f N o , g i ve de ta i l s sepa ia te l y .
N e w g u a r a n t e e f or i n c r e a s e d
a m o u n t t o b e c o m p l e t e d .
F i x e d a n d f l o a t i n g c h a r g e s t o
b e s t a m p e d u p t o I R £ 3 8 0 , 0 0 0
NE Of: PROPOSAL:
/ n c i e s I , id . h a s b e e n a c l i e n t s i n c e 1 9 8 3 . A s t u r n o v e r i n c r e a s e d s o d i d i t s l ./ C ' r e q u i r e m e n t s .a p p e n d i x s u m m a r i s e s t h e t r a d i n g r e s u l t s . a n d f in a n c i a l p o s i t i o n . S m a l l p r o f i t s / b r e a k e v e n h a s
t h e n o r m a l t h o u g h it i s t h a t t h i s d o e s n ot a c c u r a t e l y r e f l e c t t h e t r u e p r o f i t a b i l i t y o f t h eA c c o u n t s for Lho y e a r e n d e d 3 0 / 4 / 8 8 a r e d u e s h o r t l y a n d a r e e x p e c t e d t o s h o w
H i c n s e in d e c l a r e c ' p r o f i t s . M a n a g e m e n t i s e x p e r i e n c e d in t h e r a g t r a d e a n d t h e a c c o u n tc o n d u c t e d . S e c u r i t y is c o n s i d e r e d a d e q u a t e t o th e e x t e n t o f I R £ 3 0 7 K. T h i s i s l i k e ly t o
o v e t o IR £ I 00 K a p p r o x i m a t e l y in t h e c o m i n g y e a r . R e c o m m e n d e d .
i'd rai:ili|ii's/Rni rowei s:
nce or Limit, whichever isqieatei)
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Cxposm- IR £380,000
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3 0 , 0 0 0
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CREDIT COMMITT EE
Minnie f|..'rr Date <?.;?....£....?..!:'
A [xA.^A.
Recommended
B O A R D
Minnie / t^.e
Appn'ved
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Appendix XV (143) (1) (m)
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U/ 87 '90 I0t27
11/87 >90 lei^ty
S 733032 JB lGEHCIE? TD
2 733032 JB MEI ICI ^LT D
i •«!'• 048126218
0 1
0 1
t
To:
Company:
Telefax No:
Prom:
Re:
Date:
MESSAGKi
TELEFAX COVER
Tftgyy f t o s d j 1
J. B. Attendee Limited
m \ - m m
BlM# J^fnf LlnlfcitL
of i /f t FmlHffflf t-
26 <6,9.0. ,, Tlraw NoTofPauM j i(Including cover)
W* wish Co confirm th at wo ere w il l i n g to gu aran tee L et te r ofCr edi t f a c i l i t i e s p rovided eo yo urs e lv es up to a naxlmum ofs t e r l i n g £475 ,000 . We can prov'ida c o l l a te r a l in the form of cashde po s i ts in suppor t of any ouch g uar an te e .
for BLUE JEANS LIMITED
A. J. NicholsD i r e c t o r
<D >
' y»« i<> nM a o o l v i il (hi |M(et, or If any ponlnn of ttw Utniinl n|on U IlleilWc, ple»i« nmlfy Ui »<»utiptimie, It left* or Lid* ImiiKxttiu/)' n t
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Appendix XV (143) (2) (a)
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22/01 02 TUE 12:04 FAX 00 IVOR FITZPATRICK® 0 0
IVOR FITZPATRICK & CO.NO L I C I T O R S
44 - 45 ST. STEPHEN'S GREEN, DUBLIN 2.
TELEPHONE: +35 3 1 678 7000 FAX: +353 I 678 7004 DX 53 D UBLIN.
E-MAIL: [email protected] website: Www.ivortitzpatrick.ic
Mary CumminsSolicitor to the Inspectors3rd FloorTrident House Our ref : DC_SEC266
Y o u r r ef : C / K 0 9 & C / S 0 2Direct Fax : 661 3555
22 January 2002
BlackrockCo. Dub lin
BY FAX: 2833929
Re: Our Clients - Jam es Sweeney and Terry Kennedy - JB Agencies Limited
Dear Sirs,
W e refer to previous correspondence in this matter and mak e the following Submission inrespect of your draft preliminary conclusions:-
The ev idence adduced does not allow for a definitive conclusion as set out in the Insp ectorspreliminary conclusions. The Inspectors are of the view that JB Agencies Limited is a clientof Ansbacher together with the com pany called Blue Jeans Limited. There should not be aconclusion that JB Agencies Limited is a client of Ansbacher. JB Agcncies Limited has noknowledge of GMCT Limited and never had such knowledge and does not accept that it wasa client of Ansbacher. JB Agen cies Limited had a business relationship with a companycalled Blue Jeans Limited. As far as JB Agencies Limited was concerned its bankingrelationship is with Gu inness & Mah on Lim ited, 17 College G reen.
The existence of the letter of the 12 t h January 1988 is not relevant to the issue in so far as JB
Agencies Limited is concerned. They are not the authors of the letter, they did not authorisesam e and it was not addressed to them. W hatever relationship M essrs. Blue Jeans Limitedhad with Guinness and Mahon or any accounts, which it may have had with it are not amatter for concern of JB Age ncies Limited. Hav ing said that the form of the letter is highlyunusual in that it is not on the notepaper used by Blue Jeans Limited and it is not knownwhen the name Blue Jeans Limited was actually typed onto the letter and is of different typeto the rest of the letter and w ould clea rly have been done at a different time to the rest of theletter.
Another document also relied upon by the Inspectors is an internal GMI credit memo dated2 7 t h of August 1988. The Inspectors have concluded that the author of the document in GMI
Jennifer Slunden. D eirdre Courtney, Ivor Fitzpatrick, Cormac G ordon. John King, Mary-Claire Mork ty, Bernard McEvoy, Michael J. O'Connor, Margaret Scully. SuS»o R. Stapleton.
John Burke, Karen Hickey D wyer, Susan Fenton, Ita Guilfoylc, Edel Kirley. Lorna McAullffe,Tflona Molloy. Dym pna Murphy. O rlaith O'Brien, Lisa Richardson, Mil an Schuster.
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22/01 '02 TUE 12:04 FAX 00 IVOR FITZPATRICK @ 0 0
2
thought that JB Agencies Limited beneficially owned the deposit of B lue Jeans Limited. Thisconclusion canno t be arrived at and does not arise from the docum ent in question .
In summary the Inspectors have reached a conclusion that JB Agencies Limited was a client
of Ansbacher. JB Agencies Limited never had any dealings with Ansbacher and did itsbanking with G uinness & Mahon of 17 College Green. Mr. Sweeney & Mr. Kennedy of JBAgencies Limited w ere not aware of the connection between Guinness & M ahon Limited andAnsb acher. The Inspectors should not reach a conclusion for which there is no evidence thatJB Agencies Limited is a "client" of A nsbacher.
Yours faithfully,IVOR FITZPATRICK & CO,
IVOR FITZPATRICK & CO
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Appendix XV (144) Mr Ray Carroll
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MrRay Carroll.
a) Transcript of evidence of Mr Ray Carroll dated 13 February 2001.
b) Guinness and Mahon credit memo of 11 August 1988.
c) Letter of 24 December 1986 - MJ Pender to BA Ursell.
d) Appendix 10 of Central Bank report on G uinness and Mahon at 30 April1978.
e) Guinness and Mahon statement of 20 January 1986 re GM CT/College re.Sumac.
f) Guinness and Mahon statement of 31 March 1980 re Guinness MahonGuernsey Limited.
g) Internal IIB minute re credit application of Murray Group Holdings of 3February 1989.
h) Letter of 11 Novem ber 1988 - IIB to KPMG Stokes Kennedy Crowley.
i) Letter of 23 July 1993 - Mr Ray Carroll to IIB.
j) Letter of request for information from KPMG Stokes Kennedy Crowley toIIB dated 31 December 1992.
k) Letter of 11 November 1988 - IIB to KPMG Stokes Kennedy Crowley.
1) Letter and attachmen ts of 12 October 1987 - GMCT to Guinness andMahon.
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Appendix XV (144) (1) (a)
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PRIVATE EXAMINATION OF MR. RAY CARROLL
UNDER OATH
ON TUESDAY, 13TH FEBRUARY 2001
I hereby certify the
following to be a true and
accurate transcript of my
shorthand notes in the
above named interview.
Stenographer
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PRESENT
The Inspectors: HIS HONOUR JUDGE SEAN 0'LEARY
MS. NOREEN MACKEY BL
Solicitor to the Inspectors: MS. M. CUMMINS
Interviewee: MR. RAY CARROLL
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WITNESS
I N D E X
EXAMINATION
MR. R. CARROLL JUDGE 0'LEARY
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1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,
2 13TH FEBRUARY 2001:
3
4
5 JUDGE O'LEARY: My name is Sean O'Leary.
6 I am one of the
7 Inspectors; all right?
8 MR. CARROLL: Yes, sure.
9 JUDGE O'LEARY: And this is Noreen Mackey.
10 She is another one of the
11 Inspectors.
12 MR. CARROLL: Okay.
13 JUDGE O'LEARY: We are the two Inspectors
14 that are considering this
15 small aspect of it and it is a small aspect of the
16 thing. It is not a major aspect of the thing.
17 We have a number of questions to ask you and it
18 will be very informal and it should not be lengthy.
19 The only formality in it really is the taking of
20 the oath because we are required to have the matters
21 under oath. If you would take the oath we will ask
22 you the questions then?
23
24
25
26
27
28
29
4
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1 MR. RAY CARROLL, HAVING BEEN SWORN, WAS EXAMINED BY
2 HIS HONOUR JUDGE O'LEARY AS FOLLOWS:
3
4
5 1 Q. JUDGE O'LEARY: Mr. Carroll, could I first
6 of all thank you very much
7 for coming. This is, as I say, a reasonably
8 informal procedure. We are gathering information
9 about a particular company and you know the name
10 of that company. It is "Ansbacher" and it has had
11 various other names in the past and I know that you
12 felt, according to the letter which you sent to us,
13 that you had nothing to do with that company.
14
15 Unfortunately, we have found that quite a number
16 of people who genuinely believed they had nothing
17 to do with the company actually had something to do
18 with the company even though they might not have
19 known it. We have to enquire of these people
20 whether they were clients of "Ansbacher" because
21 that is one of the things we have to report to the
22 Court.
23
24 We are not inquiring into your personal affairs.
25 We are not inquiring into your tax affairs. That
26 is nothing to do with us. We are merely fulfilling
27 our duty to the High Court by reporting on the
28 company and its activities and finding out who the
2 9 customers of the company were.
5
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2 I think you come into the picture because I think
3 you were employed by, and indeed had some interest
4 in, the Murray Group at one stage; is that correct?
5 A. That is right, yes.
6 2 Q. And what was your position in the Group,
7 Mr. Carroll?
8 A. I joined the Group in 1953.
9 3 Q. Yes?
10 A. I had been a qualified accountant and I had
11 been an Audit Assistant with a couple of companies.
12 4 Q. Yes?
13 A. And I went in as an accountant I suppose.
14 5 Q. Yes?
15 A. And I became Financial Director some time in
16 the 1960's.
17 6 Q. Yes?
18 A. I haven't got the precise date.
19 7 Q. Yes?
20 A. And then I became Chief Executive in 1977 until
21 1991.
22 8 Q. Yes?
23 A. And I resigned in 1995.
24 9 Q. Yes?
25 A. The 30th June 1995.
26 10 Q. Yes?
27 A. And I resigned all Directorships.
28 11 Q. Yes, I understand?
29 A. And I did have a shareholding in the Group, which
6
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1 was 9%.
2 12 Q. Yes?
3 A. Which had been acquired in the 1960's.
4 13 Q. Yes?
5 A. And that was purchased by the Group in 1993.
6 14 Q. From you, yes?
7 A. So, that is it.
8 15 Q. And your exit from the Group was part of the normal
9 retirement process?
10 A. Yes.
11 16 Q. That would be the best of way of describing it?
12 A. Yes, yes.
13 17 Q. Yes. I think, if you like, you acted as Chief
14 Executive and you acted as an important cog in
15 the wheel of the company during the period of
16 time in which the older generation were in charge,
17 if I could put it like that; is that correct? The
18 Mr. Murray that is now dead?
19 A. Yes.
20 18 Q. Yes. He died. When did he die?
21 A. He died in 1995.
22 19 Q. Before you retired any way I think; was it not?
23 A. No, no.
24 20 Q. Was it after you retired?
25 A. Yes, it was after I retired.
26 21 Q. After you retired. I see, yes. 1994; was it?
27 A. I will get it for you now.
28 22 Q. That is grand. I think it was 1994; all right?
29 A. Okay, Judge.
7
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1 23 Q. Did your company -- I am talking about the company
2 now only because -- not because I want to go into
3 the details of the company with you; I do not. I
4 have already spoken to Mr. Harold Murray about that.
5 So, you need not worry about the company too much?
6 A. Yes.
7 24 Q. However, the company had a business relationship
8 with Guinness & Mahon; is that correct?
9 A. They had, yes.
10 25 Q. Yes?
11 A. If I could just go back on what you said?
12 26 Q. Yes?
13 A. He died in January 1995.
14 27 Q. January 1995?
15 A. Yes.
16 28 Q. Was it as late as that in fact?
17 A. Yes, yes.
18 29 Q. Thank you. The company had a business relationship
19 with Guinness & Mahon. How did that come about;
20 that business relationship?
21 A. Well, the Group used to borrow funds from all the
22 various financial institutions.
23 30 Q. Yes?
24 A. And amongst them was Guinness & Mahon.
25 31 Q. Yes. Were Guinness & Mahon, if you like, the
26 principal bankers of the Group?
27 A. No.
28 32 Q. Not really, no?
29 A. They weren't, no. We dealt with the Bank of Ireland
8
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1 all the time.
2 33 Q. Yes?
3 A. And we dealt with UDT very substantially in
4 the earlier days.
5 34 Q. Yes?
6 A. And after that Ford Motor Credit. May be
7 Lombard & Ulster.
8 35 Q. Yes?
9 A. That is it.
10 36 Q. Yes?
11 A. They were the main bankers, yes.
12 37 Q. Do you remember in 1974 when Mr. Harold F Murray
13 established a Trust called the Woodward Trust?
14 A. Yes, yes.
15 38 Q. You remember that?
16 A. I do, yes. I remember that.
17 39 Q. Yes. I knew that was established?
18 A. Although, if I could say, my memory doesn't go
19 back clearly to 30 years ago or whatever it was.
20 40 Q. No. You can take it that I know that the Trust
21 was established any way?
22 A. But you kind of...(INTERJECTION).
23 41 Q. Yes?
24 A. In fact when I knew I was coming here you research
25 and you kind of rack your memory to say, "Well, what
26 happened on all these occasions?"
27 42 Q. Yes?
28 A. And, yes, certainly.
29 43 Q. Yes?
9
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1 A. Yes, I remember that.
2 44 Q. You remember all that?
3 A. Because it arose because properties within the
4 Group were sold and there were kind of windfalls
5 for the company.
6 45 Q. Yes?
7 A. Because they didn't come in the normal routine of
8 business. There were properties in Haddington Road
9 which were used for parking cars, car maintenance
10 and the funeral business.
11 46 Q. Yes?
12 A. And then Esmonde Motors operated from Serpentine
13 Avenue and that arose quite unexpectedly because
14 AIB were buying up all the land around there.
15 47 Q. All the land, yes.
16 A. Yes.
17 48 Q. They were little windfalls that he put aside in
18 the Woodward Trust?
19 A. Yes.
20 49 Q. And I am not criticising him in any way about the
21 Woodward Trust. I am just saying as a fact that
22 it was established?
23 A. Yes.
24 50 Q. Who were the beneficiaries of that Trust?
25 Do you know who the beneficiaries were?
26 A. The beneficiaries of the Trust? No.
27 51 Q. If you do not know say so?
28 A. I don't know is what I am saying.
29 52 Q. Were you one of the potential beneficiaries
10
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1 yourself?
2 A. I was because -- yes. I am not sure I was
3 mentioned specifically as a beneficiary.
4 53 Q. I understand that?
5 A. Yes.
6 54 Q. However, we are not talking about, I am not talking
7 about, the pieces of paper now?
8 A. Okay.
9 55 Q. I am talking about the reality of the situation?
10 A. Yes.
11 56 Q. I am not saying you ever got anything out of it.
12 That is a different matter altogether?
13 A. Yes.
14 57 Q. Which I am not particularly interested in?
15 A. Yes.
16 58 Q. However, at the time you understood that you
17 had some interest in it, which reflected your
18 shareholding in the company; is that it?
19 A. Yes, yes.
20 59 Q. So if you had a 9% interest in the company?
21 A. That is right, yes.
22 60 Q. You had a 9% interest in the Trust?
23 A. Yes.
24 61 Q. How that was expressed at a later stage is another
25 matter?
26 A. Yes, yes.
27 62 Q. Which we are probably not going to go into at all.
28 Would that be a fair summary of the position?
29 A. Yes, the reason...(INTERJECTION).
11
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1 73 Q. I understand that?
2 A. And he was advised by financial advisors.
3 74 Q. Yes?
4 A. That this was a good thing to do and it
5 was...(INTERJECTION).
6 75 Q. And who actually established the Trust for him?
7 Who was, if you like, the organiser of it?
8 A. Well, it was set up because of advice that he got
9 from Stokes Kennedy Crowley.
10 76 Q. Yes?
11 A. And presumably Guinness & Mahon were involved as
12 well.
13 77 Q. Yes, Guinness & Mahon as well. Was he dealing
14 with Guinness & Mahon at that stage?
15 A. He was in the sense that these properties were
16 realized in 1973.
17 78 Q. Yes?
18 A. They didn't come together but it was just they
19 occurred reasonably close to one another.
20 79 Q. Yes?
21 A. I think it was the middle of 1973 and may be a
22 month or so later. That was just a coincidence.
23 So, he had the money. He deposited the money
24 with Guinness & Mahon in Dublin.
25 80 Q. And ultimately put it into a Trust?
26 A. Yes.
27 81 Q. Where was that Trust located; do you know?
28 A. It was in Jersey.
29 82 Q. In Jersey?
13
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1 A. Yes.
2 83 Q. Yes. It was not in the Cayman Islands?
3 A. No, no.
4 84 Q. Yes, all right. After that time I presume from
5 time to time it became necessary for the company
6 to borrow money?
7 A. Yes, the company relied heavily on borrowings.
8 85 Q. On borrowings, yes?
9 A. Because the main business at that time was the car
10 rental business and that relied on...(INTERJECTION).
11 8 6 Q. Do you remember that at that time loans were got
12 from Guinness & Mahon for various business purposes?
13 A. Yes, yes.
14 87 Q. Do you remember that they were guaranteed by
15 individuals and by the company and also by backing
16 deposits from the Trust?
17 A. No.
18 88 Q. You do not remember that at all?
19 A. I do remember that they weren't back to back.
20 89 Q. They were not back to back?
21 A. No.
22 90 Q. At any stage?
23 A. No, the reason for that is that it was a
24 Discretionary Trust and it was -- the money was
25 transferred through this Trust onto the Settlor;
26 this guy Woodward.
27 91 Q. Yes?
28 A. And it was managed by Guinness Mahon Jersey Limited.
29 92 Q. Yes?
14
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1 A. And they were the Trustees.
2 93 Q. I see?
3 A. And H. F. Murray had effectively transferred
4 ownership of that money into this Trust. So, it
5 is like all these Trusts; he relied therefore on --
6 it was gone out of his control.
7 94 Q. Out of his control?
8 A. Yes .
9 95 Q. Yes. Of course I understand that is the theory of
10 it?
11 A. So, the Trust -- unless they got authorization from
12 H. F. Murray -- who probably had because of Letters
13 of Wishes and so on -- he relied on the Trustees
14 then to carry those out, those wishes out, because
15 effectively he had lost control of these funds.
16 96 Q. I see?
17 A. So, unless he gave authorisation they couldn't
18 have a back-to-back arrangement.
19 97 Q. I see?
20 A. And he didn't.
21 98 Q. I see. Well... (INTERJECTION)?
22 A. And...(INTERJECTION).
23 99 Q. Could I first of all explain to you, Mr. Carroll,
24 that Guinness & Mahon have told us that during the
25 1970's and 1980's, during almost all of that period,
26 they had internal documentation?
27 A. Yes .
28 100 Q. Not necessarily dealing with your company?
29 A. Yes .
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1 101 Q. However, dealing with many other companies?
2 A. Yes.
3 102 Q. Where they advanced money and it was backed by
4 funds?
5 A. By, sorry?
6 103 Q. Funds from abroad?
7 A. Oh, yes.
8 104 Q. It was backed by funds from abroad?
9 A. Yes, yes, yes.
10 105 Q. They used a code in their documentation?
11 A. Yes, yes.
12 106 Q. Which said that it was...(INTERJECTION)?
13 A. I know the code.
14 107 Q. "Adequately secured"?
15 A. Yes.
16 108 Q. Or "considered adequate"?
17 A. Yes.
18 109 Q. Security "considered adequate"?
19 A. Yes, or "considered suitably secured".
20 110 Q. Considered...(INTERJECTION).
21 A. Suitably.
22 111 Q. Suitably?
23 A. Suitably secured.
24 112 Q. "Suitably secured"?
25 A. Yes.
26 113 Q. Yes?
27 A. We had all that out with Guinness & Mahon because
28 this all arose about two years ago.
29 114 Q. Yes?
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1 A. Now, I wasn't in the company but I became
2 involved because I had been involved.
3 115 Q. Yes. What I want to show you now...(INTERJECTION)?
4 A. Around the time.
5 116 Q. I want to show you an internal memo from
6 Guinness & Mahon?
7 A. Yes. Well...(INTERJECTION).
8 117 Q. Which deals with that letter?
9 A. Yes. Well, we had to lot of dealings with --
10 I mean I call the Irish Permanent Guinness & Mahon,
11 you know, and I often wonder where Irish
12 Permanent/Guinness & Mahon stand in all of
13 this but...(INTERJECTION).
14 118 Q. They have to answer for their own situation?
15 A. I know they do.
16 119 Q. For their situation?
17 A. But it makes you wonder because they are responsible
18 for all of this as far as I can see but I have a
19 letter from the Irish Permanent at one stage, and it
20 is some time in the last year or so, and they say
21 quite specifically that there was no, how did they
22 put it, assignment of funds or a letter assigning
23 the funds to back any loans.
24 120 Q. Yes?
25 A. So, that is quite specific.
26 121 Q. I see. You might give us that, a copy of that
27 letter, if you have it?
28 A. Yes .
29 122 Q. I wonder would you show Mr. Carroll number 241,
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1 Exhibit 1, page 241 (Same Handed)?
2 A. The other thing about it, Judge, is that
3 Guinness & Mahon were quite anxious, keen or
4 willing, to lend funds.
5 123 Q. I understand that, of course?
6 A. So, we didn't need these other funds or Mr. Murray
7
8
we didn't need these other funds to borrow funds
and in fact we, the Group, bought a property out
9 in Glenageary, I think it was £300,000, some time
10 may be in the late 1970's or early 1980's and it
11 was Guinness & Mahon who funded that and they
12 also funded significant letters of guarantee
13 for Ford Motor Credit and the Bank of Ireland
14 for insurance premiums; for payment of insurance
15 premiums.
16 124 Q. Yes. Well, now...(INTERJECTION)?
17 A. So, in other words there was a credit facility
18 there.
19 125 Q. However, Mr. Carroll, if you have an accountancy
20 background which you tell me...(INTERJECTION)?
21 A. Sorry?
22 126 Q. If you have an accountancy background?
23 A. Yes .
24 127 Q. Which you tell me you have?
25 A. Yes .
26 128 Q. As indeed I have myself; ever before I was a lawyer?
27 A. Yes, certainly, yes.
28 129 Q. You will be well aware that banks will never
29 refuse a second or third backing for their loans?
18
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1 A. That is it, yes. That is it. They
2 take...(INTERJECTION).
3 130 Q. If they can take it?
4 A. They take everything.
5 131 Q. They take everything they can get?
6 A. Yes, yes.
7 132 Q. All right. If you look at "GMI", Exhibit 1?
8 A. I see it there.
9 133 Q. Do you see that there?
10 A. Yes.
11 134 Q. This is only one of a number of ones?
12 A. Right, right.
13 135 Q.
14
"Security considered adequate"
15
16
17 A. Yes.
18 136 Q. Can you see under "Security" there?
19 A. I do.
20 137 Q. You can take it that there are many other examples
21 of that?
22 A. Yes.
23 138 Q. I am going to give you one other example; number 243
24 (Same Handed), Exhibit 2?
25 A. I have asked a number of -- I mean I am aware of
26 this.
27 139 Q. Yes?
28 A. And I asked a number of bankers what does that mean.
29 140 Q. Yes?
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1 A. And they certainly didn't say that it meant
2 back-to-back funds.
3 141 Q. I understand that. I understand that but this
4 is what we were told by Guinness & Mahon?
5 A. Yes.
6 142 Q. At the moment I am not saying whether I believe
7 them or not?
8 A. But... (INTERJECTION) .
9 143 Q. However, that is what they tell us?
10 A. Who in Guinness & Mahon says that?
11 144 Q. All right?
12 A. I mean...(INTERJECTION).
13 145 Q. All right?
14 A. This is the Irish Permanent.
15 146 Q. Yes, I see?
16 A. Well, I don't know.
17 147 Q. Would you look at the document which you have there.
18 Is it number — 2 4 what?
19 A. 242.
20 148 Q. 242 and 243, Exhibit 2?
21 A. Yes.
22 149 Q. This is a list dated 24th December 1988 of various
23 companies and individuals, which have been blanked
24 out of the copy that you have leaving only the one
25 that is relevant to you in it, which shows that at
26 that time there was backing deposits in respect of
27 the borrowings of the Murray Group. I
28 think...(INTERJECTION)?
29 A.
20
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2 "We hold backing deposits from GMCT"
3
4 but we never heard of GMCT so --
5 150 Q. Yes. We will come back to that. Forget that
6 aspect of the thing for the moment?
7 A. Yes.
8 151 Q. Forget GMCT for the moment?
9 A. Right.
10 152 Q. Have you any comment to make on that; somebody
11 in 1988 said your borrowings were secured by backing
12 deposits? Forget for the moment where they were
13 from?
14 A. Yes.
15 153 Q. Have you any comment to make on that?
16 A. I have, yes.
17 154 Q. What is it?
18 A. I think it is incorrect.
19 155 Q. You think it is incorrect?
20 A. Yes.
21 156 Q. All right, I understand?
22 A. I think they felt they -- if you want to elaborate
23 a little bit: They probably had the comfort of
24 knowing that these deposits were there, which were
25 controlled by Mr. H. F. Murray or indirectly
26 controlled by him but they really weren't under
27 his control legally so...(INTERJECTION).
28 157 Q. You see...(INTERJECTION)?
29 A. So they had the comfort...(INTERJECTION).
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1 158 Q. As you would appreciate?
2 A. But they didn't have the back to
3 back...(INTERJECTION).
4 159 Q. Mr. Carroll, they were either controlled by him
5 or they were not controlled by him and which do
6 you say?
7 A. I said legally they weren't controlled by him.
8 160 Q. Yes. However, from a practical viewpoint could
9 he get his hands on it if he wanted it?
10 A. I suppose, yes, but he had to rely on the goodwill
11 of the Trustees.
12 161 Q. Yes, I understand that?
13 A. Yes.
14 162 Q. I understand that?
15 A. Yes.
16 163 Q. I understand that. Would you show Mr. Carroll
17 number 246 as well (Same Handed)? This is
18 a 1978 document, Exhibit 3?
19 A. Yes.
20 164 Q. And it shows precisely the same thing really but
21 I am just showing it to you as a different document
22 at a different time?
23 A. Yes.
24 165 Q. Yes. Did you know the name, Mr. Carroll, of the
25 company which was the operational company of the
26 Trust?
27 A. Yes.
28 166 Q. It was -- what was its name?
29 A. Well, when I say I knew I was aware of it. I
22
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1 mightn't have been aware of it quite at the time.
2 167 Q. Yes?
3 A. But I know from the bit of research I have done.
4 168 Q. Yes?
5 A. That the funds went out to this -- the Settlor
6 was this guy Woodward and he lent the funds
7
8
interest free to Sumac and Sumac was
the...(INTERJECTION).
9 169 Q. The operating company?
10 A. Was the operating company used by the Trustees
11 for...(INTERJECTION).
12 170 Q. Which I think was the normal practice that was
13 used for these things?
14 A. Yes, for investing the funds, yes.
15 171 Q. All right. In those circumstances would you show
16 Mr. Carroll number 250 (Same Handed)? Do you see
17 that, Exhibit 4?
18 A. Yes .
19 172 Q. Here we come to, if you like, the Cayman Island
20 connection; all right?
21 A. Right.
22 173 Q. You see that this is a statement of Guinness & Mahon
23 in Dublin?
24 A. Yes .
25 174 Q. And I think it deals with the year 1986 but it is
26 just a typical year. There is nothing particularly
27 significant about 1986. You can see that there
28 was an amount of money on deposit, which I think
29 was approximately £1.4 million.
23
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1 MS. MACKEY: Deutchmarks.
2 175 Q. JUDGE O'LEARY: Deutchmarks I should
3 say?
4 A. Yes.
5 176 Q. And you can see that the reference on the
6 second typed line is:
7
8 "RE SUMAC"
9
10 A. Yes.
11 177 Q. Apparently what happened is that Sumac invested
12 the money through the Cayman Islands?
13 A. Yes.
14 178 Q. Do you understand what I mean?
15 A. I do, yes.
16 179 Q. Yes. Have you any comment to make on that?
17 A. Well, yes, I have. Its Guinness & Mahon and it
18 is an internal document. It goes to Guinness Mahon
19 Cayman Trust/College, Re Sumac. So, it is an
20 internal document and I have never seen that,
21 Exhibit 4, so...(INTERJECTION).
22 180 Q. I am not suggesting for a moment you have?
23 A. Yes, I understand what it says.
24 181 Q. You understand what it says?
25 A. Yes.
26 182 Q. All right?
27 A. I mean Mr. Murray wasn't aware of that account
28 being with Guinness & Mahon.
29 183 Q. I do not know what Mr. Murray was aware of really.
24
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1 Do you mean the deceased Mr. Murray; is it?
2 A. Yes .
3 184 Q. Well...(INTERJECTION)?
4 A. Well, I can say with confidence that he never
5 heard of "Ansbacher".
6 185 Q. Yes?
7
8
A. And incidently I never heard of "Ansbacher", which
you might find surprising, but I only heard of it
9 when -- somewhere around the McCracken thing.
10 186 Q. I see?
11 A. And my initial reaction was, "Oh, that is --"
12 the only Ansbacher I ever heard of was -- there
13 was an Ansbacher private bank which was either on
14 Baggot Street or Leeson Street.
15 187 Q. Yes?
16 A. And I thought, "God, this is --" so, I thought,
17 "This bank is Ansbacher. It is the only one I know
18 of," but of course it wasn't but that is absolutely
19 what I -- but that bank was taken over by
20 Woodchester. I -- you know I just subsequently
21 heard.
22 188 Q. Yes. Do you remember then that some time later
23 the borrowings which had been from time to time
24 negotiated with Guinness & Mahon were in the
25 process of being transferred to IIB?
26 A. Yes .
27 189Q.
Do you remember that?
28 A. I do, yes.
29 190 Q. Do you remember the negotiations that took place
25
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1 with regard to that?
2 A. With IIB?
3 191 Q. Yes?
4 A. Yes. Well, I do to a certain extent, yes, yes.
5 192 Q. Yes. Were you involved in those negotiations?
6 A. Yes, yes. I wasn't -- initially it was arranged
7 by a person from KPMG.
8 193 Q. Yes?
9 A. Who advised us that this facility was available.
10 194 Q. I see?
11 A. And that was the reason that we...(INTERJECTION).
12 195 Q. However, did you go and discuss it with somebody
13 in IIB?
14 A. Yes, yes.
15 196 Q. You would have been the financial man at that stage?
16 A. Yes, yes.
17 197 Q. Who did you discuss it with in IIB?
18 A. I think it was Gerry Quigley.
19 198 Q. Gerry Quigley?
20 A. Yes.
21 199 Q. Yes, that name is familiar to me; Gerry Quigley?
22 A. Yes.
23 200 Q. Fair enough. I will come back to that in a second?
24 A. Yes.
25 201 Q. However, in fairness to you and to make sure that
26 you have all the information I would like you to
27 look at number 178 as well (Same Handed), Exhibit 5.
28 What I am going to do while you are looking at that
29 is I am going to go out and get my glasses because I
26
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1 am straining my eyes trying to see these things?
2 A. Right.
3 202 Q. Mr. Carroll, before moving on from Guinness & Mahon
4 I want to bring to your attention that here is a
5 statement of Guinness & Mahon like the other
6 document I gave you, Exhibit 5. It is actually not
7
8
an internal document. It is an external document.
You may not be the recipient of the document but it
9 is an external document. What it is is a statement
10 by Guinness & Mahon of their account which they
11 held, which a customer of their's held, and that
12 customer was Guinness Mahon Guernsey Ltd?
13 A. Yes .
14 203 Q. You see that?
15 A. Yes .
16 204 Q. And you see that various transactions took place
17 which appear to be payments out and there are
18 four in number. One is to H. F. Murray College
19 Trustees Jessica Trust of £91,100. The second to
20 H.T. Murray of £81,990. The next to A. P. Murray as
21 per College Trustees as Trustees of the Bianca Trust
22 of £91,100. The second one was the Delisle Trust;
23 D-e-l-i-s-l-e Trust. Lastly, £50,000 to
24 Ray Carroll per College Trustees as Trustees for
25 the Cordier Trust. Do you remember these
26 transactions ?
27 A. Yes. I suppose the answer is "yes". I mean I
28 don't zone in on them absolutely specifically but
29 I do remember them, yes.
27
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1 205 Q. Yes. Was it money distributed out of the fund or
2 something?
3 A. Yes.
4 206 Q. To each of the four of you?
5 A. That is right.
6 207 Q. All right. The late Mr. Harold Murray got £91,100.
7 Young Mr. Murray got £81,990, even though he is not
8 so young now?
9 A. No.
10 208 Q.
11
12 "A. P. Murray"
13
14 who is A. P. Murray?
15 A. That is Mr. H. F. Murray's wife.
16 209 Q. Wife, yes?
17 A. Yes.
18 210 Q. Mrs. Murray?
19 A. Yes.
20 211 Q. Yes, and yourself. You got £50,000?
21 A. Yes.
22 212 Q. Representing presumably the fact that you had
23 a lesser interest in the fund, if you like,
24 than them?
25 A. Yes.
26 213 Q. Presumably that is what it was but if there
27 was another reason for it let me know?
28 A. I mean that is the reason, yes, as you say but
29 I know the £50,000 that is down there for me --
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1 it arose because I had a loan with the company
2 and £30,000 of that went directly into the company
3 I didn't receive it. I mean I did I suppose as
4 a credit in that...(INTERJECTION).
5 214 Q. I understand?
6 A. And the balance I got directly into my own account
7
8
215 Q. However, as I said to you at the start we are not
really interested in your private affairs?
9 A. Okay.
10 216 Q. It is not really our problem?
11 A. Okay.
12 217 Q. What we are interested in is this you see: If
13 we have established to our satisfaction, if we
14 have established and obviously we have to think
15 about this, that the company Sumac and, if you
16 like, the Trust were clients of "Ansbacher"?
17 A. Yes .
18 218 Q. Even though they did not know it, as you said?
19 A. Yes .
20 219 Q. That the money had been diverted through them?
21 A. Well, I...(INTERJECTION).
22 220 Q. We may then have to go on and consider whether
23 the four beneficiaries were themselves clients of
24 "Ansbacher"?
25 A. Yes .
26 221 Q. Can you see the problem which we are faced with?
27 That is where we are coming from?
28 A. I can understand where you are coming from but
29 I would see it totally different.
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1 222 Q. Of course?
2 A. That is made out to -- I think in contrast to
3 the previous one you showed me it is made out to
4 Guinness Mahon Guernsey Ltd. I think there is some
5 significance in that because if this one appears
6 accurate, and I can't dispute it, it is made out
7
8
to G M Cayman. They must have -- Okay, I mean
it seems to be fairly obvious that Guinness Mahon
9 used these funds in a different manner to what
10 certainly H. F. Murray was aware of but it must
11 have been after that date because...(INTERJECTION).
12 223 Q. I think you can take it as definite that we will
13 note carefully that fact; that you do not appear
14 to have been, and you are not meek in this -- to
15 have had any knowledge that the funds were being
16 funnelled through Cayman; do you understand?
17 A. Yes .
18 224 Q. However, the fact is they were funnelled from Cayman
19 whether we like it or not. Not this £50,000; that
20 is a different matter altogether?
21 A. Yes .
22 225 Q. However, do you see and we will take a note of that,
23 a careful note?
24 A. That was later. I presume is was later on.
25 226 Q. Yes, I understand that?
26 A. And we...(INTERJECTION).
27 227Q.
However, Mr. Carroll, so as I can put the matter
28 fully in context so you understand that matter
29 fully: I am not saying that £50,000 means you are
30
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1 a client of "Ansbacher"?
2 A. Oh, I know that.
3 228 Q. I am saying that the £50,000 means that you are
4 one of the real beneficiaries of the Trust?
5 A. Yes.
6 229 Q. And if you are one of the real beneficiaries of
7 the Trust and if the Trust was a client of
8 "Ansbacher" does that make you a client of
9 "Ansbacher"?
10 A. Yes.
11 230 Q. Not because of this £50,000 but because you were
12 one of the real beneficiaries of the Trust.
13 Can you see the point I am making?
14 A. I am sure there is a logic in that but I have to
15 come back to it: The Trust was never aware or at
16 least the beneficiaries -- well, I suppose
17 then...(INTERJECTION).
18 231 Q. However, the beneficiaries we will call them?
19 A. I suppose the beneficiaries therefore were never
20 aware.
21 232 Q. Yes?
22 A. But presumably the Trustees themselves were aware.
23 233 Q. Yes, I understand?
24 A. Because they were able to use these funds.
25 234 Q. I think I understand that all?
26 A. Yes.
27 235 Q. And really the purpose of this is to understand it?
28 A. Right.
29 236 Q. Could I leave now Guinness Mahon behind and
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1 hopefully it will not be necessary to refer to
2 them again? I am coming to this IIB situation.
3 You see what surprises me, Mr. Carroll, about the
4 situation is that you say that Guinness & Mahon
5 had the comfort of the back-to-back facility?
6 A. Well...(INTERJECTION).
7
8
237 Q. Almost without your knowledge; we will put it
like that. Is that a fair summary of the position?
9 You did not authorise it and you do not believe
10 Mr. Murray senior authorised it?
11 A. That is correct, yes.
12 238 Q. And they are the only two people who could have
13 authorised it really?
14 A. That is right.
15 239 Q. Because you were running the show at that stage?
16 A. Yes .
17 240 Q. And that is the reality?
18 A. I couldn't -- I personally couldn't have authorised
19 it without Mr. Murray.
20 241 Q. I know. However, you could have initiated the
21 process to do it?
22 A. Right.
23 242 Q. Yes?
24 A. Without H. F. Murray's authorisation, yes.
25 243 Q. Yes, precisely. I understand that?
26 A. Authorisation.
27 244Q.
I understand the way it would have worked. If
28 you wanted that to be done you would have had to
29 go and check it with the boss?
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1 A. Yes .
2 245 Q. I understand. It however makes it a little bit
3 hard to accept that when you consider the terms of
4 an internal IIB document which exists at the time
5 of your loan application and that is at page 188
6 to 191, Exhibit 6. I am not sure whether 192 is
7
8
part of it or not. It is not. It is not relevant
to it any way. Give it to the gentleman any way.
9 MS. CUMMINS: Okay.
10 246 Q. JUDGE O'LEARY: Give it to the gentleman;
11 188 to 192 (Same Handed),
12 Exhibit 6. We have got a lot of documentation,
13 Mr. Carroll?
14 A. Yes .
15 247 Q. And this is documentation we got from IIB?
16 A. Yes .
17 248 Q. You are perfectly welcome to read the whole thing
18 but it hardly is necessary. It is their assessment
19 of your situation and I want particularly for you to
20 turn to the second page, which is 189?
21 A. Yes .
22 249 Q. And you see
23
24 "Proposed Security"?
25
26 A. Yes .
27 250Q.
28
29 "The term loan would be secured for
principal only by a bank guarantee
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1 acceptable to IIB. This will beprovided on behalf of a trust
2 controlled by the shareholdersof the company, who have a deposit
3 of a similar amount."
4
5 Do you remember offering that to them?
6 A. Yes. I mean that was the terms of the loan; the
7 arrangement I suppose. We transferred the funds
8 out from Guinness & Mahon and...(INTERJECTION).
9 251 Q. Yes, I understand that and that was to be done
10 and I understand that?
11 A. Yes.
12 252 Q. However, it was more than that. I mean it was
13 more than just a transfer of funds. They are saying
14 that the borrowing would be backed by the funds?
15 A. Yes, and that is right.
16 253 Q. Secured by the funds?
17 A. That is right, yes.
18 254 Q. So, their borrowing was to be back-to-back?
19 A. Yes.
20 255 Q. However, was that in -- however, I thought you
21 told me that the Guinness & Mahon borrowing was
22 not back-to-back?
23 A. No, it wasn't.
24 256 Q. So, you say that was a change?
25 A. Yes.
26 257 Q. I see?
27 A. That was because these people looked for it.
28 As you said earlier they look for everything.
29 258 Q. Everything?
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1 A. So, they actually got a...(INTERJECTION).
2 259 Q. A back-to-back facility?
3 A. Yes, H. F. Murray gave authority to the Trustees
4 to give, to allow, Kredietbank, where the funds
5 went to, to give a guarantee to IIB. So, that
6 was a definite back-to-back, yes.
7 260 Q. Yes. How did Kredietbank come into the situation?
8 You were borrowing from IIB?
9 A. Yes.
10 261 Q. And Kredietbank is a London bank as far as I know?
11 A. They were a Dutch bank I think but any
12 way...(INTERJECTION).
13 262 Q. A Dutch bank. However, I think they had a London
14 branch?
15 A. Oh, they had, yes.
16 263 Q. I think it was a London branch you were dealing
17 with?
18 A. Yes.
19 264 Q. When I say a London bank?
20 A. Yes.
21 265 Q. I mean a bank in London?
22 A. Yes.
23 266 Q. I do not mean a London organisation?
24 A. Right.
25 267 Q. With a headquarters in London?
26 A. Yes.
27 268 Q. In fact I think they may have some connection
28 with IIB now but I do not think they did at the
29 time?
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1 A. Yes.
2 269 Q. They were just kind of friendly with them; is
3 that right?
4 A. Right.
5 270 Q. How did the question of Kredietbank giving the
6 guarantee arise? Why Kredietbank?
7 A. Because the funds were invested with Kredietbank.
8 271 Q. And who suggested that the funds would be invested
9 with Kredietbank so as this guarantee could be
10 given? You did not sit down in wherever your
11 offices were and say, "I know a good bank in
12 London called Kredietbank and I am going to
13 invest it there"?
14 A. No, it was because of the association that IIB
15 had with Kredietbank.
16 272 Q. However, was it IIB suggested it to you? Could
17 anybody else have suggested it?
18 A. Well, that was the way the arrangement was set up,
19 Judge. I can't -- they were very closely linked.
20 273 Q. Yes, I understand that?
21 A. IIB and Kredietbank.
22 274 Q. However, I am pursuing this. This is important.
23 It is nothing, if you like, to do with you at all.
24 This is important for a different reason?
25 A. Yes.
26 275 Q. What I want to find out is: You were moving
27 from Guinness & Mahon, with whom you had a good
28 relationship?
29 A. Yes.
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1 276 Q. And there are some very positive things you said
2 in letters we have to them and all that?
3 A. Yes.
4 277 Q. And you were moving to another bank, IIB, and
5 you were giving them back-to-back facilities of
6 one kind or another?
7 A. Yes.
8 278 Q. And that was the agreement?
9 A. Right, yes.
10 279 Q. And I am not criticising it in any way?
11 A. Yes.
12 280 Q. However, apparently the back-to-back facility was,
13 if you like, to be at arms length. You were not
14 putting the money in Dublin?
15 A. No.
16 281 Q. You were putting the money in another bank in
17 England?
18 A. Yes.
19 282 Q. What I am saying to you is: You had no previous
20 business with Kredietbank?
21 A. No.
22 283 Q. You probably did not even hardly know of their
23 existence?
24 A. No.
25 284 Q. So, somebody said to you, "The place to put the
26 money, so as we can arrange this thing, is a place
27 called Kredietbank in London." Who said that to
28 you?
29 A. I can't be absolutely specific but...(INTERJECTION).
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1 285 Q. Yes. However, what is your best guess?
2 A. It must be IIB.
3 286 Q. IIB, true. You cannot remember who in IIB?
4 A. Well, the person that I dealt with anyway was
5 Gerry Quigley.
6 287 Q. Gerry Quigley, all right?
7 A. But we didn't or H. F. Murray -- when you say he
8 finished with Guinness & Mahon: Yes, we totally
9 stopped our borrowings from them.
10 288 Q. Yes?
11 A. And because -- why did we leave Guinness & Mahon
12 at all and the reason was that there were some
13 rumours about the solvency of Guinness & Mahon
14 and so forth, that they weren't doing well, and
15 H. F. Murray, again on probably a lot of financial
16 advice, decided that he would request the Trustees
17 to move the money elsewhere.
18 289 Q. Yes, I understand?
19 A. If... (INTERJECTION) .
20 290 Q. And I have no difficulty with that at all?
21 A. So, the money was in -- say Sumac was the
22 company that was investing this money.
23 291 Q. Yes. It was always in Sumac, yes?
24 A. So, he would have told the Trustees to take the
25 money wherever it was.
26 292 Q. Yes?
27 A. And...(INTERJECTION).
28 293 Q. Yes, I understand?
29 A. Put it into Kredietbank.
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1 294 Q. He said that?
2 A. And that is what happened.
3 295 Q. However, the fact that it went into Kredietbank
4 was a matter which was suggested, could only have
5 been suggested to you, by IIB?
6 A. That is right, yes.
7 296 Q. Is that a fair summary of the position?
8 A. I think it is, yes.
9 297 Q. All right, fair enough?
10 A. I think it does show also, if you don't mind my
11 saying so, that these funds were now supposed to
12 be out in "Ansbacher".
13 298 Q. Yes?
14 A. But we never had any communication/correspondence.
15 We didn't know there was such a place as "Ansbacher"
16 Cayman without...(INTERJECTION).
17 299 Q. I think you have made that point very forcefully?
18 A. I know but I think this illustrates to some extent
19 that H. F. Murray would simply have dealt with
20 Guinness Mahon Guernsey Ltd, I think they were
21 called then.
22 300 Q. Yes?
23 A. And instructed them or asked them, requested them,
24 to do this. He wasn't going to "Ansbacher" or
25 Guinness & Mahon in Dublin. He never had anything
26 to do with Guinness & Mahon in Dublin other than --
27 he never had -- other than Guinness Mahon in
28 Jersey/Guernsey in dealing with these funds.
29 301 Q. Yes. Are you familiar at all with a man by the
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1 name of Cormac O'Rourke in IIB?
2 A. Yes .
3 302 Q. Yes. In fact if you give Mr. Carroll number 154
4 (Same Handed), Exhibit 7? He in fact sets out the
5 position I think reasonably clearly there.
6 Apparently Mr. Niall 0'Carroll of Stokes Kennedy
7
8
Crowley, KPMG as they were beginning to be known
then, was dealing with your account and in a letter
9 of the 11th November 1988 he sets out what the
10 position is?
11 A. Yes .
12 303 Q. And that seems to confirm the point you made; that
13 the suggestion with regard to Kredietbank in London?
14 A. Yes .
15 304 Q. Came from IIB?
16 A. Yes .
17 305 Q. Is that fair?
18 A. Yes .
19 306 Q. All right, Okay. That is only by way of information
20 to you?
21 A. Yes .
22 307 Q. I really do not want any comment from you. I think
23 in fairness you are entitled to as much information
24 as possible?
25 A. Right.
26 308 Q. Yes. This is a peripheral matter but it is a
27 matter that I may have to refer to in the report
28 and therefore I should put it to you: If you
29 look at page 182 (Same Handed), Exhibit 8?
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1 A. Yes.
2 309 Q. You will see there that that is your letter to
3 the Irish Intercontinental Bank?
4 A. Yes.
5 310 Q. And Item 3 of the letter of Stokes Kennedy Crowley
6 is in fact the nature of the security. Do you have
7 a copy of that there, Exhibit 9. I may not have
8 asked you to get a copy of that?
9 A. Yes.
10 311 Q. Yes. Do you see that; the nature of the security,
11 Exhibit 9?
12 A. Yes.
13 312 Q. It appears that you felt that that should be omitted
14 from the bank's response to Stokes Kennedy Crowley?
15 A. Yes, yes, I am surprised at that letter. I mean it
16 wasn't a big issue any way.
17 313 Q. Yes?
18 A. And what normally happens -- I just am surprised
19 how I could have written that letter, Exhibit 8,
20 because what normally happens is you get these
21 requests which were standard forms from your
22 auditors to sign and they are sending them off
23 to your solicitors, financial institutions and
24 so forth.
25 314 Q. Yes, I know the system?
26 A. And we don't see them after that. They go
27 directly back to the auditors and they deal
28 with them accordingly. So, I am not sure --
29 I can't understand how I would be involved in
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1 that but obviously I was.
2 315 Q. Yes?
3 A. But it wasn't a big issue, Judge,
4 and...(INTERJECTION).
5 316 Q. No, I am not making a big issue but I am just
6 bringing it to your attention?
7 A. And, yes.
8 317 Q. That is grand.
9 A. That is about it.
10 318 Q. Mr. Carroll, just one second if you would not mind;
11 I just want to whisper if you do not mind because
12 there may be one thing that I have to ask you about?
13 A. Right.
14 319 Q. You will recall at page 178, Exhibit 5, Mr. Carroll,
15 which is the payment of the £50,000 to you?
16 A. Yes.
17 320 Q. If you might get that?
18 A. 178, yes.
19 321 Q. Yes, 178. There are a number of names there which
20 are new to us, if you like, and they may be nothing
21 at all to do with our situation or they may be but
22 we have to at least run them past you?
23 A. Yes.
24 322 Q. This Cordier Trust: Do you know anything about
25 that?
2 6 A. No, I don't know anything about that; not about the
27 Cordier Trust, no.
28 323 Q. Did you have a Trust yourself?
29 A. I wasn't aware that I had a Trust any way. I don't
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1 have the details of the tax plan that was set up in
2 Jersey originally.
3 324 Q. Yes?
4 A. I mean I have an idea of it but I haven't got a
5 copy.
6 325 Q. However, is it possible that there was the
7 Woodward Trust and there were, if you like,
8 subsidiary Trusts shooting out of that one of
9 which was called the Cordier Trust?
10 A. Yes.
11 326 Q. The Bianca Trust, the Delisle Trust and the
12 Jessica Trust?
13 A. It is possible but I don't know is the answer
14 to that.
15 327 Q. You do not know the answer to that?
16 A. No.
17 328 Q. Did you ever get a payment from a thing called
18 the Cordier Trust?
19 A. No.
20 329 Q. Other than the £50,000 we are talking about
21 here now?
22 A. No, no, no.
23 330 Q. Yes, or does it have any funds at the moment? Do
24 you know anything about that; whether there is in
25 existence something called the Cordier Trust which
2 6 has funds at the moment?
27 A. No, I wouldn't be aware of it. I mean if those
28 Trusts were there I mean they are obviously --
29 they are as you say sub-trusts or something.
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1 331 Q. Yes?
2 A. If they were.
3 332 Q. Yes?
4 A. They are all...(INTERJECTION).
5 333 Q. Have you any interest in it now any way?
6 A. No.
7 334 Q. None at all?
8 A. Not at all.
9 335 Q. Yes?
10 A. But... (INTERJECTION) .
11 336 Q. It is a bit strange, you know?
12 A. Those Trusts were all -- they were all wound up.
13 337 Q. It is a bit strange to have subsidiary Trusts, if
14 you like?
15 A. Yes, yes, yes.
16 338 Q. Did you ever hear of any of the names?
17 A. No.
18 339 Q. Jessica?
19 A. No, no.
20 340 Q. Delisle, Bianca or Cordier?
21 A. No.
22 341 Q. You never heard of them?
23 A. No.
24 342 Q. However, you did hear of Woodward Trust?
25 A. Yes.
26 343 Q. Yes?
27 A. But the Woodward Trust was wound up in, whenever
28 it was, 1993.
29 344 Q. Yes?
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1 A. 1993.
2 345 Q. Yes?
3 A. So, if those Trusts did exist they were all --
4 they would have been wound up as well presumably.
5 346 Q. Can I take it that the date in which you took your
6 first loan from IIB was at the end of 1988 or the
7 beginning of 1989?
8 A. Yes, yes.
9 347 Q. Yes. Do you know the precise date by any chance?
10 I have a letter of offer?
11 A. Yes.
12 348 Q. Of the 24th April 1989?
13 A. Yes.
14 349 Q. That may not however ...(INTERJECTION)?
15 A. It was around that time. I think it was May 1989.
16 350 Q. Yes?
17 A. I am not absolutely sure.
18 351 Q. All right. Yes?
19 A. I think it took a while to arrange the thing.
20 352 Q. To arrange, yes?
21 A. I think it started in -- towards the end of 1988.
22 We wanted to get the funds -- well, H. F. Murray
23 wanted to get the funds...(INTERJECTION).
24 353 Q. Do you know by any chance when the money was
25 transferred into Kredietbank?
26 A. It would have been the same time.
27 354 Q. Yes. Would it have been in early 1989 or late
28 1989; that could be an important point? It could
29 be important for us to know what part of 1989 that
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1 happened, that occurred?
2 A. It would have been early 1989.
3 355 Q. Early 1989?
4 A. Yes.
5 356 Q. Yes, all right. I am sure IIB will be able to tell
6 us precisely the date of the first loan. They will
7 have that on their records any way. We have a
8 letter of offer?
9 A. Yes.
10 357 Q. However, I do not have the actual draw-down date
11 of the note?
12 A. Yes.
13 358 Q. Do you understand what I mean?
14 A. Yes, yes.
15 359 Q. That is grand. I have no further questions.
16 Ms. Mackey?
17 MS. MACKEY: No, I have none either.
18 Thank you.
19 360 Q. JUDGE 0'LEARY: Mr. Carroll, thank you
20 very much indeed?
21 A. Yes.
22 361 Q. Thank you for your help and assistance and we
23 greatly appreciate it?
24 A. But could I say something? Am I allowed to say
25 anything; no?
26 362 Q. You can say anything you want?
27 A. Yes. I knew -- I got to know obviously the late
28 Mr. Murray, H. F. Murray, very well.
29 363 Q. Yes?
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1 A. And I know his family and so forth very well.
2 364 Q. Yes?
3 A. And he was an exceptional man. He started from
4 nothing. He started a hackney business in the
5 1930's. He went into the funeral business during
6 the war to get petrol and so forth and then really
7 hit the jackpot when he started the car rental but
8 he was a very capable person. He was full of ideas
9 and at the same time a very well balanced man and he
10 was always concerned, you know, and very conscious
11 I think of having -- maintaining proper values and
12 standards and this is the type of man he was.
13
14 So, he was a pioneer in the car rental business
15 and in the Irish tourist business. The car rental
16 business -- he was first in the car rental business.
17 He was the first to set up car rental desks at the
18 airports. He was the first to start leasing and so
19 forth and he set up a standard for car rental that
20 was equal to the best international standards and he
21 did that very quickly and it became an integral part
22 of the Irish tourist business.
23
24 He was always involved in the Irish tourist
25 business. He was attending these international
26 conventions even before Bord Failte.
27
28 He promoted things like golf 30 years ago. He set
29 up prizes, pieces of sculpture by John Behan, every
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1 year for overseas groups or individuals who
2 contributed most to Irish golf.
3
4 He was one of the innovators of weekend shopping
5 into Ireland from the UK and which much later was
6 still going on.
7
8 He carried out promotional tours in the US in
9 difficult years for the Irish Tourist Board at
10 their request, which was done free of charge.
11
12 He made a huge contribution, as I say, to both car
13 rental and the Irish tourist industry. The car
14 rental industry never got any grants. They never
15 got interest free loans. They never received
16 assistance which went to other interests in the
17 tourist industry such as hotels and boats on the
18 Shannon and things like that.
19
20 He built up this very successful business. He
21 employed about 200 people eventually and it is a
22 family business that he had but he -- the fact I
23 think that that business is still going strong
24 after about 70 years I think -- it stands as
25 recognition of what he did in business.
26 365 Q. Yes, that may all be very true, Mr. Carroll?
27 A. Yes.
28 366 Q. However, is it anything to do with our job?
29 A. Well, it has because I will get on to that.
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1 I am just trying to paint the picture of the
2 type of person he was.
3 367 Q. Yes?
4 A. He came along and he got these funds, most
5 unexpectedly, from these windfalls and he -- it
6 was due to his financial advisors that he moved
7
8
this money out of the Country and I just think
that it is terribly sad and I think it is
9 absolutely wrong that this man who died whatever,
10 five or six years ago -- that he is being linked
11 and associated with the "Ansbacher" funds and that
12 has happened through I think a terrible breach of
13 confidentiality because these are leaks that have
14 gone to the media and the leaks must have come
15 from either Gerard Ryan's Department, The Tanaiste's
16 Department or the Taoiseach's Department.
17 368 Q. I think I could not get involved in that now?
18 A. I know you couldn't.
19 369 Q. No, no, I am not getting involved in that?
20 A. I know you are not.
21 370 Q. No, no?
22 A. But that is the way it is and why...(INTERJECTION).
23 371 Q. Well, Mr. Carroll...(INTERJECTION)?
24 A. So, I just want to say that.
25 372 Q. No, no. Mr. Carroll, I am going to stop you
26 there for this reason: During the course of our
27 interviews we do not allow people to speak ill
28 of those that are absent?
29 A. Okay.
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1 A. Yes.
2 382 Q. I would not allow anybody speak badly of an absent
3 person?
4 A. No, no, I am sorry.
5 383 Q. Whoever the absent person is?
6 A. I am sorry about that.
7 384 Q. Yes?
8 A. But... (INTERJECTION) .
9 385 Q. And you can rest assured that I will not allow
10 anyone speak ill of the late Mr. Murray either?
11 A. Yes.
12 386 Q. His reputation will be as jealously guarded inside
13 in this room as anybody's?
14 A. Right, but I notice -- I think leaks are now
15 a culture and may be a political culture and
16 I even heard last evening Mr. McCreevy
17 saying...(INTERJECTION).
18 387 Q. I think we will call this to a finish now?
19 A. Right.
20 388 Q. This is finished?
21 A. But do you know...(INTERJECTION).
22 389 Q. This is finished?
23 A. But do you know what he said?
24 390 Q. It is over?
25 A. Okay. Well, then may be I can talk to you casually
26 and say...(INTERJECTION).
27 391 Q. No, I am not getting involved. I should not have
28 allowed you say anything at all. Good luck?
29 A. Okay.
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1 392 Q. Thank you very much?
2 A. Okay. Thank you.
3 MS. MACKEY: Thank you, Mr. Carroll.
4 A. Thank you.
5
6 THE EXAMINATION WAS THEN CONCLUDED.
7
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
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H D *. 1
3 fry <$M4<,>
Vlvj^V^v
\ % T v j o L ^ 0 \
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Appendix XV (144) (l)(b)
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••e;
AOORESS:
BUSINESS/OCCUPATION:
ESMONDE MOTORS LIMITED.
c/o Murray: Eurapcar Ltd., Baggot Street Bridge.Dublin 4.
Wholly owned subsidiary of Murray Group HoldingsLimited.
CraUt Memorandum pQ'DSubmitted by;
Equity Staka: No
C.B. Approval: Yw/No
fermtaion Obtained N a w applicationsubmit ted.attl
THIS APPLICATION
LoanTYPE:
(OhUMifipraprkmi
AMOUNT.DM 743,726
RATE:Cost • 3%
'Extatlns fttlUdn ovarlmf
- FEE:N"
fm m n m h i i M N I M M I M H
0
PURPOSE/DRAWDOWN:
Working capital - already drawn
g ' Loan originally taken up during 1982
If iww or kwMaidfmdlltiu, U drawdownparmhnd prior tocempMoa of tacurlty?
x m t t t o u n/a
TERM OP FACILITIES: REVIEW DATES:
Extension for one year. 29th July 1988
SOURCE OF REPAYMENT:
Cash Flow.
SECURITY:
Guarantee of Murray Group Holdings Ltd,
If additional or Mixingfacility, li acurity In o/dar?
Security considered adequate.. YES/Mflt
If No. BhM dttafil MMTKSly.
BACKGROUND NOTE/ • Thla aeoount which Is related to Murrays Buropear Limited (Minute No. 1403)4 1UTUNI OP PROPOSAL: facility approved 28th March ISBg has always been conducted In anYjipeccable manner. Interest Is always paid as debited to the account.
. We have not yet received the Audited Accounts for Murray Croup Holdings Limited althoughmanagement have Informed us that a profit of 2272,000 was achieved on a turnover of £llm.for the year ended 31st Decebmer 1987. tn view or the way the account has been conductedand th e adequacy or the security an extension of the facility Is recommended to the 31.12.88 to
. coincide with the review date on the related facility to Murrays Eurqpcar Ltd. Both facilitieswill in future be reviewed at year end.
R ated Faclllties/Borroweri:(Balwc* or Limit, whtehtwr a t rtattr)
Murrays Europcar Ltd1 II M
Total Expoturt:
Stg. LoanGuaranteeFX Risk
£082,000IR£ 90,000
'£ 50,000
IR£1,231,500
CMOIT COMMITTEE
JLLJJL..
/ aeommwufad
BOARD
, ,
ADH^N
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Appendix XV (144) (1) (c)
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^ U.J.P.-to &A . Uraell 24th December, I9fl8
Bruce :
«
As requested I Use bereuxferparticulars of the Accounts or hich we hold hacking
deposits from G M C T :
a) Non Resident Accounts I which are.included In the full M*-ce?fcategory for Central Bene Returns
b)Resident Accounts for which we te.d d ^ t s from GM CT * * hypothec^ . -
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Page 2
c) Resident Account for which wa hold deposit direct from, which Is a Cayman Company : -
<9 College Trustee clients for whan College haw? arranged backingdeposits here through G.M.G.T. t -
Esmonde Motors 743,726.22 DM
With reference to< „ - ' and . __ you will also
have similar loans and security on your owh 'books for significant amounts.
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Appendix XV (144) (l)(d)
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^ ' APPENDIX TEN TO EXAMINATION REPORT AS AT 30 APRIL 1378
MAJOR LOANS BACKED BY "DEPOSITS* HELD IN CAYMAN/GUERNSEY TRUSTC O M P A N I E S
B o r r o w ' Loan Balaoca Outstanding t i Diposit O t t t a n30April 1978 Cayman Gasnuay
I t I
2. Mtoays Emupcir Ltd 593.CC0 - 595,000
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Appendix XV (144) (1) (e)
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G+M•MHOS
IUIIMM e> 'CCSIMI VMMG U I N N E S S + M A H O N L T D ' r r
17 C0««<< aim OuBfe I P O.SoaSSATweweMW*
EUINWSS MAMCM CAYMAN TRUST / C9LLI0CRB SUMAC
oeurcxxAMcs
gXTCRMAL CALL 0/AL E D G E R
5,1"
»
i
SL
I
tu&
i
MMKUUM
WtMOMl|
c.- . .*. • -1 3 J ANS 6
/vYJINS*
f&sg^
NS«eri\
•^SV'Ji'
^MI«.. ..FBC.-ff-'aSsSjXr— < \
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Appendix XV (144) (1) (g)
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HURRAY GROUP HOLDINGS LIMITED AND SUBSIDIARIES
CREDIT APPLICATION
Background:
*
The Murray Group ("Hurrays") W8S started in the 1930'9 by H.F. Murray, now
retired. The principle business was initially the hire car business (with
some chauffeur driven cars}* although they subsequently expanded into car -
sales. The current group structure is outlined in Appendix 1 (includingtrading) although there are only two principal trading companies,
vizi
- Murrays Europcar Limited - Car hire
- Esmonde Motors Limited - Car sales1
Murrays held the Hertz franchise in Ireland for approximately 20 'years until
1972 when Hertz decided to set up their own organisation in Ireland. At
this time they offered to purchase Murrays but the management wished to
continue in business at that time. In 1973 Murrays entered a licensing
agreement with Europcar/Godfrey Davis which is still in effect'. They currently
have a five year agreement with Europcar until 1st Janaury 1994.
. The referral of'business by Europcar is extremely important for Murrays
• accounting for approximately 4058'of total business. In addition, Murrays
.have .a three year contract with Aer Lingus to supply cars for their European
fly/drive programme. This also leads to substantial volumes particularly
in "ofr peak" .seasons when Aer Lingus ar.e actively pronoting vacant seats.
Fleet Movements:
Murrays traditionally start the year with 300/350 cars all less than a year
old. Beginning in February/March this is built up to 800/850 cars by
the end of June. Approximately 300 new cars are purchased while the balance
are leased. Sales of the older cars commence in August/September end are
disposed of by November/December. The year then commences again with a
stock of cars of approximately 300/350 all'of which would be less than a
year old.
IFF I
cgj?
t I '
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Proposal:
Murrays have a core borrowing requirement of approximately IR£1.2m which
they have traditionally borrowed in currency. It i3 proposed to transfer
thi3 from Guinness-4 Mahon who currently provide it.
It is also proposed-to provide a short term revolving credit of up to IR£3m
to be drawndown as indicated in'Appendix 2. This will be used for new
fleet purchases and would be repaid in accordance with the schedule. As .
indicated above this is a short term self-liquidating requirement. It has
- traditionally been provided by Bank of .Ireland Finance.
Existing Banking Facilities?
The following facilities are .available to Murrayst
1. Bank of Ireland - Overdraft Facility - IR£250k
- Revolving Credit - IR£400k
2. Industrial Credit Company - Tourism Loan -? IR£300k
3. Bank of Ireland Finance - Car Loans - Up to IR£Z.5m.
The Bank of Ireland facilities are secured'by en equitable deposit of thetitle deeds to Haddington Road (value IEP 400kj premises and the guarantee
of various group companies.
The Bank of Ireland Finance facilities ere secured by a chattel mortgage
over the cars financed together with a holding company guarantee.
The ICC facilities are secured by 8 floating charge over Thorndene Investments
Limited, a chattel mortgage over the cars financed and a guarantee of Murray
Group Holdings. The cars financed are owned by Thorndene investments.
It is with a view to simplifying the above structure that IIB has an opportunity
to provide the revolving credit facility.
Proposed Security:
.The term loan would be secured for principal only by a bank guarantee acceptable
to IIB. This will be provided on behalf of a trust controlled by the shareholde
of the company, who have a deposit of a similar amount.
" If^7
-
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-3-
Security Tor the short term revolving credit would be the guarantee of all
group companies supported by fixed and floating charges on all assets of
^ the group. While fche past the company ha3 provided chattel mortgages on
the.cars financed,"given the short term requirements, the size of the fleet
and the frequent sales and purchases this has proved administratively cumbersome
and very expensive. Murrays, therefore, are currently seeking a bank
who will provide the facility without the chattel mortgage requirement.-
Trading:
' Appendix 3 contains the consolidated profit and loss account for the group
for the last two years. Pre-tax profit in the year to December 1987 amounted
to IR£414k (1986: IR£172k) more than double that of the previous year.
1986 returns were depressed by the small number of Americans in Europe due
to the Libyan crisis and the fact that Murrays did not have the contract
with Aer Lingus that year. Interest cover in 1987 was 2.4 (1986s 1.66)
a satisfactory level for what is essentially a short term leasing company.
Management accounts for the year to 30th November 1988 Indicate a pre-taxprofit of IR£40Bk (Budget: IR£320k) and the projected out-turn for the year
is similar to 1987. 1988 has seen margins eroded but the Aer Lingus contract
has increased.volumes significantly. An improved car market has seen Esmonde
Motors performing well for the first time in many years.
Financial' Position:
The financial position as at 31st December 1987 (Appendix 4) shows a total
net worth of IR£2.1m (1986»- IR£1.7ta) representing -3958 of total assets.
The lqng term liabilities represent 71% of net worth but when deferred taxationis excluded long term debt amounts to only 50% of shareholders' funds.
Overall, the level of gearing is very low at year end in this company -
reflecting the cyclical nature of its fleet.
At mid-year, both the inventory of cars and short term debt can be expected
to increase by up to IR£3m. Nevertheless, this represents stock cover
of 2 times. The stock would be readily saleable over a number of months
and would be more than capable of repaying short term debt. Other current
assets (IEP800k) and fixed assets of IEP 1.2m provide significant additionalsecurity cover.
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Nr >
-4-
Asgassroent:
This is a company with a long tradition in the motor industry in Ireland
which has weathered the recession of the BO's very well. It has been well
introduced to the bank via Stokes Kennedy Crowley, who are their auditors.
Alex Spain has recently joined the Board of Murray Holdings, having been
associated with the company fox; many, yeers.
The proposal Tor the IR£1.2m bank guaranteed facility represents an attractive. return of 3/45 on what is.very limited risk. The risk on interest is limited
as the structure can be collapsed at any time (KB London will earn Vfljf
on the guarantee which is cash collate.ralised).
The proposal to finance short tern car assets is well secured by stocks
arid fixed essets and is inherently of a self-liquidating nature. IIB will
have the right to inspect the very comprehensive fleet summaries which Murrays
produce on a monthly basis. It will be possible to verify the location
of any car in' the fleet and to inspect its tax book as these are all held
centrally in head office.
The prlncipel risks associated with the short term funding proposal are
changes in excise duties end frauds Given the likelihood that any excise
duty changes will be signalled iri the Budget (in January - when stocks are
at a minimum) and. the short term nature of the funding it is likely that
the company will be able to take steps to ameliorate the effects of the
changes. ' In addition, the importance of the car hire Industry to tourism.
• nay conceivably lead to special treatment as in the psst. The size of the fleet
makes the possibility of large scdle fraud unlikely. Any disposal of the fleet
in excess of planned level would have the effect of reducing prices significantly
in the market piece.
Overall, Murrays appears to be a tight well managed operation. They produce
excellent fleet and financial management in a timely fashion within two
weeks of month end. Having weathered the recession of the early 80's they
are well poised to take advantage of the present upturn in the economy and
the increased emphasis being put on tourism.
The strong asset cover and the readily realisable nature of stock provide
a strong basis for providing the facilities outlined.
j m
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r *
: r >< la
^ BOTTowers Murrays Europcar *PP. No. 2803 Date: 3.2.
(26) Purpose and Justification
Purpose: 1. Jo approve a new IR£1.2m equiv.- term loan facility;
2. To approve a new IR£3.0m equiv. revolving credit facility.
| Justification: 1. The term facility represents a good return on a bank guaranteed
: facility1
j 2. The revolving credit is Justified by:
i (a) the strong asset cover (2.5:1)
(b> the annually self liquidating nature of the transaction.
89
(27) Guarantee* and Collateral
a). Existing —
b) In process
c)
d)
Proposed (New or additional) Vlli -
Special Conditiona/bovenanta
C28) Tenna and ccnditicna
1. LIBOR + 3/48
2. DIBOR + RAC + 2*
U t 2.
Bank Guarantee acceptable to 118
(probably KB London)
Guarantee of-etj grpup companies
suppori^e^y first fixed end floating
charge on all assets of the borrower
shared pari passu with ICC in an amount
of IR£300Mto be negotiated)
1 -!VlVT UtAra-hs,
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ifirpptJuxLju^ )
\ Z.
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Appendix XV (144) (l)(h)
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• o
E "
91 MERRION SQUARE DUBLIN 2TELEPHONE 764611-19 {9 LINES) 760291-4 (4 LINES) TELEX 33322
•: i/«"N J
IRISH INTERCONTINEOTAL BANKLIMITED
M K Niall O'CarrolI,KPMG Stokes Kennedy Crowley,1 Stokes Place,
St. Stephen's Green,Dublin 2. November 11, 1988
Dear Niall,
' Res Murray Group
I refer to our recent discussions on the possibility of putting a facility Inplace for the Murray Group. I feel that the most appr6prlate route wouldbe to provide a facility from IIB to the group supported by a charge over•the deposit of a similaramount with Kredietbank London. We are currently' Investigating the methods by which this could be done.
In the «vent that a direct route can be found to take the security I wouldanticipate a pricing of 1% over the cost of funds to IIB or in the event thatan indirect route was necessary a pricing of 1 1/896 above the cost of fundsto IIB. This pricing Is subject, of course, to confirmation by our CreditCommittee.
I look forward to progressing this matter with you and assure you of our bestattention at all times.
Yours sincerely,
Manager - Banking
Ktjbtcrtd Number 40137 Republic of Ireland
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Appendix XV (144) (1) (i)
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E *
Murraya Europcar Limitedfiaggot Street Bridge,Dublin 4, Ireland.Telephone 668 1777Telex 937B4Fax 660 2958
Our ref:
1993.
Doherty,Manager - BankincIrisjft Intercontinental Bank.91 Joierrion Squjtre,iDublin 2.
Dear Hugo,
1 enclose copies of the Audited Accounts to December 31st 1992as follows
Consolidated Accounts - Murray Group Holdings LimitedHurrays Europcar LimitedEamonde Motors Limited -
I wonder would it be possible to omit Item 3 . in the letter toStokes Kennedy Crowley confirming the amount of .the loans at tnaend of the year.
Yours sincerely,
R. Carroll.
MKHF*®'
(FRO' U**''
tM'
Enc.../
• I M Mtm»lftU1_H^Mu»>v (Chtlrman), R. C»rroll F.C.*.,_H.T. Murray. M.fl. Gilisnan, J. Smith.
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hu tarm nas oeen approveu uy.uie nmuuic UI uiioiioieu
Irish Banks' Standing mmittee and the Northern Ireland Bankers' * -wciation.
The Manager, . O u r refs Kl OC [cM,l & A (Bank)
JUtecrSaJA (Branch)
Dear Sir,
(Name of customer)
I/We have read this document and IAm authorise you to provide th e information requestedherein in respect of th e accounts of the above-named customer and also to disclose .thenumber of Joint accounts, if any, to which the above-named customer is party.
Please send th is information to our auditor^',.
( Sb3«a> . St. StepUs&ka fadte^ZYours faithfully,
IK.••HM*fM«MMH»1lMMMM«M •« M IMOMMMMt
Authorised Signature^)»onw»Hi»»*N«*w>iMwwmn>>nM<nw»i>mmi>t iWw»»rt»
Dear Sir, < •We report that at the close of business on* JI.Ipi4.3Z-. .branch showed:—
1. BANK ACCOUNTS
. the records of this
Ooscripttan of a/cs(Including deposit a/csl s/sxNot* A
Date of last
Inter outliningtemu/conditions of
borrowing
Balance OrJCr.
Amounts accrued but notposted at abova data (Note B)
Ooscripttan of a/cs(Including deposit a/csl s/sxNot* A
Date of last
Inter outliningtemu/conditions of
borrowing
Balance OrJCr. EstimatedInterestOrJCr.
Est CurrentAccount Pan& other charge*
&kj»GI /oo-t
oajtttnio/'s*7oo it £
issfst£
Note A
Note B
Where e specific letter of set-off for principal exists affecting any of the aboveaccounts, please Indicate this by adding S to the account title, if the set-off refersto accounts other than those being reported on use SX. (Other set-offs may ariseeither et taw or on foot of a bank security document).The provision of this information may entail work and costs. If the information Isno t essential this request should be deleted.
2 . FU LL T IT LE S AND DATES OF CLOSURE OP AL L ACCOUNTS CLOSED DURINGPERIOD:
•N .B . Date to be inserted before form is sont to bank. G28 (11/82)
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Nature of securit\ ild direc tly from custom er (e.g. Deeds, Stoc Shares etc.).Amount only of any guarantees held for the benefit of the customer.
«M*M MtH MMOWM M •• »•••••••• ••
^M«MM*»*MMSM»S»aM»»*MMMlMIM«|M««<
M«INMMMI«««t* IMIMMM«l«IH»UMM«**4««*«Ma| aMtat l
4 . CONTINGENT LIABILITIES:
All known contingent liabilities
(a) Total of Bills discounted for your customer, with recourse
Date(s) Amount £
(b) Amounts and dates of each Guarantee, (excluding Accept-ances) Bond or Indemnity given to you by the customer.
(c) Amounts and dates of each Guarantee, (excluding Accept*ances) Bond or Indemnity given by you on behalf of yourcustomer.
(d) Total of Bills drawn on and accepted by Bank on behalf ofcustomers (excluding (f) hereunder).
(e) Total Forward Foreign Exchange Contracts.
(f) Total of Outstanding Liabilities under DocumentaryCredits.
(g) Others - Please give details:
The information available at branch contained herein isglven In confidence Tor your use-only, in your capacity as Auditors) and without responsibility on the part of die Bank orany of its officials*
Note: No information can or will bs given which would disclose confidential informationregarding other customers.
Si(}n8ClM»MI*IM*»liH tMMM*! ! *1HM *«M*lSI*n*nt*Wn*l*M*MtM««M«(*H«SH«*MManager
.Date
Form SBR1 (1982)C 28 ( I V / 8 2 )
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Appendix XV (144) (1) (k)
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•N •R *
91 MBRRION SQUARE DUBLIN 2TELEPHONE 764611-19 (9 LINES) 760291-4 (4 LINES) TELEX 33322
IRISH INTERCONTINENTAL BANKL I M I T E D
Mr. Niall O'Carroll,KPMG Stokes Kennedy Crowley,1 Stokes Place,
St. Stephen's Green,Dublin 2. November 11, 1988
Dear Niall,1 Ret Murray Group
I refer to our recent discussions on the possibility of putting a facility Inplace for th e Murray Group. I feel tha t the most appropriate rou te wouldbe to provide a facility from IIB to the group supported by a charge overthe deposit of a similar amount with Kredietbank London. We are curren tlyinvestigating the methods by which this could be done.
In the ev ent that a direct route can be found to take the security I wouldanticipa te a pricing of 1% over th e cost of funds to IIB or in the event thatan ind irect route w as necessary a pricing of 1 1/8% above the co st of fundsto OB. This priding is subject,-of course , to confirmation by our CreditCommittee.
I look forward to progressing this ma tter with you and assure you of our bestattention at all times.
Yours sincerely,
Manager - Banking
Rtgiiured Number 44S3T Republic of I relied
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Appendix XV (144) (1) (1)
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1/'frCT-
1
O C T -
1
. 0 6
wo. of NNES5 MAHON CAYMAN TRUST LIMITEDA M« "6*r «f BulnnM* Mahon M*«ha«< B« l*in f Ortup
F.a Bw Mr
\ OHM Cayman
\ A d d w e OMIWWW
vi r Ml
JAF/mb
VI* TKLF.FAX
D. Padrnig iollcry, aq.Colnncao & Mahon Ltd.17 Collate GreenDublin 2IRELAND
October 12, 1967
D«*r Psdraigi
F u r t h e r to yours of 7th October, I confirm you may fa* letter andschedules aa indicated to our auditors. Whilst not every balanceagrees, wc are able bo reconcile the figures with our records.
Regards,Tours 8lncerely(
. FURZE
• O A T
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Appendix XV (145) Mr Liam Cassidy
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MrLiam Cassidy.
a) Guinness and Mahon Credit Comm ittee Minute of 21 January 1977.
b) Extract from Central Bank examination report of G uinness and Mahon asat 30 April 1978.
c) Guinness Mahon Cayman Trust/College Call a/c statement of 18 October1985.
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PRESENT:
Minutes of the 73rd Meeting of the Banking/Credit
Committee held at 17 College Green, Dublin 2,
on Friday, 21st January, 1977.
J. D. T. - M. E. O'K. - R. D. C. - GMcC. - P. J. F. - BMcL - I. W. K. - P. O'D.
M. C. K.
339:
MONEY MARKET:
Period rotes rapidly decreasing ahead of an expected 4% fall in M. L. R.
FOREIGN EXCHANGE:
The £ stands at 1.7150 against the U .S .$ .
Cassidy Silks Limited:
Amount:Puiposes^
Term:
Rate:
Drawdown:
Security:
Review:
£200,000Acquisition of Inter group properties*.
One .year annual rev iew.
15% fixed
r
By way of loan on 24th January, 1977
Solicitors, Kennedy & McGonagle, undertaking to hold Deeds
of following properties to our order. Suitably secured .
9 Lower O'Connell Street, Dublin 1.
73 Lower Georges Street, Dun Laoghalre
78 Patrick S treet, Cork
31st January, 1978.
Recommended
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Appendix XV (145) (1) (b)
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CUINNESS t m m LIMITED
••i
APPENDIX 10
HMOB LOWS BACKED BY "DEPOSITS' HELP IM CAVMAH/GUEMISCV TRUST «« »am ,* *
BorrowtrLow Tjaltncc OutitimMng
at 30 APHI 1978 • Deposit-
ees!!!
Offshore
Guernsey
ii
1CI1219. Cassf* Silks- 10S,44> 108.447
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Appendix XV (146) College Trustees Limited
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating toCollege Trustees Limited.
a) Extract from ninth memorandum of evidence of Ms Sandra Kells -Channel Islands Operation.
b) Extract of transcript of evidence of Mr Martin Keane dated 16 February2000.
c) Statements of account entitled GM CT re Co llege Trustees.
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Appendix XV (146) (1) (a)
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EXTRACT FROM 9 t h MEMORANDUM OF EVIDENCE OF SANDRA KELLSEXTRACT * k ^ ? i t l e d c h a n n e l ISLANDS OPERATION
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chan gs b ±-3 sterling r e a in June 1972, Dublin recognised that very little new.business w ould Sow from Ireland. In Juiy 1973 it decided to open fully in Caymanand seek a new "A " licence. John Collins and John Furze joined C aym an from the3ank of Nova Scocia in No vem ber 1973. Cayman became authorised dealers, with afull 41 A" bank and crust company licence on 1st January 1974. A Category " A"
licence allows a bank to carry on b usiness with residents and no n-residents of theCayman Islands. A C ategory "B " licence for the mam part restricts a holder totransactions with non-residents of the Cayman Islands.
Cayman placed monies on deposit with Dublin. These were placed in Sundry SubAccounts, which were general accounts through which monies moved, and otheraccounts in the name of Caym an, but which were designated by codes, num bers orinitials and /or in the nam e of different entities.
Examples of such on accoun ts are as follows :
(a) Guinness Mahon Caym an Trust A/E - this deposit account had a $134,533.15credit as at 16th June 1976. The Irish customer of Cayman, who placed monieson deposit with Cayman, also had companies in the Channel Islands, namedBella Investm ents Limited and Redshank Investments Lim ited. The A/Eaccount was used, subsequ ently, as security for a loan to an Irish incorpo ratedcompany, w hich was owned by th e Irish resident.
(b) A/A2 6 - this accoun t was in Australian dollars and large sums of money movedthrough this account from the mid-1980 's onwards and,
(c) a deposit open ed in 1975 by Caym an was designated as a "G " deposit. Thisdeposit was u sed as security for a back-to-back loan to a company, Gom bretteLimited, which was incorporated in the Channel Islands.
CHANNEL ISLANDS OPERATION
With the shrinking of the sterling area in June 1972, Cayman became unavailable foruse by residents of the scheduled territories. To meet this position, Guinness M ahon
"Jersey Trust Lim ited Was formed ih No v ember 197 J to"provide ^a lternativ e^of fsho re
trust service. It was a wh olly-ow ned sub sidiary of Dublin. Two of its directors wereJo hn Co Uins and Joh n Furze.
In the summer of 1973 it was decided that the Guinness M ahon Group should have abank in Guernsey. Gu inness Maho n Chan nel Islands was incorporated in February1974 as a wholly-owned subsidiary of Dublin and, subsequently, obtained a bankinglicence. Due, howev er, to the down turn in the economic situation, it was decided tolet the licence lapse.
As a result of the decision to introduce a wide range of capital taxes in Ireland, theneed for a separate trust com pany in Guernsey was recognised and C ollege Trustees
Limited was formed as a wholly-owned subsidiary of Guinness M ahon ChannelIslands early in 1975. John Collins was a director. With the chan ge in the economic
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situation, i t ' w a s considered to be appropriate for the Group to have a bank inGuernsey. In February 1977 Guinness Mahon Guernsey Limited was incorporated as
a wholly-owned subsidiary of Guinness M ahon & Co., Ltd. (hereinafter called"London") and a banking licence was obtained.
In summ ary, D ublin had two who lly-owned subsidiaries in die Channel Islands -
Guinness Mahon Jersey Trust in Jersey and Guinness Mahon Channel Islands inGuernsey, with College Trustees Limited in Guernsey being a wholly-ownedsubsidiary of Guinness Maho n Channel Islands. Guinness Mahon Channel Islandswas, since the late 1970's or early I980 's, anon-trading company.
Cayman was a subsidiary of D ublin, as were Guinness M ahon Jersey Trust Limitedand College Trustees Lim ited. Irish residents, if they were placing money offshore,may have placed it with College Trustees in Guernsey or with Cayman. The d ay -t o -K ^.day running of College Trustees was provided by Sovereign Tr uste efL united. T he 'directors of College Trustees Limited included Mr. John Lipscombe and a Mr. BrianEUis. They were also directors of Sovereign T^rste^s Limited.
College Trustees was sold to Credit Suisse in the late I98 0's. Mon ies could passbetween College Trustee s Limited and Caym an. Caym an had accounts with Gu innessMahon & Co., London. College Trustees could have placed monies in Caym anaccounts via Guinness Mahon Guernsey, which had a banking licence and hadaccounts with Guinness Mahon & Co., Ltd., London.
ANSBACHER C A Y M A N
Cayman had on deposit w ith Dublin on the following dates
£ S t g .
30.11.1978 4,834,26931.12.1978 4,493,39731."171979 4,319,118 ~~
. 29.2.197 9 4,498,47130.6.1979 4,812,43831.8.79 6,498,10130.9.1979 6,880,60031.10.1979 6,896,90831.12.1979 7,424,61230.4.1981 9,396,53730.4.1982 26,980,21731.10.1984 25,154,068
Dublin is not a ware w hy the re was a significant increase in deposits with D ublinbetween 1981 and 1982, save that a substantial numbe r of deposits were opened at
that time by Caym an regarding College Trustees Limited. These accounts were in
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Appendix XV (146) ( l) (b )
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PRIVATE EXAMINATION OF MR. MARTIN KEANE
UNDER OATH
ON WEDNESDAY, 16TH FEBRUARY 2000
I hereby certify the
following to be a true and
accurate transcript of my
shorthand notes in the
above named interview.
Stenographer
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PRESENT
The Inspectors:
Solicitor to the Inspectors
Interviewee:
Instructed by:
MR. JUSTICE COSTELLO
MR. ROWAN FCA
MS. MACKEY BL
MS. M. CUMMINS
MR. MARTIN KEANE
MR. BOYCE SHUBOTHAM
William Fry Solicitors
Fitzwilton House
Wilton Place
Dublin 2.
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1 THE INTERVIEW COMMENCED AS FOLLOWS ON WEDNESDAY 16TH
2 FEBRUARY 2000
3
4 MR. JUSTICE COSTELLO: Good morning, Mr. Keane,
5 my name is Decl#n Costello
6 and on my right is Ms. Mackey and on my left is
7 Mr. Rowan, as you know we have been appointed
8 inspectors by the High Court. I will ask now our
9 solicitor, Ms. Cummins, to administer the oath to
10 you.
11
12 MR. KEANE, HAVING BEEN SWORN, WAS EXAMINED AS
13 FOLLOWS BY MR. JUSTICE COSTELLO
1 4
15 1 Q. MR. JUSTICE COSTELLO: Mr. Keane, I am sure your
16 solicitor has explained to
17 you that we are not a court.and we are not a
18 tribunal, we are inspectors appointed by the High
19 Court. We have adopted the practice, which I am
20 sure is a proper practice, that we do not object, in
21 the slightest, to witnesses bringing solicitors or
22 legal advisers with them. If there is a point at
23 which you think a question is one which you should
24 1 not be required to answer, for one reason, for
25 example that it is not relevant or it is not within
2 6 the terms of the Court, you can so indicate to me
27 and you can discuss the matter with your solicitor.
28 If your solicitor thinks that we are asking a
29 question which you are not required to answer, he
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prtil 1 until 1988 when I left Guinness & Mahon. Since 1988
2 I have been employed by Ernst & Young, chartered
3 accountants, and my current position there is
4 director of corporate finance services. My careeri
5 has been in corporate finance, essentially.
6 5 Q. We are concerned now, particularly with the company
7 that is now known as Ansbacher, and we are concerned
8 with obtaining from you assistance as to the
9 services which Ansbacher operated here in Dublin and
10 I particularly want your assistance in relation to
11 the establishment of trusts in Cayman, in respect of
12 which the Ansbacher may have been the trustee or
13 management company and how the whole system was
14 established and how it worked and if you could give
15 us, in considerable detail, your knowledge of it?
16 A. I think it might be helpful to you if I just
17 outlined where roughly, over time, my role was in
18 relation to the whole Ansbacher affair and the
19 various off-shore companies that were subsidiaries
20 of the bank. As I say, I joined the bank in 1972 as
yp^ 21 a junior corporate finance executive. I had no
22 dealings with any of the off-shore operations of the
23 bank until, I believe, about 1974. At that stage
24 ' there was, in existence, Guinness & Mahon Cayman
25 Trust, which is now known as Ansbacher (Cayman)
26 Ltd., I understand. There was also in Jersey a
27 company which had been established in 1972 by the
28 name of the Guinness & Mahon Jersey Trust Ltd.,
29 which was a trustee company, which I came into
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19 6 Q.
20
21 A.
22 7 Q-
23 A.
24 8 Q:
25 A.
26
27
28
29
contact in 1974. I think in 1974 there also had
been established in Guernsey a company by the name
of Guinness & Mahon Channel Islands Ltd. The
background to all of that was, as I understand it,
that in 1972 there was changes in the definition of
the scheduled territories, which made up the
sterling area and my understanding is Cayman went
outside the sterling area. Cayman had been the
place where Mr. Traynor had established a subsidiary
on behalf of the bank, known now as Ansbacher
Cayman. It was now not possible for this to be
used, except by virtue of exchange control
regulations and he set up, I was not involved in the
setup of it, a company in Jersey, which was just a
pure trust company, by the name of Guinness & Mahon
Jersey Trust Ltd. He was assisted in that by
someone in the bank at that time, who was also a
director of the bank, by the name of Chris Dodd.
If I could interrupt you, what do you mean by "just
a trust company"?
It wasn't a bank, it was just a trustee company.
The first time I came into contact with any of these
entries really was in 1974. Mr. Dodd had left the
bank and I believe, I think, in that year
Mr. Traynor had suffered a heart attack. Guinness &
Mahon Jersey Trust had, at that point, a
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1 considerable number of trusts which had been
2 established in the Channel Islands and there were a
3 significant number of companies there as well. At
4 that time Guinness & Mahon Jersey Trust didn't have
5 a secretariat, as such, in the Channel Islands. The
6 registered office of the company was at the house of
7 the son of a former client-of Mr. Traynor's and I
8 think they used local firms of accountants in Jersey
9 to supply formation services and secretarial type
10 services. So, I, at that stage, was asked by
_ 11 Mr. Traynor to go over, in essentially an
12 administrative role, to look after those companies
13 to make sure the returns were properly filed and to
14 make sure they paid their local taxes. At that
15 stage there were, I can't remember how many now, but
16 a significant number of trusts had been
17 established...(INTERJECTION).
18 9 Q. Approximately how many?
19 A. I would say maybe 25 to 30. At that stage, also,
20 the bank had, in Dublin, a large number of what I
_ 21 would call old trusts of the kind of marriage
22 settlement or will trust nature, some of them which
23 were Irish others which had moved their residence
24 • from the UK to Ireland in the '60's when capital
25 gains tax came into the UK in the '60s. Guinness &
26 Mahon Executor and Trustee Company, Ireland would
27 have been the trustee to a lot of these settlements.
28 In 1974 capital gains tax was introduced to Ireland
29 in 1974 and a lot of these trusts wished to move
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1 residence yet again to the Channel Islands, or some
2 suitable jurisdiction for the purposes of avoiding
3 capital gains tax, is my understanding. So that
4 event, Mr. Traynor and Mr. Dodd, I believe, at that
5t
time, were in the process of applying fdi a full
6 banking licence for a company which had been
7 incorporated in Guernsey by the name of Guinness &
8 Mahon Channel Islands Ltd. After Mr. Dodd's
9 departure I was involved in some meetings with
10 directors of the parent bank in London and I think
11 at least one meeting with the financial
12 establishment or regulator in Guernsey. In due
13 course — the intention was that this would be set
14 up as a full bank in Guernsey which would also carry
15 out trustee services. A banking licence was duly
16 obtained, I believe, in 1974, however subsequent to
17 that there was, I think, a downturn in business, the
18 whole project was reviewed. On the grounds of costs
19 it suddenly looked like being far more expensive to
20 set up in Guernsey than people had originally
21 envisaged and it was decided not to proceed with it.
22 The licence was, I believe, relinquished and handed
23 back to the Guernsey Authorities.
24 10 Q-. Do you know when was that?
25 A. I think approximately, end of 1974.
26 11 Q. 1974, as soon as that?
27 A. Yes, it could have been early 1975. So the
28 situation at that point was that there was this
29 demand from the old trusts back in Dublin who were
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1 services. I believe subsequent to that a lot of the
2 old trusts that were in Dublin, and the trusts that
3 had been established in Jersey were all transferred
4 from Guinness & Mahon Jersey Trust and from Guinness*
5 & Mahon Executor & Trustee in Dublin to College
6 Trustees as trustee.
7 12 Q. Just so I understand, I think you made it clear,
8 when you say "transferred" you mean that the trustee
9 was changed to College Trustees?
10 A. I think the trustee was changed, may be not in all
11 cases, but in most cases, certainly in the ones
12 where Dublin was a trustee.
13 13 Q. The intention being that the company that would act
14 as trustee would be College Trustee?
15 A. Yes, and would act as the company manager.
16 14 Q. And would also act to manage the trust as well?
17 A. Manage the companies underlying the trust.
18 15 Q. We will come to that later. Just again, I am sure
19 you cannot be definite but just how many companies,
20 old trusts, that were moved from Dublin?
""" 21 A. It is not a large number but they were fairly
22 substantial trusts.
23 16 Q. The numbers weren't large?
24 A-. The numbers wouldn't be large, six to ten, they
25 would be very substantial and very heavy from an
26 administrative point of view, they would probably
27 have had investment portfolios and the like.
28 17 Q. Yes. Continue then.
2 9 A. My role in that period was on the instruction of
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1 Mr. Traynor to try and — my role was involved in
2 the organising of all that and the organising of the
3 transfer and looking at the overall — making sure
4 that the overall administration was up to date and
i
5 the returns were filed on time. k
6 18 Q. You, in fact, were a director of College Trustees,
7 originally?
8 A. At the date of incorporation, purely at
9 incorporation, I checked that and I was not, purely
10 for the purpose of incorporation.
^ms, 11 19 Q. That explains it. Continue then Mr. Keane.
12 A. That is the point at which all the Channel Islands
13 activities came together under College Trustees
14 which I think was a subsidiary of Guinness & Mahon
15 Channel Islands. So we now had the situation where
16 Guinness & Mahon Dublin owned one hundred percent of
17 Guinness & Mahon Channel Islands, which in turn
18 owned one hundred percent of College Trustees, which
19 had a management arrangement with Sovereign. At
20 that time, most of the client companies that had
21 been set up in Jersey had deposits back in Dublin in
22 the name of the normal — when I came across it, the
23 normal structure appeared to have been that there
24 ' was a trust with an underlying company. Most of the
25 trusts that had been set up in Jersey had
26 Christopher Woodward as the settlor, who was the
27 gentleman whose house was used as the registered
28 office, the son of the former client of Mr. Traynor,
29 who was a director of Guinness & Mahon Jersey Trust.
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1 So those companies had deposits back with Guinness
2 Mahon in Dublin.
3 20 Q. If you just take it a little slowly. You say the
4 trust had underlying companies.
5 A. Yes. '
6 21 Q. Was it the trust just owned one hundred shares or
7
8 A.
something like that of the company?
Yes.
9 22 Q. All the funds were in the company?
10 A. In the company.
11 23 Q. And the company then managed the funds?
12 A. Yes, the company placed them back on deposit with
13 Dublin.
14 24 Q. That is what I want to get at. Were all the funds
15 placed back in Dublin?
16 A. My recollection is yes.
17 25Q.
In whose name were the funds placed?
18 A. The funds, at that point, my recollection is that
19 the funds were in the name of the individual
20 underlying company.
21 26 Q. The underlying company?
22 A. The underlying company.
23 27 Q. We will come to these later. These were the coded
24 • accounts, were they?
25 A. No, at this point they were just X, Y, Z
26 investments, whatever, the actual names of the
27 company.
28 28 Q. Of the company?
29 A. Of the company, yes.
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1 29 Q. Very well Mr. Woodward was the settlor in all these
2 trusts, was he?
3 A. That is my memory of the ones I came across.
4 30 Q. Did you see who the clients were who instructed
5 Mr. Woodward to be the settlor? '
6 A. Not initially, I became aware of some of them as
7 time went on.
8 31 Q. Yes. Were these discretionary trusts?
9 A. My memory is yes.
10 32 Q. You became aware of who the beneficiary was and who
11 was able to give instructions as to how the funds
12 were dealt with?
13 A. I can't exactly say how I became aware from various
14 bits of information.
15 33 Q. If you continue then, Mr. Keane.
16 A. So, I think at point — some point after that — I
17 think during that period, which is roughly from
18 about 1974 to I think about 1976, 1975/76 is the
19 period when all this was going on about Guinness &
20 Mahon Channel Islands, the setting up of College. I
21 think some more companies may have been incorporated
22 in Jersey and they may have been added to the trust.
23 I think there was a certain amount of shelf
24 • companies that had been formed by Mr. Traynor, so
25 there may have been some companies added to the
26 Jersey stable, if you like.
27 34 Q. What function would they have?
28 A. What function?
29 35 Q. Yes.
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1 A.
2
3
4
5
6 36 Q .
7
Qo
9 A.
10 37 Q .
1 1 A.
12
13
14
15
16
17
18
19
20
2 1
22 38 Q .
23
24 A".
25 39 Q .
2 6 A.
27 40 Q .
28 A.
2 9
there were a large number of trusts there which were
shelf type trusts where they were set up by
Mr. Woodward and there may have been companies which
were subsequently formed to go with them!
When you say "shelf", you mean that they were there
available for anybody who wanted them, they were not
operative?
Weren't operative, yes.
That was between 1974 and 1976?
I think that is my memory, yes. Some more may have
been allocated to clients by Mr. Traynor at that
time. I think some time around 197 6 Mr. Traynor
decided that he was the going to change the system
in Dublin in relation to the deposits in the
individual companies which were appearing as
individual deposits. He instituted a system,
whereby from some date around then that they were
now coded, still individual deposits on the books of
the bank but now known as Guinness & Mahon Channel
Islands A, B, C, D, or whatever, some number.
The name in the company was Guinness & Mahon Channel
Islands Ltd. was it?
In the books of the bank, that is my memory, yes. I
think it was acting as a nominee really.
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1 41 Q. You see there was Guinness & Mahon Jersey Trust Ltd.
2 and that had gone, more or less, to fund College
3 Trustees?
4 A. That's correct, yes.
5 42 Q. There was Guinness & Mahon Channel Islands; Ltd.
6 A. Which was not trading.
7 43 Q. Which was not trading but its name was used?
8 A. Its name was used, yes.
9 44 Q. As the depositor?
10 A. As the depositor. So if we had, let's say 30
11 depositors in different names they now became
12 Guinness & Mahon Channel Islands A, B, C.
13 45 Q. With the code?
14 A. With the code, yes.
15 4 6 Q. If you continue then.
16 A. I think, what happened after that, some point after
17 that those deposits I think there were some new
18 clients from College Trustees, there were some new
19 clients in College Trustees in that period, in the
20 mid/late '70's College took on new clients which
21 would have been introduced, largely, by Dublin I
22 expect. At some point, I think, around 1979 the
23 bureau system was instituted, I think that is the
24 ' correct date.
25 47 Q. It may have been instituted, but we have letters
26 from Mr. Lipscombe from the Channel Islands in 1978
27 and also Mr. Furze at the same time?
28 A. That's the start of the bureau system.
29 48 Q. That was the start of the bureau system.
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1 A.
2
3
4
5
6
7
8
9 51 Q.
10 A.
11 52 Q.
12 A.
13
14
15 53 Q.
16
17
18 A.
19 54 Q.
20 A.
21
22
23
24 •
25
26
27
28
29
Yes, Mr. Ryan, the authorised officer, brought that
up with me. I am somewhat surprised by it and I
have racked my brain on it since then and I think
what it in effect was saying was that, in effect,
outside of Mr. Leonard, or whoever cont'jsplled the
accounts department, or Mr. Traynor, the only other
person who could have access to those accounts was
me.
Whatever the note said, you in fact had access?
To the Channel Islands, to the GMCI ones?
Yes?
I had access. At that stage I knew who some of the
clients were. In a lot of cases it was a refer to
Mr. Traynor, situation.
And that altered when the bureau system was
established and it was Mr. Leonard and later
Mr. Collery?
is that Mr. Lipscombe started to deal directly with
most of the Irish clients, by and large. I do not
think my recollection is, from my awareness anyway,
that there were probably very few new clients going
into College around that time, it doesn't mean there
were not, but to my knowledge there were not, but
there may have been direct dealings between
Mr. Traynor and Mr. Lipscombe or directly between
Mr. Lipscombe and...(INTERJECTION).
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1 55 Q.
2
3
4 A.
5 56 Q.
6
7 A.
8
9
10
11
12
13
14
15
16
17 57 Q.
18
19
20
21 A.
22 58 Q.
23 A.
24 •
25
26
27
28
29
the number of clients that were involved, the number
of separate deposits in the bureau system?
directly with the Irish clients?
I think at that stage from Mr. Lipscombe — from my
own personal point of view I had no wish to be
dealing, if people had affairs which were with
College Trustees I preferred that they were dealt
with by College Trustees. I was a corporate finance
executive, I got dragged into this thing back in
1974/76 and my main job in the bank was acting in
corporate finance. My position was to get on with
my corporate finance activities and leave the
Channel Islands activities.
I just want to understand how you understood
Mr. Lipscombe operated in relation to the monies
that were on deposit in Guinness & Mahon, how did it
come about?
How did it come about?
What would he do, how would this be operated?
Again, I had some discussion with my
recollection is that there were intercompany
accounts between the bank in London, that there
would have been intercompany accounts from London
because it was mainly sterling balances and I think
the large deposit that represented the bureau,
collected accounts, was still back in Dublin. I
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jg^j 1 think if some of the clients, if you wanted to get
2 money to some of the clients in Dublin communication
3 would issue by telephone, or otherwise, or direct
4 from the clients that they wished to collect some
5 money and that money might be provided them in
6 Dublin, they would call in and collect it.
7 59 Q. I want to find out how it'operated. When you say
8 there were intercompany accounts with London, what
9 were the companies that were interconnected?
10 A. I think they would just be the normal intercompany
11 accounts like Guinness & Mahon Dublin's account with
12 London. I think, at some stage, Guinness & Mahon
13 Guernsey came into it which was set up some time
14 later, which was owned by the London bank. Really I
15 wasn't involved in that kind of interbank side of
16 it, I am very hazy on it. Normally within a bank
17 like Guinness & Mahon all of the subsidiaries would
18 have accounts with the parent, clearing type
19 accounts, but the exact nature of the
20 accounts...(INTERJECTION).
21 60 Q. To come back to what you told us a moment ago in
22 relation to the clients who wished to obtain funds,
23 what would they do, did you say?
24 A1. I think in some cases, at that stage, I would have
25 had an awareness of who some of these beneficiaries
2 6 and clients were, which knowledge would have
27 increased over time from various points, or it could
28 have been an instruction from Mr. Traynor or a
2 9 request from Mr. Lipscombe that Mr. X would like to
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1 get some money: Please give Mr. X £5, 000. If that
2 occurred, I think if it occurred in the period when
3 there was the GMCI accounts it may have been a
4 direct debit. It might not have been me it might
5 have been Ru Leonard, it might have been'
6 Mr. Traynor.
7 61 Q. You were involved some of the time?
8 A. To some degree, yes.
9 62 Q. Tell me what happened?
10 A. Let's say there was a person who was well known to
/"•s 11 the bank and we knew he was connected with the —
12 Mr. Lipscombe rang and said: Mr. X wants to get
13 £5,000, he would call it in, give it to him. He
14 would call in and certainly once the bureau system
15 had been set up I would just debit it to his expense
16 account and inform Mr. Collery that I had so done.
17 63 Q. You would actually physically hand him over a cheque
18 or cash?
19 A. Cash or whatever, yes.
20 64 Q. And you would put it into his expense account and
/"-s 21 Mr. Collery would then deal with it?
22 A. Yes.
23 65 Q. From what you knew, I would imagine you would have
24 ' known fairly quickly that he put it there and he
25 dealt with it in accordance with the code. If it is
26 was £5,000 there would have been deduction?
27 A. He would now know the appropriate code account.
28 66 Q. So your involvement was as an official in the bank,
29 along with others, in making the payments that were
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v. j 1 required by the clients, from time to time?
2 A. That was part of it, I wouldn't say that that
3 happened on a very regular basis. There was a
4 continuing — there was some small administrative
5 role on a continuing basis with College^Trustees,
6 the accounts, the statutory accounts of College
7 would be agreed each year with Mr. Lipscombe.
8 67 Q. Were you involved in that?
9 A. I would maybe review them with Mr. Lipscombe, but
10 that would be on a purely company basis rather than
^ 11 on the basis of individual clients. I think that
12 summarises the most of it.
13 68 Q. This pooled deposit account was in the name of
14 Guinness & Mahon Guernsey Ltd. was it not?
15 A. I think at one point it was. I think my
16 recollection of that is that some time in the late
17 '70's or early '80's London decided to set up a full
18 bank in Guernsey to reactivate having a full bank
19 and in the early days of that the bank was set up
20 and Mr. Lipscombe was its first chief executive on a
21 pro-tem basis until London could staff it properly.
22 I think there may have been a time, I am just vague
23 on this, where the pool account was in the name of
24 • Guinness & Mahon Guernsey for a period.
25 69 Q. My information, I may have taken it up incorrectly,
26 was that at the time when the change took place that
27 I want to deal with now and the money
28 was...(INTERJECTION).
29 A. The bureau?
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1 70 Q . No, after the bureau when the College Trustees
2 system, when the Guinness & Mahon Cayman Trust
3 account in Dublin had an additional account with
4 College Trustees and that change occurred, the money
5*
that was on deposit from the Channel Islands was, I
6 think, in the Guinness & Mahon Guernsey?
7 A. I think that may well be.
8 7 1 Q . I want you to tell me about the change over that I
9 have just mentioned?
10 A. This to GMCT Re College.
1 1 72 Q . Yes.
12 A. I have no absolute recollection of it but I think it
13 would just purely be an administrative stroke of a
14 pen thing on Mr. Traynor's part. Instead of the
15 funds being routed through Guernsey they would just
16 be placed in the name, it is all just intercompany
17 stuff within the Group.
18 73 Q . That may be very familiar to you, but I would like
19 you to explain it to me in detail?
2 0 A. The change?
21 74 Q . Yes.
22 A. I just recall the change taking place.
23 75 Q . Just tell me what the change was?
24 A'. The change would have been that the pool deposits,
25 which were in Dublin in the name of the Guinness &
26 Mahon Guernsey were now, which would have
27 represented a deposit with the underlying companies
28 out in the Channel Islands with Guernsey, with
29 Guernsey placing those funds back in Dublin in a
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1 control, Guernsey would have been under London's
2 control, it was a London subsidiary, and it may have
3 been more profitable from the Dublin end for it to
4 be coming back to Dublin via Cayman, which was its
5
6
i
subsidiary, rather than coming back to Dublin via
Guernsey, which was London's subsidiary.7 81 Q. It was a commercial?
8 A. I think so, yes.
9 82 Q. This system operated and what was your involvement
10 in the system up to — that occurred in 1981?
11 A. Yes.
12 83 Q. Up to the time you left in 1988?
13 A. My involvement was fairly minimal in that period.
14 As I say, I had become aware of the identity of some
15 of the clients, some of those clients would contact
16 me if they wanted to make communication, a
17 relatively small number of them, but because I had
18 an awareness of who they were they would continue to
19 contact me. Some of them had back-to-back loans.
20 84 Q. Were you involved in the back-to-back loan
21 situation?
22 A. Only to the extent that I was on the credit
23 committee of the bank, from the late '70's, probably
24 • I think about 1977. The back-to-back loans, I
25 believe, had been going on for, predated that by
26 some considerable period. My recollection is that
27 if some of these people who had established trusts
28 are companies off-shore and they wished to borrow
29 funds, the procedure would be that it would go to
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>"*« 1 Mr. Traynor, Mr. Traynor would decide whether a
2 back-to-back would be granted and it would go
3 through in the normal way from a credit committee
4 decision. The existence of the cash deposit would
5 not be mentioned in the security letter. '
6 85 Q. I think the phrase used was "suitably secured "?
7 A. I think various phrases — I have no recollection of
8 an absolute, that this is absolute, the phrase was
9 quite loose I think.
10 86 Q. If one comes across on the document as "adequately
11 secured" or "suitably secured" that meant a
12 back-to-back loan?
13 A. Almost certainly. I believe it is possible there
14 were exceptions.
15 87 Q. They were not mentioned at all. The fact that there
16 were back-to-back loans took place was not mentioned
17 in the facility letters?
18 A. No, I think there is an issue, it wasn't mentioned
19 and the hypothecation, the funds would have been
20 hypothecated to either, I presume, Cayman or to
21 College by the underlying depositor and I think, de
22 facto, Dublin had the benefit of the knowledge that
23 those funds were there. I am not sure if legally
24 ' they could actually lay their hands on them, but
25 from a group point of view. I remember raising the
26 point with Mr. Traynor.
27 88 Q. At the credit committee this would have been raised?
28 A. Yes.
29 89 Q. Mr. Traynor would have said this okay?
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1 A.
2 90 Q .
3 A.
4
5
6
7
8 9 1 Q .
9 A.
10
1 1 92 Q .
12
13
14
15 A.
16
17
18
1 9
20
2 1
22
23 93 Q .
24 •
25 A.
2 6 94 Q .
27
28 A.
2 9
Yes.
And then this would be noted?
And we would just go to the Board then for formal
approval in the Board minutes and it would go to
London. I think London required returns,; London
had a keen interest in knowing which loans were
cashed back, eff ectively."
London would be informed?
They would, I believe, not by me but in the normal
banking...(INTERJECTION).
Yes. Could I return in time to the Cayman Island's
subsidiary, Mr. Keane, it had been established a
short time before you came to the bank I think.
What was your involvement in the Cayman Island?
Very little, I have known, very little. From time
to time I knew who the people were down there, I had
met Mr. Collins, I had met Mr. Furze and from time
to time one-off things might come up where
Mr. Traynor might, they might be on the phone and
they wanted to open an account or something in
Dublin, but no, it was very spasmodic and I had no
involvement really.
You knew some of the clients of the Channel Islands
Group?
Yes.
Did you know some of the clients in the trusts in
the Cayman Islands?
When I say no I would say I had a certain awareness
from the credit committee from the back-to-back
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1
2
3 95 Q .
4 A.
5 96 Q .
6
7
QO
9
10
1 1
12
13
14
15
16 A.
17
18 97 Q .
19
20
2 1
22
23
24 •
25 A.
2 6
27
28
2 9
loans that there were some very large back-to-back
loans which were suitably secured.
It was that way you got to know the people?
That is how I got to know them.V
Why I am asking you about the Cayman Island is that
we have obtained a document which was an internal
company document, obviousiy September, 1974, it is
not for circulation to clients, it is the Guinness
Peat Group, Cayman Islands, Exhibit 1, and it is
referred to at the first page that:
"... any request for information or
introduction to the resident personnel
should be referred to J. Desmond
Traynor or Martin C. Keane... ."
Whatever that was it was not operated, is that the
situation?
That is my understanding. I don't believe I have
ever seen this document, Exhibit 1.
I would like to get your assistance on another
aspect of the services that were given by Cayman.
We have been dealing with trusts with depositors who
were who were beneficiaries of trusts, but there
were a great number of other people who were on the
bureau system who hadn't trusts at all who made
deposits through Dublin, can you explain that?
I am not really familiar with that, Judge. As far
as I was aware the vast bulk of the customers of the
Channel Islands companies had underlying companies,
there may not have been trusts over them in all
cases. I don't believe that there were, certainly
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1 not to my recollection, any significant people
2 opening accounts in their own name or anything like
3 that, that there was always a company, as least, if
4 not a company and a trust or maybe there was a
5 company initially and at some point later a trust
6 may have been put over it.
7 98 Q . Were you aware of any individuals who were on the
8 bureau systems who had never set up trusts, who were
9 never companies in the Channel Islands or in the
10 Cayman Islands?
11 A. Not specifically that I can think of. This came up
12 last week in the context of the Moriarty Tribunal in
13 connection with Denis Foley and I gave evidence that
14 regard where Mr. Traynor introduced me to Deputy
15 Foley and informed me that he was minding funds for
16 Deputy Foley and didn't tell me where they were and
17 they could have been in either bureau system.
18 99 Q . We have had several witnesses who never had any
19 trusts in any country but who were operating on the
20 bureau system?
21 A. I just can't think of any.
22 100 Q . You didn't come across any?
23 A. I have no memory at this point. Is this taken from
24 • the '70's?
25 MR. JUSTICE COSTELLO: Perhaps we might have a
26 short break for a cup of
27 coffee now, would that be all right?
28 A. Yes.
29 MR. JUSTICE COSTELLO: About ten minutes, that's
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SHORT ADJOURNMENT
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ANSBACHER LIMITED / COLLEGE
RE A/C TC 431
» " Copy Statement **«
2,195,710.54
329,400.00
0.002,195,710.54
2,525,110.54
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ANSBACHER LIMITED / COLLEGE
C/O D P C
<
Balance brought forward
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ANSBACHER LIMITED / COLLEGE
RE A/C TC 431
»«* copy Statement ***
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3 4 0 6 1 7
fERNAL CALL D/A
UTCHMAKKS
N0V88
ANSBACHER LIMITED / COLLEGE
C/O D P C
I
Balance brought forward
3 1
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ANSBACHER LIMITED / COLLEGE
RE A/C TC 431
»«« Copy Statement ***
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TERNAL CALL D/A
•UTCHMAKKS
COLLEGE TRUSTEES LIMITED
• PO BOX 122
' MIGNOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS
<
»
Balance brought forward24 NOV 89 EXCH ANSBACHER LTD/COLLE
07 DEC 89 EXCH ANSBACHER LTD/COLLE
IDEC89
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COLLEGE TRUSTEES LIMITED
RE A/C TC 431
*•« Copy Statement '»'
1,300,000.00
1,272,360.99
2,585,207.01
1.285,207.01
2,557,568.00
*
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[TERNAL CALL D/A
2UTCHMARKS
9JAN90
COLLEGE TRUSTEES LIMITED
FO BOX 122
MIONOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS
Balance brought forward29 DEC 89 Int. Applied To 31DEC89
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) >COLLEGE TRUSTEES LIMITED
RE k/C TC 431
» " Copy Statement »•»
2 , 5 5 7 , 5 6 8 . 0 0
6 3 , 8 5 2 . 6 0 2 , 6 2 1 , 4 2 0 . 6 0
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COLLEGE TRUSTEES LIMITED
PO BOX 122
MIGNOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS
Balance brought forward
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COLLEGE TRUSTEES LIMITED
RE A/C TC 431
**» Copy Statement »»«
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) >40617 COLLEGE TRUSTEES LIMITED
PO BOX 122
MIONOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS
BRNAL CALL D/A
rCHMARKS Balance brought forward07 MAR 90 BXCH COLLEGE TRUSTEES LT
14 MAK 90 EXCH COLLEGE TRUSTEES LT
l O T K U K f l T T O DATK
\ R 9 0
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COLLEGE TRUSTEES LIMITED
RE A/C TC 431
*** Copy Statement ***
2 , 6 2 1 , 4 2 0 . 6 0
3 0 , 0 0 0 . 0 0 2 , S » l , 4 2 0 . 6 0
2 , 6 2 2 , 8 4 2 . 4 0
3 1 , 4 2 1 . 8 0 0 . 0 0
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Appendix XV (147) (1) (a)
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a m
Tom Conaty Limited:
£65,000
Working capital
3 Auguat, 1977
Guarantee Fee flat
Suttdbly Secured,
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Appendix XV (147) (1) (b)
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Minutes of the 204th Meeting of the
Banking/Credit Committee held at17 College Green, Dublin 2, onWednesday 17th May, 1978.
T
<
PHBSENT: J.D.T. - M.B.O'K. - H.P.D. - GMcC - BMcL.-I.W.X. - M.C.X
MONEY MARKET:
Imminence of nake up day in both London It Dublinheavily reflected In short end rates - positionaggravated by recent purchase and consequentialfunding of GILTS.
A general "phone around" to potential depositorshas been trail received and has resulted In a depositof £300,000 from
Both Inflow and Sterling positions are in order.
£$n. lent ' 3m/f 0 1% turn bringing totaldrawdown by then to fifm.
% '•FOREIGN B2DCBANGX:
Trade figures on Monday pushed rate up to 1.8240.Very heavy selling of Sterling out of Geneva yesterdaybrought rate below 1.81.Today - 1.8125.We sold Swedish Kroner 600,000 to
•w
We have arranged an Irrevocable Letter of Creditfor U.S. $ 61,592 -with forward cover to mld-Augusx.
765: Tom Conaty Limited
Amount: £50,000 (French Traac Equivalent)Guarantee.
purpose: Guarantee to Gexnant Barl,Hue Julien Groftleau, 44200 tfantesTerm t ource
of Repayments: 20th May, 1B78 - 20th August, 1978
Rate: 1% P.A. (i.e.
Security: Suitably 8ecured
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Appendix XV (147) (1) (c)
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NAME: TOM CONATY LIMITED
ADDRESS: Balmoral Fruit Market, Belfast.
BUSINESS/
OCCUPATION: Fruit Broker.
&idtt MamorandumSubmltud by: PQ'D
Equity Stakm No.C.B. Approval: Vn/NohmiWaiObiMOatt: NA
THIS APPLICATION: ' i*fctt**XXXX(OthM mmwertrtw)
AMOUNT: JGWJWflUStfc HATE: «*"
JEljOOOJtg. WJRTYPE: .-.fijHKHntftfl—
O/D
— FEE: RLfJl&L
PURPOSE/DRAWOOWN:
) To secure working capital facility from Ulster Bank Limited.
*)ecaetaml O/D facility.
TERM OF F AClUtlESl
(tension for 'one year
pwmltlrt prior tosnmpMon of Hcurlty?
Y E S / N O
REVIEW DATES:
31.03.89
SOSJRCC OP REPAYMENT:
SECURITY; •
.signed by Tom Conaty.
llsddMonalsraaMnt
tMHtv, b«Mir>tv In antm?YES/MS
If |Im AhiHi mMraMly*
BApconcxMbNonhE/(^ n J^ O P P R g ^A L : The guarantee has been In forea for a number of rears. We have been Informed J
for the year ended March, IflM are being prepared. He has stated tha t the•T has be^n a successful one and the accounts will show the cofaipany to be In a healthy s ta te. He hasiretail shops-all trading profltsbly.
ctensiea vecon mended.
nJQtsd PatRNiafBafiMMrr.. CREDIT COMMITTEE
(BalsnMAr Limit, whfehtw toyMWlMi nut* / J t A J z
•
" RtconnntmStd
.BOARD
Total Exposure £5 8,0 00>
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G+M• 0AMKCR5
'""*»* CUINM!SS MAMOM CAYHAN TRUST / COLLtCCCAUL A/C
« « " • • « teetXM
GUINNESS+MAHONL117CaNaa*On«iOijMbi2PO IhoSSATaiHman*
LT*IC«6fir NO.PA6C N O .
STBRttNCp/C CALL O/A LEDGER MAMMMNMIf
b(.4U4*4
.NX****!
£MR.
1 3 M V UIfcKAYBl•lNAY«3i
' < 1
A
•DALAlCe SROUCMT FORWARDffXCM CUtNHMS H C T•XCH COHATY TOM LTDOEP OFF CUIMMCSS M C T
OAK I
joo.ooo.aql, j eo. ool
curort
II
M M W
4 . 6 4 T , 2 L 3 . n
MHWMMMaiHItHnili:lllla*!
r s
CUTNNPSS MAHON CAYMAN MUS T / COLLTCBC / o 0 p c
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•ERED
THE COMPANIES ACT (NORTHERN IRELAND) I960
Annual Retnrn of a Company having a Share Capital
rv?C W l A s required by Part IV of the Companies Act (Northern Ireland) 1960 ^ ~
Annual Return of. -Jl L/ v ) r t
Ife'S/j 5;rs th te sfe;
- ^
i i i i i i i i t e p
-Limited*
made up to the.-, 3Jjj.£ day of. ^SS^kLSt^fZ
datR nf HIP Annniil Gaaaral Meeting fot the .yuiyjfrS
thr fanrtn'n<l> du/"fifliC4ln
* Delete ^Limited" if not applicable
1. Address of registered office
..UllsjOZ/Z.
.H i .szjgjzjsrV y-. fr , >- r.v,:',-'
" V T " - A -
2. Station of the Company's registers, etc., if kept at an address other than the registered office ^
(a) Register of members S iS ^ t V ^ K t rUjir-LQJOJL-
(b) Register of debenture holders
Presented by: Presenter's Reference- vas.
FORM No. 6A
•^/jfT'lBt: i l i n g ee is f 10)
I
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Summary of Share Capital and Debentures*
(a) NOMIN.
. Nominal share capital £_
SHARE CAPITAL
divided into:- wvjtum miu . i
sl .shares of.
_snares of.
..shares of.
.
(b) ISSUED SHARE CAPITAL AND DEBENTURES
Number
of shares of each class taken up to the date of this return/•»-Sch number must agree with the total show n in the list as held
existing members).
of shares of each class issued subject to payment whollyin cash.
of shares of each class issued as fully paid up for aconsideration other than cash.
of shares of each class issued as partly paid up for aconsideration other than cash and extent to which each suchshare is so paid up.
. . .. A> ° <\l£L
issued a3 paid up to the extent of £per share • »
'
issued as paid up to the .xttat of £per share
„/V
•iflifssf
*«J'V^lI , * < 1
_ shares
shares
issued as paid up to the exien t of £..per share
Number Class
6. Number of shares (if any) of each class issued at a discount.
7. Am ount o f discount on the issue of shares which has not beenwritten off at the date of this return.
...shares
As..GuU.£:~ — shares
- -shares
As &AJ £
8. Amount called up on numberof shares of each class.
£
Number
___..per share on 3...Q..O.—.
per share on..._ —
per share on.
Class
Sb£^....shares
1 shares
...shares
V " :
'i
hBo V#
Only par agraphs 13 and 14 of this sect ion relate to debentures. No part iculars are required in respect of debentures under any other para -
graph of seccion 3.„ r i number and c lass o f shares .
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9. Total am ount of calls received
Number
10. Total amount (if any) agreed to be c on-sidered as paid on num ber of shares ofeach class issued as fully paid up for aconsideration other than cash.
£ iu..D.<V_<i=. . o n
Class
..shares. shares
- shares
11. T otal amount (if any) agreed to be con-sidered as paid on number of shares ofeach class issued as partly paid up for aconsideration other than cash.
12. Total amount of calls unpaid .
»f. /V O on -
.......shares
. . . shares
-....shares
... ,. f- Aj QMS
13. Total amount of the sums (if any) paid by way of commission in respect of any shares . \ / \ j o AJ & 'or debentures . . . . . • ^ . -• ". • ! • • '!« < ; • f £ . / —2j__
• • . - • • • . . . . " *
of the sums (if any) allowed by way of discount in respect of any deben-- ; -; date of the last return 1 J -
14. Total amounttures since the
i: Number AM
Aj
Class
15. Total number of shares of each class forfeited.
16. Total amount paid (if any) on shares forfeited
....shares
—..shares
. share:
17. Total amount of shares for which share warrants to bearer are outstanding . . £_
18. Tota l am ount o f share warrants to bearer issued and surrendered "1 Issued:respectively since the date of the last return. fJ Surrendered:
19. Number of shares comprised in cach share warrant to bearer, specify- \ing in the case of warrants of different kinds particulars of each kind. / -
4. Particulars of Indebtedness
Total amount of indebtedness of the company in respect of all mortgages and chargeswhich are required to be registered with the Registrar of Com panies under the C omp- (anies Act (Northern Ireland) I960, or which would have been required so to be . ^ -registered if created after 1st July, 1908. J —
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t of Past and Present Members
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# r •vj>
y
IU£
0
5
1•a
3C9ena«3a2
Boz
Account of Shares+ 11
*
Number of shares oramount o f s tock held byexisting members at date
of return
Particulars of shares t ransferred s ince the date o f th elast return, or, in the case of the first return, of theincorporation of the company, by (a) persons w hoare still members and (b) persons who have ceased
to be members
- o Remarks
v v . ,v. • ». •; -V :
Number of shares oramount o f s tock held byexisting members at date
of return
NumberDate oj registration of • »
transfer
* f
'<.•« vXC V/ '»"• • ' TV ' - ; :
2.o.a.
(a ) Co)
joa
— —..._ —
L « : i^^^it'r^vX ^^^vv^'^L i ' ^ i i ' f •? 1
joa •zZZl-
— —..._ —
** * >
SJBCL
•zZZl-X
SJBCL..;.--. v -rr .• :is « •
SJBCL
J
* t <
n i \ri t' < f
-•••••-j w *
v.- y/ Tv nvtr-\"
t + Z A-•••••-
M ^ M. •••na.y .f.r^h r - • .> .• •• •• . .. : • .. v"
: , * r
, - ;
. /-Vh j;
' ". Lr.-J.
— —
.. —i.iw-Vf--.;^-; •• r - - " •— —
: —
— —
: —
.. .. y, j— —
- —
— —
- —
- - -- -
- • - • •• - • •• - • •• - • •• - • •
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•A
. Particulars of Directors and Secretaries (N ote s overleaf)
i sParticulars of the persons who are directors of the company at the date of thi return.
1if'
" " t £ • ' k X f S !
H j ,, ** f 'f^JSeA
Name
ChKSMsfr^&y..
Any former Christian lar't. r r v W W f M C & t f - t f
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Il l
m41
t)
|
2
a
•oWl£
•1
"3
6
<u§
ISon
e
Soz
Address Business occupation an d particulars o f o th erdirectorships
Date of Birth
v , ; • . ' .! "-.v.. »(.;.•.....':(-n: ..
/ I ' , |
..." .. db o "• ' '
\ < j t •
/ -
r t 1 * 1 ' ' '
""ft l -
^ I l l i i i S i l ^< ' '1 , •
• "' 'v - " " " ' .Y ; • ; ;•„.. > M .1
I : i C l^jr^iy jj; , ! : r : Jl; v--.
1 1- 1 f
• ... . ; ,.: • i: .;: • • . •• ••< .i-. .1• • • ; : • • <
1
' . ]':' : , ' : • j;!.
::- in | >.s
1
' . ]':' : , ' : • j;!.
::- in | >.
; •'•"• ••" ".'•' '" •":. J1>;' »s • vl j . i
Signed... -.Director
Signed1
Certificate to be given by a D irector and the Secretary of every Private Company
We certify that the company has no t since the date of m e last annual return (or, if this is the first return made,
since the date of incorporation o f the company) issued any invitatio^-tp the public to subscribe for any shares or
debentures of the Com pany.
.Secretary
.Director
Secretary
Further Certificate to be given as aforesaid if the Number of M embers of the Company exceeds Fifty
We certify that the excess o f the number of members of the company over fifty consists wholly of persons who,
under paragraph (b) of subsection (1) of section twenty-eight o f the Com panies A ct (Northern Ireland) 1960, are n ot
to be included in reckoning the number of fifty.
Signed Director
Signed. ...,Senetary
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-ilea. VTE Director" includes a:iy per:on .vho occupies 'he position ai l director ay '.vhaacevsr«»ith whose directions or instructions the directors of the orrpan> i - accu ~d o
and "surname", in the case at a neer or :Christ ian name" includes a forenamesurname, means that rids.
"Fo rme r Chr i s t i an name " and " former sur nam e" do no t l ac luue :
(a) in the case of a peer or person usual ly kn own by a 3nt isn t it le different iprevious to the adopt ion of or succession to the t i tle; or :
urname, the namv'afv
(b) in the case of any person, a former C hrist ian name or surname where that nam e or surname was changed'the person bearing the name at tained the age of eighteen years or has been changed or: disused frir« »than twenty years; or : • -••••.• •>••
mi-xftshj
or
(c) in the ease of a married wom an the nam e or surnam e by which she was known p revious to1 the n r n r r i a o ^ p S i r -
disused for a '
tm MThe names of all bodies corporate incorporated in Northern Ireland vmch fhe director is also£<
be given, except bodies corporate of which the company making the return is the wholl y-o wn ed's ufe iu^corporate which are the w holly-owned subsidiaries either of the company ->r of another compa ny'of IvhichTthe^^is the wholly-owned subsidiary. A body corporate is deemed to be the ,viiolly-o wned subsidiary ofaxioth^jfSS;members except that other and that other's whoily-ownea subsidiaries and its or then- no m ine esy f t h e ' s p ^ ^ a Lin the form is insufficient, particulars of other directorships should oe !t tea on a -eparate statement 4ttach^"Hv*iform. • • , • . . ''' ' y i W
"Dates of birth need only be given in the case of a company which is subject to section 176*ofthe'Comp;
re :ed under the law relating to companies for the time being in force m Great Britain and having provHoiL,constitution which would, if it had been registered in Northern Ireland, entitle it f o rank as a private^Comp^n^
Where all the partners in a firm are joint secretaries, the name and principal office of the firm" may tesfa$
;; " J
i Certified Copies of Accounts
Except where the company is either a private company as defined by section 2 3 of the "CoxnpiuuesjActfmoi
Ireland) I960, or an assurance company w hich has complied with the provisions o f section 7(4) o f thc'ASu
Com panies Act, 1909, there must be annexed to this return a written copy, certified both-by a,director" &nd'
secretary of the company to be a true copy , o f every balance sheet laid before the comp any in general meeting^
the period to which this return relates (including every document required by law to be annexed'to the balance* &
and a copy (certified as aforesaid) of the report of the auditors, on , and o f the report of the dirMtors~accom;each such balance sheet. If any such balance sheet or document required by law to be annexed thereto is in
language there must also be annexed to that balance sheet a translation m English o f the balance'sheet or
certified in the prescribed manner to be a correct translation. If any such balance 3heet as aforesaid or ticcumentn
/•""""Maw to b e ann exed thereto did not comply with the requirements o f the law as in force at the date o f th e
.ospect to the form of balance sheets or documents aforesaid, as the case may be,, there must be m ade suchr > _ » f»< - « t. H
to and corrections in the copy as would have been required to be made in the balance sheet or document ii
make it comply with the said requirements, and the fact that the copy ha3 been 30 amended must be stated
Banking Companies
A banking company, in order to avail itself of the benefit o f s. 380 of the Com panies A ct (Northern Ireland) 196ft
must add to this return a statement o f the names of the several places where it carries on business. - - "
Qm.075632 5,000 3/73. N.6K.(N.I.)Ud. Gp-3162
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Appendix XV (147) (1) (f)
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C R O / T '•hi.:-- ""
f
jV i
si
. -
Ho. of Company-
THE COMPANIES ACT (NORTHERN -IRELAND)
Annual Return of a Company fradag
Annual Return of.... To M
' - • • • • > • • • .Limited*
made up to the_
•• ••••_day of. — : f o w r t c e a t h day afterJLhc
- $ « X DeJcto "Limited** if not applicable
' • • . v r ; h * : ,;,.:;.../...-J.';
1. Address of registered office
- • r J->. ..-J tjJ. i . . ^ i i - 'v :J f%c Muz.ili*,'
73 ST/ZSET
/0£L F#$ T J .
2. Situation of the Company's registers, etc., if kept at an address other ihaa the xegjstmd offlce J ;
(a) Register of m em bers ( < v £ t J J / v < r T n ^ ' tf^1* 7 ~
(b) Register of debenture holders-
Presented by: Presenter's Reference—
r -I
Ju
FORM No. 6A
(Use filing fee is £10)
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« T
SL .3.. jnmary of Share Capital and indentu res*
(a) NOMINAL SHARE CAPITAL'
, A '/>,v A- B
1. Nonninal share cap ital £_
2..Q....CL.CI
.divided into:
^ T vt 4 j
< » t > sr.
^jtebaOii&ciaj..
(b) ISSUED SHARE CAPITAL AND DEBENTURES
Number
2. Number of shares of each class taken up to the date o f this return(which number mu st agree with the total shown in the list as heldby existing members).
3. Number of shares of each class issued subject t o payment whollyin cash.
4. Number of shares of each class issued as fully paid up for aconsideration other than cash.
5. Number of shares of each class issued as partly paid up for aconsideration other than cash and extent to which each suchshare is so paid up.
issued as paid up to
per share
issued as paid up to the of Lper share - M N M ^
I iF
vJJ
1 K'c
& p—Itissued as paid up to the cxlmf jt S — - l l r t ~ k K
^per share y r ^
Number Class
6. Number of shares (if any) o f each class issued at a discount.
.shares
.shares':-will'........shares
7. Amount of discount on the issue of shares which has not been fwritten off at the date o f this return.
8. Amount called up on numberof shares of each class.
Number
'£ _._/. per share on.....JLQ..C«L-
£ per share on
£ ...per share on.
Class
jU^x^/. . . . shares "
shares
shares
• Only paragrap hs 13 and 14 of this section relate to debentures.
graph of section 3.
Insert number and class of shares.
No part iculars are required in respect of debenture s unde r any other pa ra-
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5. Total amount of calls received
3 * 0£
Number Class
10. Total amount (if any) agreed to be con-sidered as paid on number o f shares ofeach class issued as fully paid up for aconsideration other than cash.
_on
-shares-shares
.shares
11. Total amount (if any) agreed to be con-sidered as paid on nom ber of shares ofeach class issued as partly paid up for aconsideration other than cash.
.on« * r
•H&SaMig;
..shares
-shares
.shares
12. Total amount of calls unpaid .
13. Total amount of the sums (if any) paid by way of commission in respect of any shares' \or debentures " . • • • • J * —
jSf SSSIf/Wfit
14. Total amount of the sums (if any) allowed by way of discount in respect of any deben- \tures since the date of the last return . . . • • • ~ - ~ J £—
15. Total number of shares of each class forfeited.
ft
Number »t)- ^ Class
.shares
.shares
.shares
16. Total amount paid (if any) on shares forfeited
17. Total amount of shares for which share warrants t o bearer are outstanding
18. Total amount of share warrants to bearer issued and surrendered T Issued: £_respectively since the date of the last return. V
J Surrendered: £_
19. Number of shares comprised in each share warrant to bearer, specify- \ing in the case of warrants of different kinds particulars of eacf kind. / .
4. Particulars of Indebtedness
Total amount of indebtedness of the company in respect of all mortgages and chargeswhich are required to be registered with the Registrar of Companies under the Com p-anies Act (Northern Ireland) 1960, or which would have been required so to beregistered if created after 1st July, 1908.
A/OAJi
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S3 ii
t» v tx
I '1
- '*:>;.'.
a
W mF
§
?
"•Vj
1
§
s«3M
jak£
!a•ftSi
a
§
Account o f Shares
Number of shares oramount o f s to ck held byexisting members at date
of return
JZ .a.£L
I.0.-0-
Particulars of shares sransfzrr *d since the date of th elast return, or, in the case of the first return, of theincorporation of the company, by (a) persons whoar e still members and (b) persons who have ceased
lobe members
NumberDate of registration of .
transfer
(a) (b)
Remarks
litl
\ >f
1
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6. Particulars of Directors and Secretaries (No tes overleaf)
Particulars of the persons who are directors of the company at the date of tiu . ^ cum .
-w ii J. *•
"" S Ti
Name
&&JLLE. CS3JU&T-y
JZaj^J^^LjL __
Any former Christian tameor names and sumom*.
Particulars of the person who is secretary of the company at the date of this return.
Name
S&&JV2A QQAL^GULjL^L
Adik&sj
*
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Address Business occupation an d particulars o f o th erdirectorships
Date of B ir th
O
z
37 >9^£/2S<dajsto to rvi G-oJ £c-<Lf=^?s:T
A ,
j T/.«J t- caAS^ iiZBklL
§I
JS
T3aaM
I
3ja•a
5
43a•6b .Secretar
Certificate to be given by a Director and the Secretary of every Private Company
We certify that the company has n ot since the date of the last annual return (or, if this is the first return madi
since the date of incorporation o f the company) issued any iavpjation to th e public t o subscribe for any shares c
debentures of the Company.
^ 1 fiI [/ .Directo
Further Certificate to be given as aforesaid if the Number of Members of the Company exceeds Fifty
We certify that the excess of the number of members of the comp any over fifty consists wholly o f persons wh
under paragraph (b) of subsection (1) of section twenty-eight o f the C ompanies A ct (Northern Ireland) 1960, are n
to be included in reckoning the number of fifty.
Signed-. Direct
Signed. .Secreta
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' VES : "Di rect or" includes any parson who occupies the position of a d i recaw by wnaacever n a r r j - a i l a ^ j f -..,,,7 ''"with whose directions or instructions the directors of the com pany are icc u tc ired tu ic \ ><T«.:j 3
"Gt ria t ian nam e" includes a forename, and ••surname", in :hc case of a peer or oerson >jxunj;su rna m e, me ans that title. ;,•••,•-.,<.:-•
•f VJ , <
Mown i-
"Fo rme r Chris t ian .same" and "former su rn am e' do not Include: ; * 1 ^-flv i? t - ^ ^ ' I(a) in the case of a peer or person usuaiiy kno wn by a Brit ish t i t le differeuc trom ais surnam e . te aa me b ynb Jfi , % w S ^
previous to the adop tion of or succession to the t i t le ; or J . tT^ 1 ^ " ^ j i s ' * 5 '" ir ^(b ) in the case o f any pe rson , a fo rmer Chr i s t ian name o r su rname when ha t j j m c o r l am ar^e -was ciua®d ar Pf
4
the pe r son bear ing the name a t ta ined the age o f e ighteen yea rs o r j s ^een »han j*d . r J t su sed o r i pa f^n ^ ^ 'than twenty or
»
(c) in the case of a married wo ma n the aam e or surname by which she vas JJIL. VU r " r u U 3 O h e T a m i j a , «-
The names of all bodies corporate incorporated in Northern Ireland > x which uirector j aLo a
. 'ano ther :/ ttth& jprics'^
form is insufficient, particulars of other directorships should be listed on a se-a raie >ta tcm enta tiacS ^f.. * * t " i * itcv * *
.,..„» fDates of birth need only be given in the case of a company which is subject to se -tion 17S of the Companl^'^North ern Ireland) 1960, namely, a company which is not a private company or which, being a private com vmffcm
of a body corporate incorporated in the United Kingdom which is neither a -rr/ate company nora OTtntW/jJU'>cstered under the law relating to compan ies for the time being in force in Great'Br ta.n ana aavmg pr ov is fo ^ M la 'S ,jStitution which would, if it had been registered in Northern Ireland, entitle it to rani j3 x prvate Corngaa"}^ - ^ ^ ^
Where all the partners in a firm are joint secretaries, the name and principal office of Jia firm may ceatat
'Certified Copies at" Accounts
I1 »
Except where the company is either a private company as defined by section 23 o f the Co moaaies Ac t
1960, or an assurance company which has complied with the provisions of section oftlM
panies Act, 1909, there must be annexed to this return a written copy, certified oodi by;, a .director aa fe yf eetary of the company to be a true copy, of ever/ balance sheet laid before the com pa a/ in scneral meeting dm
J M annexed the balan cfr^a copy (certified as aforesaid) of the report of the auditors, o n, and o f the report of the Erectors iccorapan
If any such balance sheet or document required by law to be annexed thereto is m^a!
fied in the prescribed manner to be a correct translation. If any such balance sheet as aforesaid or document jj*
v law to be annexed thereto did not comply with the requirements of the law as in force at tha 'daie. of the -audit wl
pect to the form of balance sheets or documents aforesaid, as the case may be, m eri m ust c e made ju ca w
o and corrections in the copy as would have been required to be made in the balance sheet or document in ordermake it comply w ith the said requirements, and the fact that the copy has been 30 amended must be stated ih>
. , - •; - . 2s,1/
BanJung Companies F tf^V
A banking compan y, in order to avail itself of the benefit of s. 330 of the Companies Act (Northern Ireland) I960,ust add to this return a statement o f the names of the several places where it carries on business. ^ t
.:s '.•:
Dii032307 1m 7p~ 3LC Cpi39 SS6CO
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5/Ch' j T O M 'C' N A 7 Y L T D (N I j / L. 7 \ 1 O O
r i r i f i i Hinfrvwitr
No. of Company...
THE COMPANIES ACT (NORTHERN IRELAND) 1960
Annual Return of a Company haying a Share Capital
As required by Part IV of the Com panies Act (Northern Irela id) 1960fE
R E G I S T E R E D
2 1sfEB 1979
Annual Return of
ji£>jw.__ jgr o » v q t
made up to the 5 J day of..
date of the Annual General Mee ting for the year 19 ).
^81(be ing the fourteenth day after the
' ^ J ^ f ^ w l ^ ^ s ^ - \ A-y- '; v.,• Delete "Limited" if not applicable
1. Address of registered office
i -J1A&ZE& ,„;<*W/< /
<£cfZL
tfrtttST f
2. Situation of the Company's registers, etc., if kept at an address other thairffia registered office4
(a) Register nfn mhfrr* ( f L ^ T & l S H
(b) Register of debenture holders - (SJ ^rW" .J^CteHB-
Presented by: Presenter 's Reference—
J^rnJ^A y .
-j r n i.' >•' i
~ FORM No. 6A
• {T^ IHag^fee&SlO)
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, S u m m a r y of Share Capital and Debentures*
(a) NOMINAL SHARE CAPITAL
1. Nom inal share capital £ ^ Q O Q divided into:
y o o £> o fO>tAJ fHZ-
(b) ISSUED SHARE CAPITAL AND DEBENTURES
Number
2. /""Nmber of shares of each class taken up to the date of this returnaich number m ust agree with the total shown in the list as heldby existing members).
3. Number of shares of each class issued subject to payment wholly1 in cash.
4. Number of shares of each class issued as fully paid up for aconsideration other than cash.
5. Num ber of shares of each class issued as partly paid up for a—Consideration other than cash and extent to which each such
hare is so paid up. issued as paid up to the e cient oil..per share
issued as paid up to the extent of £per share
Number Class
..shares
6. Number of shares (if any) of each class issued at a discount. .shares
..shares
7. Amount of discount on the issue of shares which has not been fwritten off at the date of this return. \ £
Number
'£._. _ £ i per share o n —
3. Amou nt called up on num ber I £ per share onof shares of each class. j
£ per share on
Class
shares
/shares
..._ shares
» Only paragraphs 13 and 14 of this section relate to debentures. No particulars arc required in respect of d ebentur e under an y other para-irranh of section 3.
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R O X T O M C O N A T Y L T D (NI) 0 2 7 ) 1 0 0
9. Total amount of calls received
Number
10. Total amount (if any) agreed to be con-sidered as paid on number of shares ofeach class issued as fully paid up for aconsideration other than cash.
11. Total amount (if any) agreed to be co n-sidered as paid on number of shares ofeach class issued as partly paid up for aconsideration other than cash.
on •<
f't,
-on
...* i» '
12. Total amount of calls un pai d. . . . . .
13. Total amount of the sums (if any) paid by way of commission in respect of any shares \or debentures . . . . . . . . • • - - * >J
14. Total amount of the sums (if any) allowed by way of discount in respect of any deben-tures since the date o f the last return
ct of any deben- \/ J
Number
15. Total number of shares of each class forfeited.
16. Total amount paid (if any) on shares forfeited
17. To tal amount of shares for which share warrants to bearer are outstanding
18. Total amount of share warrants to bearer issued and surrendered Issuedrespectively since the date of the last return.
J Surrendered: £_
19. Number of shares comprised in each share warrant to bearer, specify- \ing in the case of warrants of different kinds particulars of each kind, f -
Class
Class
/
.shares
-shares
-shares
-shares
-shares
.shares
-shares
. haret
_sharo
4. Particulars of Indebtedness
Total amount of indebtedness of the company in respect of all mortgages and chargeswhich are required to be registered with the Registrar of Companies under the Com p-anies Act (Northern Ireland) 1960, or which would have been required so to beregistered if created after 1st July, 1908.
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: r o / ' ' - • M C - I ' N A T Y L T r
List of Past and Present Memljers
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OM COMA ry L T D .. N , } ,,£ y , O Q
Account o f Shares
Number of shares oramount o f s to ck held byexisting members at date
of return
3oa.
Particulars of shares transferred since the date of thelast return, or. in the case of the first return, of theincorporation of the company, by (a) persons whoare still members and (b) persons who have ceased
to be members
NumberDate of registration of
transfer
(a) Xb)
Remarks
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yaw
y
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'3, CR< jN ATY (M •'27 1 '! GO 23
j _.
Address
^bo
Business occupation an d particulars of otherdirectorships
> cntu&urrfmji.
Da te o f B ir th
Signed.
Signei
Certificate to be given by a Director and the Secretary of every Private Company
We certify that the compa ny h as not since the date of the last annual return (or, if this is the first return made,
since the date of incorpo ration of the company) issued any invitation to the public to subscribe for any shares ordebentures of the Company.
Further Certificate to be given as aforesaid if the Number of Members of ti» Company exceeds Fifty
We certify that the excess o f the number o f members of the company over fifty consists wholly of persons whc
under paragraph (b) o f subsection (1) of section twenty-eight of the Comp anies A ct (Northern Ireland) 1960, are nc
to be included in reckoning the number of fifty.
S igned \D i r c c £ c
Signed — -i- , —— jSecretai
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US: "Director" inclines any penon who ;ccupies the position•srith'whose directions or tuvtructions the directors ol the ccm
•>1 i J ir sc to r b y w i u w - /e r l a m j i d ^ ' a j j u .
cmiv.wr if- accu-toraed -o id. "vv^ , ("Christian aam e" includes a forename, andsurname, means that title.
surname" , in :ne o f a p ee, or - e n c n o s w . l , W v ^ V i ',1 'j | Is
'Former Christ ian name" and
fa) in the case ofprevious to
"former surname" do no t inciudc:I t L
>S a peer or person usually 'mown by a British title different from u s -ur -ai« , tte"ijura "the adoption of or succession to the title; or
(b) in the case of any person, a former Christian name or surname • vhere hat name ~r J u r a W w a V ^ . ' i j / u ^ sbearing the name attained the age of ei-jhteen years or lias oeen chunked * il m - ^ T v l' l 3 1 •<«*
™ ""
(c) in the case of a married w oman the name or surname by which she was 'cnown ?rsviau s tiSst' iV "
the personthan raenty years; or
j- r* M
becorporate which are the wholly-owned subsidiaries either of tue company or ot another comnany^oi v ic eiis the wholly-owned subsidiary. A body corporate is deemed to be the wholly-owned Jub idiarT'pf iahtA s '^ V^I jmembers except that other and that other's wholly-owned .subsidiaries and its or their nominees!. l ^ ^ T ^ tin the form ij insufficient, particulars of other directorships should be luted on a ka r a t e jtat^mir H h J t w /fo r m •'*"
• ' . ' • • . • • * » H ftp
Dates of birth need only be given in the case of a company which is suoject to section \7o o f: (Northern Ireland) 1960, namely, a company which is no t a private company or wh ichT being a pr iv i t f^ w
Where all the partners in a firm are joint secretaries, the name and principal office the firm b ay;•• r n M
Cer tLSed Cop ies of Accammto
Except where the company is either a private company as defined by section 23 of the ComsamAJ Act Oo'ffte
Ireland) I960, or an assurance company which has complied with the provisions of section* 7(4) o r ^ a a ^ n r
. . . ... . . J ' 1 \ ™v «>-t e f j ?ompanies Act, 1909, there must be annexed to this return a written copy, .eriified b oth b ^ a di /^ to runca
- secretary of the company to be a true copy, of every balance sheet laid before ihe company In ^ d r a i' i^ ii aj ^ y J
the period to which this return relates (including every document required by law to be anne-ted ro Ln^^atwdJaSj
and a copy (certified as aforesaid) of the report of the auditors, on, and of the report of the d •ctors ac ^ o i^ j ^• each such balance sheet. If any such balance sheet or documen t required by 3a-v to be annexesi her eto 13 m a
. language there must also be annexed to that balance sheet a translation in English of the balanc J inesll ^
certified in the prescribed manner to be a correct translation. If any such balance- jlwat as Aforesaid or docum ent^/ " * s b y law to be annexed thereto did not com ply with the requirements of the law cu ia fo r« it the dale of the 'iuc
respect to the form of balance sheets or documen ts aforesaid, as the case may be, there must be m ad ^j ue h ld
to and conections in the copy as would have been required to be made in the balance jhe„t or document iaVr^
make it comply with the said requirements, and the fact th afthe cop j haj been Jo xmeaded must be stated there
Ban iing Companies ' ^1 ' >i
A banking com pany, in order to avail itself of the benefit of s. 380 of the Comp anies Act (Northern Ireland) I960must add to this return a statement of the names of the several places where it carries oh business. *
O O B 2 J 3 - t 5 m 1 0 / 7 7 V / S M G p l 8 5 A / 7 i o - r
O O a S S b J 5 m 5 , 7 3 A 7 9 6 8
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Appendix XV (147) (1) (h)
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G / C RO / T Ci v i C O N A T Y L T D ( Nl ) / 2 7 1 1 0 0
C OM PA NIE S R EG IS TR YIDB HOUSE
64 C HIC HE ST ER S TR EE TBELFASTBT1 4JX
A N N U A L R E T U R N
<2/7 ^ \ . •
Jl . t A -
T OW C ON A T Y U UllM ,'
X ' c o m ^ y ^
J*NI04849
PR LTD SH
S
The information pr inted below is taken from
Companies Registry records as at the date shown.
If th is information requires a m end me nt use the
spaces opposite. Please read the notes for guidance
before com plet ing the return.
DATE OF THIS RETURN (See note 1)The information in th is return sh ould be m ade u p to adate not later than 2 5 / 1 1 / 2 0 0 0
TRADE AND INVESI WifcHl
1 5 MOW 2000
POST RECEIVED jn n MP A N lE S R fc G iS T R Y j
DAY MONTH YEAR
Jit I I ' O
D A T E O F N E X T R E T U R NIf you wish to m ake your next return to a date earl ierthan the anniversary of th is return plea se show thedate here. Companies Registry wi l l then send a format the appropriate t ime.
DAY MONTH YEAR
REGISTERED OFFICE (See no te 3 )This is the address registered by Companies Registry
B A L M O R A L LINK
B OU CH ER R OA DBELFAST
BT12 6SD
P R I N C I P A L B U S I N E S S A C T I V I T I E S
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G / C rO / T O M c o n a t v L T d
S IS TE R O F M E M B E R S ( b e e rtoiw w, 2 6
, ar "?ss m us t be in- N or th er n I re lan d
If the informat ion shown n eeds am endm ent,give detai ls below, and for secretary anddirector p art iculars, the date of any change.
EGISTER OF DEBENTURE HOLDERSSee note 6)his address must be in Northern Ireland
— ^
Particulars of a new director or secretarym u st be not if ied on form 296 (see note 7)
Company Secretary
THOMAS MATTHEWCONATY13 F OR TW IL LIA M P AR KBELFAST
B T15 4 A L
If th is person has cease d to be secretary/ d a y MONTH YEARdirector please state whe n.
Particulars of a new director or secretarym us t be not if ied on form 296 (see note 7)
Director
MR THOMAS E
CONATY lo87 ANDERSONSTOWN ROADBELFAST
/± CL _s PfzQ c£
' QoK
Cg_
J l ^ A .
B Tll 9 BS
DA TE OF B IR TH : 2 7/03 /1 92 1
N ATIO NA LIT Y: IR ISH
O CC UP AT IO N : D IR EC TO R
If th is person has c ea se d to be a d i rec tor /s ec r e ta r y , p l eas e s ta te when .
DAY MONTH YEAR
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G / C R u / T O M C O N A T Y L T D (Nl) / 2 7 1 1 0 0 2 7
If the in format ion shown needs am endm entgive detai ls below and the date of anychange.
If this person has cea se d to be director/secretary please state when.
Show any relevant current and previousdirectorships.
DAY MONTH "YEA R
> . ~ . - '
If this person has ceas ed to be director/secretary please state when.
DAY MONTH YEAR
Show any relevant current and previousdirectorships.
DAY MONTH YEAR
If th i s person has ce as ed to b e d i rec tor /
s ec r e ta r y p l eas e s ta te when .
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G / C R O / T O M C O N A T Y L T D ( N M / 2 7 1 1 0 0 2 8
' S S U E D S H A R E C A P I T A L ( S e e n o t e 8 )Enter deta i l s o f a l l shares i n i ssue a t the dateof th i s re turn .
A G G R E G A T EC L A S S N U M B E R N O M I N A L V A L U E
T O T A L S
LIST OF PAST AND PRESENT MEMBERS(See note 9)(Use attached schedule and addi t ionalsheets where appropriate)A ful l l ist is required if one was not includedwith either of the last two returns
'•ifiV'ii
Please markappropr iate box
There were no cha nge s inthe period
A l ist of changes isenc losed
A ful l l ist of membersis enclosed
• '•
ELECTIVE RESOLUTIONS (See note 10)
(Private com panies only)If an elective resolution is in force at the date of this return to dispen se withannual general meet ings, mark the box. •f an elective resolution is in force at the date of this return to dispens e with
laying accounts in general meetings, mark the box.
CERTIFICATE
I certify that the information given in thisreturn is true to the best of my knowledge
and belief.
Cheques should be made payable to theDepartment of Enterprise, Trade andInvestment (DETI)
SIGNED Socrctafy/Director(delete as appropriate)
DATE _ Q . \ L _ O O -
This return includes
cont inuat ion sheets.
T o w h o m s h o u l d C o m p a n i e s R e g i s t r y d i r e c t
any enqu i r i es abou t t he i n fo r m a t i on s hown i nthis return?
- T - t A . Co
T e l e p h o n e E x t .
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Appendix XV (147) (l)(i)
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ARTHUR COX
EARLSFORT CENTRE, EARLSFORT TERRACE, DUBLIN 2
T EL + 3 5 3 1 6 1 8 0 0 0 0 FAX + 3 5 3 1 6 1 8 0 6 1 8 D x 2 7 D UBLIN
m a i l @ a r t K u r c o x . c o m k t t p : / / w w w . a r t h u r c o x . c o m
BELFAST
S T O K E S H O U S E , 1 7 - 2 5 C O L L E G E S Q U A R E E A S T
B E L FA S T B T 1 6 H D
T E LE P HO N E + 4 4 2 8 9 0 2 3 0 0 0 7
F AX + 4 4 2 8 9 0 2 3 3 4 6 4
LONDON
2 9 L U D G A T E H I L L
L O ND O N E C 4 M 7 J E
T E LE P H ON E + 4 4 2 0 7 2 1 3 0 4 5 0
F AX + 4 4 2 0 7 2 1 3 0 4 5 5
NEW YORK
5 7 0 L E X I NG T O N A V E N U E , 2 8 T H F L O O R
N E W Y O R K, N Y 1 0 0 2 2
T E LE P H ON E + 1 2 1 2 7 5 9 0 8 0 8
F AX + 1 2 1 2 6 8 8 3 2 3 7
OI'K IMI-NRNXCI: VOIR REFCRENCI;
AJL/sabDirect Dial: 618 0425
13 th September 2001
BY COURIER
STRICTLY PRIVATE & CONFIDENTIALADDRESSEE ONLY
Ms. Mary Cummins,Solicitor,Office of the Inspectors to Ansbacher (Cayman) Limited,Third Floor,Trident House,Blackrock,Co Dublin.
Re : Our Client: Mr. Tom Conaty
Dear Ms. Cummins,
I am writing further to my letter dated 23 August 2001.
I have met with M r Conaty and I enclose a statement which has been approved by Mr Conatywhich deals w ith the issues raised in the Inspectors' previous correspondence.
I look forward to hearing from you in due course.
Yours sincerely,
HOLJ
ANDREW LEN£G^
JAM E S O ' DW YE R P AUL M CL AUG HL I N I AN A. Scorr J O H N G. F I S H DANI E L E. O ' C O N N O R P E T E R M C L A U G H L I N R O B E R T B O L T O N J O H N V O ' D W Y E R R O N A N W A L S H
D O N O G H C R O W L E Y J O H N S . W A L S H M I C H A E L M E G H E N J O S E P H L E Y D E N W I L L IA M J O H N S T O N E U G E N E M C C A G U E N I C H O L A S G . M O O R E D E C L A N H A Y E S
D A V I D O ' D O N O H O E C O L M D U G G A N C A R L O ' S U L L I V A N I S AB E L F O L E Y J O H N M E A D E C O N O R M C D O N N E L L P A TR I CK M C G O V E R N G R A I N N E H E N N E S S Y S E A M U S G I V E N C O L I N B YR N E
CAROL INE DE VUN CI ARANB OL GE R GRE GO RY GL YNN DAVI D F OL E Y S T E P HE N HE GART Y DE CL AN DRI S L ANE S ARAI I CUNN I F F KAT HL E E N GARRE T T P ADRAIG 6 RI ORRAI N DR . M ARY RE DM O ND
E L I ZA B E T H B O T H W E L L W I L LI A M D A Y A N D R E W L E N N Y J O H N M E N T O N P A TR I CK O ' B R I E N O R L A O ' C O N N O R B R I A N O ' G O R M A N M A R K S A U N D E R S
CONS UL T ANT S : V I NCE N T WAL S H DE N I S J . BE RGI N CHE T W ODE HAM I L T ON NU L L M CL AUGHL I N DR. YVONNE S CANNEL L DR . ROB E RT CL ARK
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STATEMENT OF TOM CONATY
This statement is made by m e in response to the letter which I have received from theInspectors dated 31 July 2001 and to the enclosures to that letter.
I am 80 years of age and unfortunately my memory is not as clear as it once was.However, I will endeavour to deal with the relevant issues as best I can below.
I remember that in or around the mid 1970s my company, Tom Conaty Limited, was toreceive a payment of the equivalent of approximately STG£50,000 from a Frenchcustomer. This payment was being made offshore and I decided to keep this paymentoffshore and I then contacted Guinness & Mahon in Dublin as I knew that Guinness &Mahon had offshore operations in the Channel Islands. I am unable to recollect who Idealt with but I do remember that I was asked whether I would prefer the funds to be held
in the Cayman Islands or in Guernsey. I asked for the funds to be held in Guernsey as mycompany carried on business there and it was therefore much more convenient for me.To the best of my recollection, I was told that the deposit would be managed by a trustcompany owned by Guinness & Mahon called College Trustees.
The deposit was then placed with Guinness & Mahon (Guernsey) and interest accrued onthe deposit (during a time of high interest rates). As far as I was aware the money washeld for my benefit by College Trustees with Guiness & Mahon in Guernsey.
From about the late 1970s I made periodic withdrawals from this deposit. I would callinto Guinness & M ahon 's offices in Dublin and I would request a withdrawal and I wouldthen be paid in cash.
This position continued until the early 1990? when I became worried about the stabilityof Guinness & Mahon. I was aware that a Japanese bank had become involved inGuinness & Mahon and I then arranged for the deposit to be transferred to the Bank ofIreland in the Channel Islands.
Having reviewed the documents provided by the Inspectors, I do recollect that a facilitywas provided by Guinness & Mahon to Tom Conaty Limited, although I am unable torecollect any specific details in relation to this transaction. However, I do recollect that
this facility was provided on the basis that I held funds with Guinness & M ahon inGuernsey which would effectively secure the facility, although I do not recollect havingto ever execute any security documents in respect of the deposit in Guernsey.
I have never had any dealings, whether directly or indirectly with Ansbacher. I have beenadvised by my solicitors that the likely reason why the Inspectors have corresponded withme is that the monies deposited by me m ay have been placed, by College Trustees, ondeposit with Ansbacher (Cayman) Limited. If this is the case, then the transfer of thesefunds occurred without my knowledge and was contrary to my instructions as Ispecifically said that the money was to be deposited in Guernsey and not in the CaymanIslands. In fact, I had never heard of Ansbacher until that name received publicity in
recent times.
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Appendix XV (148) Mr Stephen D aly, deceased
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MrStephen Daly.
a) Transcript of evidence of Mr Stephen Daly dated 8 June 2000.
b) Statement re file C lodgements and withdrawals prepared by StephenDaly.
c) Internal Memorandum of Guinness and Mahon Limited "Memorandum ofAddition" for College Trustees Limited dated 24 January 1978.
d) Letter of 2 May 2000 from Stephen Daly to Inspectors.
e) Statement of account in College Trustees re a/c TC 431 of 17 August
1990.
f) Statement of account in College Trustees re a/c TC 431 of 26 July 1988.
g) Acknowledgement of share purchase from Guinness and Mahon of 15 July
1991.
h) Letter of 21 March 1984 from College Trustees to Stephen Daly.
i) Letter of 5 May 2000 from College Trustees to Stephen Daly.
2. Correspondence received from or on behalf of Mr Stephen Daly.
a) Letter of 14 November 2001 from Kennedy McGonagle Ballagh toInspectors.
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Appendix XV (148) (1) (a)
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PRIVATE EXAMINATION OF STEPHEN DALY
UNDER OATH
ON THURSDAY, 8TH JUNE 2000
I hereby certify the
following to be a true and
accurate transcript of my
shorthand notes in the
above named interview.
Stenographer
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PRESENT
The Inspectors: MR. ROWAN FCA
MS. MACKEY BL
Solicitor to the Inspectors MS. M. CUMMINS
Interviewee: MR. STEPHEN DALY
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1 THE HEARING COMMENCED, AS FOLLOWS, ON THURSDAY 8TH
2 JUNE 2000.
3 MS. MACKEY: Good morning, Mr. Daly.
4 I will just introduce
5 myself. I am Noreen Mackey, one of the Inspectors
6 appointed, as you know, by the High Court to
7 investigate the affairs of Ansbacher. This is
8 Mr. Paul Rowan, my colleague and one of the other
9 two Inspectors. Now this is not a Court and it is
10 not a Tribunal.
11 A. I appreciate that.
12 MS. MACKEY: It is just an inquiry and
13 this is just an interview.
14 It is, however, under oath. We do wish to take your
15 evidence under oath and we just wanted you to be
16 clear about the position here. Now if we ask you
17 any questions that you don't know the answer to or
18 you don't remember the answer to, just simply say
19 that.
20 A. I will, yes, indeed.
21 MS. MACKEY: That you don't remember or
22 you don't know and that
23 will be sufficient. I will ask our solicitor,
24 Ms. Cummins, then, to administer the oath and we can
25 begin.
26
27
28
29
3
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1 MR. STEPHEN DALY HAVING BEEN SWORN WAS EXAMINED, AS
2 FOLLOWS, BY THE INSPECTORS:
3 1 Q. MS. MACKEY: Now, Mr. Daly, we
4 received your statement
5 and the documents you sent us in. Thank you very
6 much, they were very helpful. I think this
7 interview will be a matter of just clarifying and
8 going through what you have said and getting your
9 evidence on oath about it. Maybe one or two points
10 that weren't totally clear to us, you might be able
11 to clarify those if you recollect the events in
12 question.
13 A. Right.
14 2 Q. We might also just ask you to look at some of the
15 documents you sent us and maybe one or two others
16 that we have here and ask you to explain them to us,
17 if you can. That is basically how we want to
18 proceed.
19 A. Okay.
20 3 Q. Can I just for the record have a slight little bit
21 about your background? You have told us already in
22 your statement here that you are a retired
23 schoolteacher?
24 A. Correct.
25 4 Q. So if you could fill us in a little bit about that.
26 All your life from your university days, you were a
27 schoolteacher, were you?
28 A. Correct.
29 5 Q. Was this a primary or secondary primary?
4
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1 A. Primary.
2 6 Q. Primary schoolteacher. I think you began sometime
3 in the late 1950's or early 1960's to operate
4 charter flights from Ireland?
5 A. Correct.
6 7 Q. You continued to do that contemporaneously with your
7 teaching; is that correct?
8 A. Correct.
9 8 Q. During your holidays?
10 A. Correct, it was a summer activity.
11 9 Q. Yes. Now when did you retire from teaching?
12 A. On 30th June 1988.
13 10 Q. You continued teaching all your life?
14 A. I did.
15 11 Q. Do you now run a travel business?
16 A. I do.
17 12 Q. Since your retirement, is it?
18 A. Yes, correct. It is an educational travel company.
19 13 Q. I see. And that is based where?
20 A. That is based in Rathgar in my own home. It is a
21 one-man operation still.
22 14 Q. I see. Is it more or less the same as you were
23 doing all the time?
24 A. No, the initial period from 1959 through to 1974
25 were charters. These were Boeing 707's. But then
2 6 when the jumbo jets came into existence around that
27 time, it was impossible to charter aircraft
28 otherwise. It would not be practical.
29 Consequently, one, as it were, resorted to the
5
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1 educational programmes I was running for teachers
2 based at universities in the United States from 1959
3 right through in conjunction with charters. Through
4 the United States Office of Education and the State
5 University of New York at New Paltz in New York,
6 I inaugurated a three-week seminar so as to
7 introduce Irish teachers into the latest innovations
8 in American education.
9 15 Q. I see.
10 A. So that was a period for three weeks and then
11 followed an educational itinerary that would take
12 teachers en route to Boston, Philadelphia and
13 Washington D.C.. That was more or less to expand
14 their horizons, working with the National
15 Aeronautics and Space Administration people in
16 Washington D.C. so that teachers could actually view
17 satellites being launched and obtain the latest
18 ideas of that nature.
19 16 Q. I see. Do you run that business through a company
20 now, Mr. Daly?
21 A. I do indeed.
22 17 Q. The company is called?
23 A. ITP, Irish Teacher Projects.
24 18 Q. Is that a company incorporated in Ireland?
25 A. It is.
26 19 Q. A limited company?
27 A. Correct.
28 20 Q. When was it incorporated?
29 A. In 1974.
6
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1 21 Q. So you have been running it since then?
2 A. Yes .
3 22 Q. That is fine for background, thank you very much.
4 Now getting on to what we are actually concerned
5 with here and what you have explained to us. It
6 appears from your statement and the documents that
7
8
you sent to us that you had a trust based in the
Channel Islands with Guinness & Mahon Guernsey and
9 managed by College Trustees, is that correct?
10 A. I hadn't a trust. Guinness & Mahon led me into a
11 trust situation.
12 23 Q. Okay. Maybe we will start with how the whole thing
13 began. You first contacted Guinness & Mahon about
14 depositing money when?
15 A. I would say around -- first of all, the monies were
16 with AIF or Allied Irish Finance. I think the
17 scenario there was one of the Directors of AIF said;
18 'Listen here, I think that there is going to be an
19 investigation whereby having funds in the North
20 means no protection for you, because if there is an
21 agreement between both governments...'.
22 24 Q. If I could just stop you for a moment. We are not
23 so much concerned with the funds that you had in
24 other places such as AIF?
25 A. Yes, but I am coming to the point.
26 25 Q. I know, but what I really want to find out is that
27 you at a particular point approached Guinness &
28 Mahon in Dublin?
29 A. Yes .
7
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1 26 Q. Now around what time was that? Can you remember the
2 date?
3 A. I wouldn't know exactly. I would safely say maybe
4 about 1972 or 1971.
5 27 Q. Who did you meet there?
6 A. I met a person called Martin Keane.
7 28 Q. Martin Keane. Who introduced you to Guinness &
8 Mahon?
9 A. I read the business papers and I saw that you could
10 get a very good rate of exchange from Guinness &
11 Mahon.
12 29 Q. So you went into Guinness & Mahon and you met
13 Mr. Keane. This was your first meeting with him?
14 A. It was, yes.
15 30 Q. And you explained to him that you had money in the
16 North in AIF; is that right?
17 A. No, I had already taken the money in a suitcase to
18 Guinness & Mahon.
19 31 Q. Before that?
20 A. Well, the thing was that, that I am sure that when I
21 deposited the money initially I gave it to the
22 people who counted it and that same day Martin Keane
23 appeared on the scene.
24 32 Q. So do I understand you correctly to say that without
25 any prior contact with Guinness & Mahon, you went
26 with the money in the suitcase?
27 A. Naturally, I had phoned them.
28 33 Q. That is what I want to find out, your first contact
29 with Guinness & Mahon?
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1 A. Sorry. Well, it was by phone.
2 34 Q. So you phoned them and who did you speak to on the
3 phone?
4 A. I spoke to Martin Keane.
5 35 Q. So that was your first contact with Martin Keane?
6 A. Correct, yes.
7 36 Q. Did you know to ask for Martin Keane or did you just
8 ring them and ask them who you should speak to?
9 A. To be honest, I couldn't say.
10 37 Q. You can't remember. Anyway, you spoke to Martin
11 Keane?
12 A. Yes.
13 38 Q. Did you explain to him that you had funds in the
14 North that you wished to transfer?
15 A. That is true, yes, but the funds actually were in
16 Dublin.
17 39 Q. You had already brought them down at that stage?
18 A. No, sorry. It would appear that ostensibly having
19 funds in the North of Ireland meant that they were
20 with AIF. Whatever accountancy they had with the
21 Government, they would have AIF in the North of
22 Ireland but the funds were physically in Dublin. At
23 least that is what I conjured up, because I didn't
24 take the funds initially from the North of Ireland
25 to Dublin. The funds were in Dublin with AIF or
26 Allied Irish Banks.
27 40 Q. Where had you put them initially?
28 A. They would have started with my own bank.
29 41 Q. Which was?
9
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1 A. AIB Rathgar. AIB Rathgar would have just syphoned
2 them off to their subsidiary, which is Allied Irish
3 Finance. So in effect, there was no such thing
4 as...(INTERJECTION)
5 42 Q. So in fact you withdrew them from AIF in Dublin; is
6 that right?
7 A. AIB.
8 43 Q. AIB?
9 A. Well, AIF.
10 44 Q. When you wanted to put these into Guinness & Mahon,
11 you withdraw them from AIB in cash?
12 A. Yes, in cash, because AIF wanted no trail, as they
13 stated. So there was no cheque.
14 45 Q. I see. So these were profits from the charter of
15 your...(INTERJECTION)?
16 A. Yes, may I explain those? Initially, the Civil
17 Aeronautics Board had a regulation whereby an
18 organisation or an individual chartering for an
19 organisation would have to comply with regulations
20 which are known as Affinity Charters.
21 Affinity Charters were such that ostensibly the
22 costs of the aircraft was to be pro-rated by the
23 number of passengers and giving you -- if it was an
24 unusual situation. I was supposed to pay all my
25 expenses and they were doing things for a group of
26 people, a group of teachers and obtained no
27 remuneration, as it were. Because I was not a
28 company at the time, I was an individual. Actually
29 at that time too, I think income tax was about 65%
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1 or 68%. I didn't see why I should work night, noon
2 and day and pay everything over to tax. That was
3 the culture of the time. Naturally, every bank
4 manager would say put the money up the North.
5 46 Q. So this money came to you how? You were explaining
6 that you would appear to work without remuneration
7 but you actually were remunerated?
8 A. Naturally, the passengers of the aircraft would send
9 me money so that I in turn could pay for the
10 aircraft. Naturally also, you were working with the
11 unknown because you didn't know if you were going to
12 fill the aircraft. If you didn't fill the aircraft
13 and your maths were such that you divided a mythical
14 number which would be the configuration of the
15 aircraft and divided that by the costs and say that
16 XY is the amount that you are going to pay. But
17 naturally, if you didn't fill, you just couldn't go
18 back to the people. So you always added on a sum of
19 money in case you didn't fill.
20 47 Q. So you could make a profit?
21 A. Correct, yes, indeed.
22 48 Q. So it was the profits of this that were in this fund
23 in AIF?
24 A. That is true, totally.
25 49 Q. And that was the only source of those funds; is that
26 right?
27 A. Correct, yes.
28 50 Q. So getting back to Guinness & Mahon, you decided you
29 would change this money to Guinness & Mahon and you
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1 wished to have it offshore, is that basically what
2 it was?
3 A. No, I presumed initially that it would remain in
4 Guinness & Mahon but they were stating that it would
5 appear that the Irish pound and sterling were going
6 to split and that it would be far better to have
7
8
your money designated as sterling rather than Irish
punts.
9 51 Q. This was right from the start?
10 A. This was right from the start.
11 52 Q. This is what Martin Keane told you on the first day?
12 A. That is correct. That is why he said put your money
13 over in Guernsey.
14 53 Q. Right. So this suitcase of money that you brought
15 in, you understood on Day 1 that that was going to
16 Guernsey?
17 A. Yes, indeed.
18 54 Q. Did you get any independent financial or taxation
19 advice at that time about your money and what to do
20 with it?
21 A. No. Well, I could hear rumours and talk.
22 55 Q. But did you have an accountant, a personal
23 accountant?
24 A. No.
25 56 Q. You didn't have one at all?
26 A. I didn't.
27 57Q.
Did you consult a solicitor?
28 A. I didn't, no. I knew solicitors and everything
29 else, but I mean to say, I was not going to ask them
12
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1 direct questions as to what...(INTERJECTION).
2 58 Q. So the advice all came from Guinness & Mahon, would
3 that be correct?
4 A. The advice came from Guinness & Mahon, yes, indeed,
5 yes.
6 59 Q. So on that particular day, Mr. Keane suggested to
7 you that the money be put into Guernsey?
8 A. Correct.
9 60 Q. And you agreed?
10 A. I did.
11 61 Q. Did you sign documents that day opening an account?
12 A. I am sure I did. I am sure I did.
13 62 Q. Did you keep copies of those documents?
14 A. I wouldn't have. If I did, through the passage of
15 time, they probably were...
16 63 Q. What did Mr. Keane tell you about the account you
17 were opening?
18 A. All he simply told me was: 'This sum of money at the
19 moment is in Irish pounds. If you put it in
20 Guernsey prior to the split being announced by the
21 Government, that we are going to separate from
22 sterling, then, in effect, it would be classified as
23 sterling. Therefore, your amount of money will
24 appreciate and you will be outside the Irish tax
25 net.'
26 64 Q. Yes. Did he say anything to you at that time on
27 that day about setting up a trust?
28 A. No, he did not.
29 65 Q. He did not mention a trust?
13
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1 A. No. No, no.
2 66 Q. Now that sum of money you say in your statement or
3 in the little sort of mini statement you put at the
4 beginning of File C headed "Lodgements and
5 Withdrawals", do you have a copy of that with you
6 (Exhibit 1)?
7 A. I don't, no. I gave you all the copies.
8 67 Q. Right, we will give you a copy to look at. (SAME
9 HANDED). It is page 30 of our brief. You see there
10 at Paragraph C, you talk about two very large
11 lodgements; the first one: "As stated above -
12 £120,000."
13 A. Yes.
14 68 Q. That goes back up there to Paragraph A, where you
15 say:
16
17 "Martin Keane transferred a sum in the region of£120,000 to Guinness Mahon Guernsey
18 which I brought to his bank in asuitcase around December 1977."
19
20 A. Yes.
21 69 Q. Is your evidence that that was the opening of the
22 account or the beginning of the funds?
23 A. That was the opening of the account.
24 70 Q. Yes. Now can I just ask you then to look at a
25 document entitled: "Addition to Funds." It is in
26 your File C, I think. "Memorandum of Addition."
27 Page 47. You have that, do you, Mr. Daly (Exhibit
28 2) ?
29 A. I have indeed, yes.
14
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1 71 Q. You see that that Memorandum of Addition says: "On
2 24th January 1978, the trustees accepted the
3 following property and resolved to treat the same as
4 an addition to the settled funds of the trust." And
5 the figure is £119,665.55.
6 A. Yes .
7 72 Q. That would appear to be the sterling equivalent of
8 £120,000?
9 A. Yes .
10 73 Q. Would you agree that that would appear to be the sum
11 that you are talking about?
12 A. Correct.
13 74 Q. But here it is referred to as an addition to the
14 settled trust funds, which seems to indicate that
15 there was money there already?
16 A. My impression of that, the settled funds is that
17 they had funds -- in other words, they didn't give
18 me the impression that they were isolating me as an
19 individual but they had already funds there from
20 other sources.
21 75 Q. That is your understanding?
22 A. That is my understanding of it.
23 76 Q. But your own understanding is that these were the
24 first funds that you held?
25 A. Correct, they were my first funds, yes.
26 77 Q. Okay. Thank you very much. Now going back then to
27 your statement, do we have the first statement
28 (Exhibit 3)itself to have a look at? (SAME HANDED)
29 If you would turn to page 2 of your statement there,
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1
2
3
4
Mr. Daly, the third paragraph down:
2
3
4
"In 1977/1978, an official of Guinness Mahon Bank,Mr. Martin Keane, told me of animpending split."
5 Do you see that?
6 A. Yes .
7
8
78 Q. Now that is the conversation you have just described
to us so that was the beginning of this deposit?
9 A. Yes, that is true.
10 79 Q. You then say in the next paragraph:
11
12
13
"Since I was never in Guernsey, I later went thereout of curiosity."
14 How much later was that?
15 A. I asked myself that question and I could not say.
16 80 Q. Can you recollect whether it was a very long time
17 afterwards or probably within the same year or a few
18 months ?
19 A. It would appear to me that I was concerned where the
20 hell these monies were and I would say that it could
21 easily have been within six months or a year.
22 81 Q. Yes, it might have been some relatively short time.
23 A. Yes .
24 82 Q. There, you were told to contact a Mr. John
25 Lipscombe, who told you that the funds were acquired
26 by College Trustees, of which he was the Director,
27 and you were annoyed about this because you had not
28 known this?
29 A. I had never been informed.
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1 83 Q. Yes. So that was the first you learned that College
2 Trustees were looking after your funds?
3 A. Correct.
4 84 Q. You then go on to say in the next paragraph:
5
6 "I was told that this was in my own interest."
7 Now by that, do you mean that it was in your own
8 interest that College Trustees was looking after the
9 funds, is that what they told you?
10 A. It would appear when that was stated to me, it was
11 that 'the monies are no longer in your own name.'
12 85 Q. Now that is what I am coming to. Did Mr. Lipscombe
13 say that to you?
14 A. He did.
15 86 Q. Whose name did he say they were in?
16 A. They were in College Trustees'.
17 87 Q. They were in the name of College Trustees?
18 A. Correct, yes.
19 88 Q. Not just being managed by them but in their name?
20 A. No, no, in their name.
21 89 Q. Right. You then go on to say: "I was asked to fill
22 out a letter of wishes."
23 A. Correct.
24 90 Q. Now what did he say to you about that? When he
25 produced that letter of wishes to you, what did he
26 say that was?
27 A. If I died, who was I going to give the money to?
28 And I just thought of my own relatives.
29 91 Q. Did he say to you at that stage that this was a
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1 trust?
2 A. He did.
3 92 Q. He did tell you?
4 A. He did, yes.
5 93 Q. I see. So at that point, at that meeting with
6 Mr. Lipscombe, you learned that your money was
7 actually in trust?
8 A. Correct.
9 94 Q. But you had not known that up to that point?
10 A. No.
11 95 Q. Did he tell you what the name of the trust was?
12 A. College Trustees.
13 96 Q. College Trustees were the trustees of the trust,
14 actually.
15 A. I beg your pardon. But that was the only name that
16 ever stuck in my mind.
17 97 Q. Very good. So he told you that in fact your monies
18 were in trust and that College Trusties were looking
19 after it?
20 A. Correct, yes.
21 98 Q. And that was it, it was no longer in your own name?
22 A. That is true.
23 99 Q. And then you wrote a letter of wishes?
24 A. That is true.
25 100 Q. Did you agree to all of this then when he told you?
26 A. I could see the logic of it from a technical tax
27 point of view that I was not going to have Stephen
28 Daly with all these funds, that I was going to have
29 this mechanism, and I looked upon it purely as a
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1 mechanism, whereby College Trustees would be
2 responsible and, as it were, own the monies. But
3 through the letter of wishes, that should anything
4 happen to me my funds would be distributed to those
5 I had put on the letter of wishes.
6 101 Q. Did he show you on that occasion a trust deed?
7 A. No. If he did, all I did was just sign whatever
8 document he asked me to sign.
9 102 Q. Did he explain to you what a trust was or did you
10 understand what a trust was?
11 A. In my own layman manner, I presumed a trust was a
12 legal document or a legal instrument whereby my
13 monies would be protected by the law of what they
14 were trying to inform me about it.
15 103 Q. Did he explain to you that in order to create a
16 trust, someone had to transfer the funds to trustees
17 who then looked after it legally? In other words,
18 that you would have to transfer your funds to
19 trustees lawfully and legally? Did they explain
20 that to you?
21 A. To be quite honest, I wasn't transferring the funds.
22 I didn't know what had happened to the funds but
23 Guinness & Mahon had transferred funds. This is
24 what annoyed me, that Martin Keane never told me
25 that on the funds reaching the shores of Guernsey,
26 they were going to go into a trust. But because
27 I was quite concerned myself, I just wanted to find
28 out was there a bank, a physical building and what
29 kind of a set-up was it. I simply happened to meet
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1 John Lipscombe.
2 104 Q. Did you not ask Mr. Keane for these details before
3 you went over?
4 A. No. As far as I was concerned, I was giving my
5 monies into the hands of Guinness & Mahon who had a
6 branch in Guernsey.
7 105 Q. But as you just said now, you were concerned a bit
8 about it and wondering was this a bank?
9 A. Naturally. Well, I suppose that word "concern" has
10 to be tinged with the fact that I had never been to
11 Guernsey before and that, okay, I had some holiday
12 and I went over just on a day basis. So the concern
13 is not...
14 106 Q. In any event, Mr. Keane did not tell you, you are
15 quite clear about that, that the money was in trust?
16 A. Very clear.
17 107 Q. And the first that you learned of it was from
18 Mr. Lipscombe?
19 A. Correct.
20 108 Q. Was it Mr. Lipscombe who told you that the number of
21 your account was "TC431"?
22 A. I doubt if that registered with me.
23 109 Q. You have that in your statement (Exhibit 3), in that
24 paragraph?
25 A. What paragraph was it?
26 110 Q. The fifth paragraph down on page 2, the last
27 sentence.
28 A. My number was "TC431". But that is now like
2 9 somebody now being branded with a number on his
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1 wrist.
2 111 Q. What I am asking you is did Mr. Lipscombe give you
3 that number?
4 A. No, he didn't.
5 112 Q. So when did you learn that that was your number?
6 A. I think when I forced Mr. Lipscombe to tell me what
7 he was doing with my monies.
8 113 Q. On that day?
9 A. No, not on that day. You will recall a 1984
10 document there when I went over and I asked
11 Mr. Lipscombe and he said that they were with
12 Rothschild.
13 114 Q. Yes, you referred to that in your statement.
14 A. I presume that it was at that stage I might have
15 learned the number of TC431.
16 115 Q. I see. Now does the name Creebridge Investments
17 mean anything to you, Mr. Daly?
18 A. Sorry.
19 116 Q. Creebridge Investments?
20 A. Never heard of it.
21 117 Q. You never heard of Creebridge Investments?
22 A. No.
23 118 Q. If we can look again at your File C there, your
24 document "lodgements and withdrawals" (Exhibit 1),
25 you refer there at Paragraph D to a withdrawal of
26 £10,000 cash from Guinness & Mahon Dublin on 2nd
27 August 1990?
28 A. Yes.
29 119 Q. "A Mr. Murray or a Mr. Farrelly of Guinness & Mahon
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1 Dublin facilitated me in this regard."
2 A. Yes .
3 120 Q. Can you tell me how that came about, that you
4 withdrew money from Guinness & Mahon?
5 A. I called up Guinness & Mahon and I asked them could
6 I have £10,000 of my own money and could they get it
7 for me.
8 121 Q. So you were talking about the money that was in
9 Guernsey?
10 A. I was, yes.
11 122 Q. But why would you ring Guinness & Mahon in Dublin
12 about that?
13 A. The thing is this, they were the parent body and
14 they had direct contact with Guinness & Mahon in
15 Guernsey.
16 123 Q. In relation to your account?
17 A. Correct.
18 124 Q. Had you had contact with them before in relation to
19 your account?
20 A. With regard to -- well, I believe that College
21 Trustees and Guinness & Mahon were one and the same
22 operation.
23 125 Q. I am more concerned to know what actually happened
24 or what you were actually told than with your
25 interpretation of the events at the moment. But
26 what I am really concerned to find out here is why
27 did you believe you could ring up Guinness & Mahon
28 in order to withdraw money that you had in Guernsey?
29 Had anyone in Guinness & Mahon given you to
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1 understand that you could do that?
2 A. I am sure I felt myself that I could justify my
3 demand.
4 126 Q. But had anyone in Guinness & Mahon told you this?
5 A. No.
6 127 Q. They hadn't?
7 A. They hadn't, no.
8 128 Q. And had you ever done it before?
9 A. No, this was my first withdrawal.
10 129 Q. Your first withdrawal at all from the accounts?
11 A. At all from the accounts.
12 130 Q. So you rang up Guinness & Mahon. Mr. Martin Keane,
13 was it?
14 A. No, Martin Keane was either not in my mind at the
15 time but I did know that there was a Mr. Farrelly
16 there, through relations of mine that their son was
17 in Guinness & Mahon. So I called up Brian Farrelly,
18 so far as I recall. I said; 'Brian, could you
19 engineer this for me?'.
20 131 Q. Did you tell him what you were talking about, your
21 particular account?
22 A. Yes, he knew all about it.
23 132 Q. Did you tell him it was a trust?
24 A. Well, he knew that too.
25 133 Q. How did he know?
26 A. The point is this; as far as I am concerned, and
27 this is a presumption on my part, that anybody with
28 monies that initially originated from Guinness &
29 Mahon to Guinness Mahon Guernsey to College Trustees
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1 were quite well aware of the line of communication.
2 134 Q. Right. This Mr. Farrelly, was he concerned -- I
3 mean, I presume not everybody in Guinness & Mahon
4 would know your personal affairs over in Guernsey so
5 was he a person who was dealing with the Guernsey
6 branch?
7
8
A. No, but I asked him could he find out could it be
done.
9 135 Q. But you said that he knew all about it anyway?
10 A. He knew all about it when I finished talking to him.
11 136 Q. He only knew about it because you told him?
12 A. That is true.
13 137 Q. That was my first question. Did you explain to him
14 that you had a trust in Guernsey?
15 A. I did, yes.
16 138 Q. Up to that, he didn't know anything about it?
17 A. I don't know, I don't know.
18 139 Q. You told him that you had monies in trust and that
19 your account number was "TC431", did you?
20 A. I didn't. I wouldn't have told him that.
21 140 Q. So how would he know?
22 A. I am quite certain that all he would have to do was
23 ring up Guinness & Mahon in Guernsey and then that
24 particular request would be forwarded on to a person
25 called Brian Ellis. He was the person when Mr.
26 Lipscombe retired.
27 141Q.
Did you explain to Mr. Farrelly that this money was
28 not in your own name over there? How would he know
29 to refer to it?
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1 A. That is a very good question. I don't know.
2 142 Q. So what exactly did you ask him when you rang up?
3 A. Could I have a loan of £10,000.
4 143 Q. A loan?
5 A. Well, he would know it wasn't a loan. But in other
6 words, I am sure I would have asked him, as I think
7
8
I was going to invest it in the Stock Exchange,
either Irish Life, they were all coming on-stream at
9 the time. And that is all I can say. You are
10 talking about what year? 1990, isn't it?
11 144 Q. Yes, 1990. But I am just wondering why you would
12 have asked him if you could have a loan. You were
13 talking about your own money?
14 A. I was talking about my own money, yes.
15 145 Q. Why would you put it that way?
16 A. I suppose a loan of your own money.
17 146 Q. One wouldn't get it, would they? You wished to use
18 some of your money that was in Guernsey?
19 A. Correct.
20 147 Q. And you believed that Guinness & Mahon in Dublin
21 would be able to organise that for you?
22 A. Yes .
23 148 Q. So nevertheless what you did was you rang up
24 Guinness & Mahon, a Mr. Farrelly, and you asked if
25 you could have a loan of £10,000, is that right?
26 A. Yes. Well, I am sure I didn't use those exact
27 words, but could he arrange to have £10,000 of my
28 money. Again, I may not have been as explicit as
29 that. If you wish to interpret, what I am trying to
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1 say is could I get £10,000 from Guernsey and they
2 knew what that would mean.
3 149 Q. Yes. Now a long time had passed since you first
4 went in to Mr. Keane with the suitcase?
5 A. Yes .
6 150 Q. Had you any contact with Guinness & Mahon in Dublin
7
8 A.
in the meantime?
I am sure I had.
9 151 Q. In relation to your account in Guernsey or in
10 relation to something else?
11 A. In relation to my account in Guernsey.
12 152 Q. Right. So you would have been dealing through
13 Guinness & Mahon in Dublin in relation to your
14 account in Guernsey?
15 A. Correct. Yes, indeed.
16 153 Q. What dealings would you have had in relation to it?
17 A. I know that since John Lipscombe stated that he had
18 the funds with Rothschild and that they were
19 engaging in exchange, I was quite certain that I
20 wondered what on earth was the state of play with my
21 money, what form was it in and they would tell me.
22 154 Q. Guinness & Mahon would?
23 A. Correct.
24 155 Q. Was your money in different currencies?
25 A. It was, placed by College Trustees through
26 Rothschild.
27 156Q.
Right. On whose advice had you put it into
28 different currencies?
29 A. I didn't put it in.
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1 157 Q. You didn't ask to have it put in?
2 A. It would be Brian Ellis that would be managing that.
3 158 Q. But would he have put it into different currencies
4 on your instructions?
5 A. Not necessarily on my instructions.
6 159 Q. Then whose?
7 A. I am sure that if he wanted to maximise whatever
8 monies that he was managing, they were the trustees,
9 they were the managers. My connection with him was
10 he would call me and state; 'You owe us and we have
11 deducted from your account our fees and your money
12 is either in sterling or it is in Deutsch marks or
13 it is in dollars.'
14 160 Q. And you would be happy with that?
15 A. I would be happy with that.
16 161 Q. But he would tell you on each occasion which it was
17 in?
18 A. He would, yes.
19 162 Q. Were you aware -- well, you are now because you sent
20 us copies of the statements -- that you had a dollar
21 account, a Deutsch mark account...(INTERJECTION)
22 A. Yes, indeed. But I didn't have exact sums.
23 163 Q. Yes. Now the money that you withdrew on 2nd August
24 1990, you say that that is £10,000 cash?
25 A. Yes.
26 164 Q. Could it have been 10,000 Deutch marks?
27 A. No. Well, if it were 10,000 Deutch marks, certainly
28 I didn't get it in Deutch marks.
29 165 Q. Right. Can I ask you to look at page 90 of our
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1 brief, which is a Guinness & Mahon statement. This
2 is a statement issued by Guinness & Mahon in Dublin.
3 As you can see there, the date on it -- do we have
4 the date on it (Exhibit 4)?
5 A. 2nd August 1990.
6 166 Q. That is right. The cash withdrawn: 10,000.
7
8
That equates with the date and it equates with the
amount. But over on the left-hand side of that, you
9 can see the word Deutsch marks: "External Call D/A,"
10 which is deposit account, "Deutsch marks." Do you
11 see that there?
12 A. Yes, indeed, I see Deutsch marks.
13 167 Q. So this is a Deutsch mark account?
14 A. I don't know whether it is a Deutsch mark account.
15 168 Q. It is stated to be a Deutsch mark account. If you
16 see up at the top there where the heading is:
17 "College Trustees." Do you see that?
18 A. Yes .
19 169 Q. Over to the right of that, you have College Trustees
20 again and then you have "re account TC431."
21 A. Yes .
22 170 Q. So that refers to your account?
23 A. Correct, yes, it does.
24 171 Q. But it is an account then in the name of College
25 Trustees re "TC431" held in Guinness & Mahon in
26 Dublin in Deutsch marks from which 10,000 Deutsch
27 marks were withdrawn on 10th August 1990?
28 A. Yes. I have presumed that that was punts.
29 172 Q. Did you get it in cash or in a draft or what way was
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1 it?
2 A. As far as I know, I got it in cash.
3 173 Q. So perhaps it was taken out of a Deutsch mark
4 account but turned into Irish currency for you?
5 A. More than likely, yes, indeed.
6 174 Q. Which would mean that it wasn't exactly £10,000,
7
8 A.
could that have been possible?
I wondered why and I thought it was punts and that
9 it was being used to purchase some of the shares
10 that was floating at the time.
11 175 Q. I see. Were you aware that you had a Deutsch mark
12 account in the name of College Trustees in Guinness
13 & Mahon in Dublin?
14 A. Yes, I did indeed.
15 176 Q. In Guinness & Mahon in Dublin?
16 A. The thing is this; I am not an accountant and the
17 monies I thought all along were in Guernsey but then
18 they could be in Dublin.
19 177 Q. When you say that they could be in Dublin, did you
20 know they were in Dublin or that any of your money
21 was in Dublin?
22 A. I presumed that this interlinkage between Guernsey
23 and Dublin, that as far as I could see, the monies
24 could be in either Guernsey or Dublin. They were
25 just writing bits of paper.
26 178 Q. Yes, I see. Very well. Anyway, we have established
27 now that your money was in a trust managed by
28 College Trustees in the Channel Islands in Guernsey
29 as far as you knew at the time?
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1 A. Yes.
2 179 Q. Now can I ask you to look at another statement from
3 Guinness & Mahon in Dublin. This is page 59
4 (Exhibit 5) (SAME HANDED TO THE WITNESS). Now this
5 is an earlier one in the same series that we just
6 saw the withdrawal from there. This time, it is
7 headed: "Guinness Mahon Cayman Trust/College." Do
8 you see that?
9 A. I do.
10 180 Q. Up at the top again on the right: "Guinness Mahon
11 Cayman Trust/College re account TC431."
12 A. Right, okay.
13 181 Q. What this is, I will just explain it to you, this is
14 an account held in Guinness & Mahon in Dublin in the
15 name of Guinness Mahon Cayman Trust, which was a
16 former name of Ansbacher?
17 A. Yes.
18 182 Q. Ansbacher originally was called Guinness Mahon
19 Cayman Trust?
20 A. Yes.
21 183 Q. With the reference "College" and I do not know if
22 you are aware from the media or aware from your own
23 knowledge that around 1981, College Trustees placed
24 some of the funds that it held on behalf of Irish
25 residents in an account in Guinness Mahon in Dublin
26 called Guinness Mahon Cayman Trust. In other words,
27 then invested them in Ansbacher?
28 A. Yes.
29 184 Q. That account was called Guinness & Mahon Cayman
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1 Trust/College Trustees?
2 A. Yes .
3 185 Q. That is what this is and it has an individual
4 reference to your particular account so that your
5 particular funds can be identified?
6 A. It has, yes.
7
8
186 Q. So this is the link between College Trustees and our
investigations, as far as you are concerned?
9 A. I know, yes.
10 187 Q. I just wanted to point out to you why we are looking
11 at your affairs at all.
12 A. May I say that I had often heard of the word
13 "Ansbacher" through the press in relation to so many
14 different people and I was quite content that my
15 particular funds were in Guernsey. Then to my
16 horror, I said 'I am linked', but I didn't know how.
17 188 Q. Yes. This is how. It was College Trustees placing
18 funds on deposit. But I accept that this may have
19 been done without your knowledge.
20 A. Certainly.
21 189 Q. But on the face of this document, would you agree
22 that this relates to your funds?
23 A. It does indeed.
24 190 Q. You are "TC431"?
25 A. I am indeed, yes.
26 191 Q. And this is your Deutsch mark funds here?
27 A. Yes .
28 192 Q. Held, as it happens, in this account of Ansbacher in
29 Guinness & Mahon?
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1 A. Correct. At the very beginning when I stated that I
2 was shocked and surprised and a bit annoyed that I
3 had never been told by Martin Keane about these
4 College Trustees and that there was a fait accompli,
5 that they had my funds and I did not authorise nor
6 did I know.
7 193 Q. I understand, yes. Just to finalise the whole
8 picture then, you have told us in your statement and
9 you have provided us with documents, very kindly,
10 that you settled up your affairs with the Revenue in
11 1994?
12 A. I did, yes.
13 194 Q. But is it the case, and we have to ask this for the
14 record, that up to that date you had not in fact
15 disclosed to the Revenue or you were not disclosing
16 at the time?
17 A. None whatsoever.
18 195 Q. Not alone the interest accruing on these accounts
19 but the monies that you had lodged to them?
20 A. Correct, yes, that is true.
21 196 Q. But then you sorted all of that out?
22 A. I did, yes.
23 197 Q. Now I think we will just take a 10-minute break and
24 you can have a cup of tea or coffee there. Then we
25 will come back and continue, we may not be much
26 longer. Thank you, Mr. Daly.
27? R
A. Okay.
z, o
29 SHORT ADJOURNMENT
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1 MS. MACKEY: Now, Mr. Daly, we just
2 have really one or two
3 more questions which Mr. Rowan would like to ask
4 you. I don't think we will be needing to keep you
5 much longer.
6 198 Q. MR. ROWAN: Mr. Daly, in your
7 statement (Exhibit 3) to
8 us on page 2 of your letter, at the top in the
9 second paragraph, you say:
10
11 "The monies from my trans-Atlantic operation
profits to the United States were12 placed on deposit with Guinness & Mahon
on a rollover basis and were only used
13 by me as stated on the document in FileC marked "withdrawals" on specified
14 dates as per my dairy."
15 A. Yes.
16 199 Q. So you have diary records of these matters?
17 A. No, I have not. I have a personal diary and if per
18 chance I note something special, I would put it in
19 it. I just happened to go back on an old bunch of
20 diaries I had and I was happy to see that in
21 endeavouring to answer all your questions, I just
22 flicked through my personal diaries and I saw that
23 on 2nd August I had withdrawn a sum of £10,000, I
24 put down £10,000.
25 200 Q. I mean, a diary is a contemporaneous record, I
26 suppose, is it not?
27 A. It is indeed, provided it deals with -- well, it was
28 dealing with my personal life because I had no need
29 to be concerned with the in and out of monies which
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1 were not taking place.
2 201 Q. In terms of keeping or maintaining a contemporaneous
3 record, I put it in an extravagant sort of way, but
4 if you had withdrawn £10,000, or 10,000 punts,
5 I think you said, you wouldn't have written down
6 10,000 punts if you had withdrawn 10,000 Deutsch
7 mark?
8 A. That is a good point. To be honest with you,
9 I cannot answer it. I do know that I spotted in
10 leafing through the various pages that I had
11 withdrawn 10,000. I presume that it was 10,000
12 punts.
13 202 Q. Can I ask you then as a way of clarifying this
14 because I suppose there is a way of clarifying it,
15 you wanted to buy into some equity stocks?
16 A. I would presume so.
17 203 Q. I think I am right in saying that you asked Guinness
18 & Mahon to acquire those on your behalf?
19 A. Correct.
20 204 Q. So that you would have given that money to Guinness
21 & Mahon?
22 A. I did not give them the money. As far as I can
23 recall, I asked them to use the monies that I knew
24 they could get access to for the purchase.
25 205 Q. So effectively, by saying to them; 'Go to my deposit
26 and get the money out to buy the shares with.', that
27 would effectively have been a withdrawal as well,
28 wouldn't it?
29 A. That is true.
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1 206 Q. When was that?
2 A. 2nd August. That is the one you are referring to,
3 is it not? 10,000?
4 207 Q. I am just a little confused, which is what I am
5 trying to clarify, of course, is that earlier in
6 your interview we thought we were dealing with a
7
8
confusion in August of you withdrawing 10,000 punts
when the record we had showed 10,000 Deutsch marks.
9 Are you saying that those are different issues?
10 A. To be honest with you, I am not sure because I never
11 asked Guinness & Mahon what precisely is the state
12 of the amount of money; are they in Deutsch marks,
13 sterling, whatever. So all I can tell you is that
14 on leafing through my diary, I saw a withdrawal of
15 10,000 punts, or which I thought were punts, I am
16 sure. This is 10 years ago.
17 208 Q. Yes, of course.
18 A. Consequently, I cannot be specific other than the
19 fact that, to the best of my knowledge, I withdrew
20 £10,000.
21 209 Q. Maybe we will just clarify what you had said to us
22 earlier, that the £10,000 punts, I think you said
23 you got in cash?
24 A. As far as I can recall, yes.
25 210 Q. You said that you thought you got it in cash?
26 A. Yes, yes.
27 211Q.
So that that money was not used for your
28 investments ?
29 A. No, it would not be used, no.
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1 212 Q. It was used for some other purpose?
2 A. Yes, and I am trying to establish the purpose.
3 In fact, when I quizzed myself as to what was this
4 10,000 used for, I initially thought could it have
5 been for the acquisition of shares in Irish Life or
6 Greencore or whatever else, stocks that were
7 available at the time. But I do know it was the
8 only time that I ever used what I thought were
9 personal monies.
10 213 Q. But I think just so that we don't end up being
11 confused and in order to clarify things, you don't
12 believe that the 10,000 punts which you believe you
13 got in cash from Guinness & Mahon, you don't believe
14 that that was used for acquiring equity stocks?
15 A. I think you are quite right, that if I per chance
16 got £10,000 in notes or whatever, that it would
17 certainly not have been used for the acquisition of
18 stocks and shares.
19 214 Q. Alright. In the alternative, you did say a few
20 minutes ago that you believed that the money which
21 was used by Guinness & Mahon to acquire equity
22 stocks on your behalf was money which you believed
23 they were able to get out of your deposit account?
24 A. Yes.
25 215 Q. Can you remember broadly, Mr. Daly, what value of
26 stocks you instructed them to buy and what were
27 those stocks?
28 A. I know that one was Irish Life, I think. In fact,
29 I did enclose two documents relating to the
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1 acquisition.
2 216 Q. There was a reference to Irish Life shares and there
3 was also a reference to Greencore shares?
4 A. That is right, yes.
5 217 Q. Were there others?
6 A. That they had purchased on my behalf?
7 218 Q. That you instructed them to purchase.
8 A. There may have been. You are talking a span of
9 35 years, nearly.
10 219 Q. No, I thought we were talking about 1992 otherwise?
11 A. Oh certainly not, that is the definite answer to
12 those. It could have been a share called Cable &
13 Wireless, but I presume that was done in the 1980's.
14 220 Q. At page 50, (SAME HANDED) This, Mr. Daly, is a
15 Guinness & Mahon contract note showing that on
16 15th July 1991, they purchased on your behalf 5,000
17 Irish Life shares (Exhibit 6)?
18 A. That is right.
19 221 Q. This further document is a letter on Guinness &
20 Mahon stationery dated 21st June 1991 showing that
21 they enclosed a share certificate for 1,000 shares
22 in Greencore (Exhibit 7)?
23 A. That is right. I supplied that letter myself.
24 222 Q. Yes, of course. So that was in 1991 that those
25 shares were being purchased?
26 A. Yes .
27 223Q.
The impression that you gave us earlier was that the
28 cost of those acquisitions would have been
29 effectively money taken from your deposit account?
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1 A. That is quite true.
2 224 Q. Can you remember now whether there were any other
3 share purchases around that time?
4 A. As far as I can gather, no. But then again, it
5 would all depend on what -- the big features, Irish
6 Life was one, Greencore. There may have been one in
7 the 80's which is known as Cable & Wireless.
8 225 Q. Would Guinness & Mahon also have acted for you in
9 that case?
10 A. Oh, they would have.
11 226 Q. Following this interview, would you please ask
12 Guinness & Mahon to provide you with full details of
13 any investments that they acquired or disposed of on
14 your behalf during the period that we have been
15 considering?
16 A. Certainly. I have already asked them.
17 227 Q. Was it a fact the funds for share acquisitions came
18 out of your trust account?
19 A. Certainly. May I state that I have already written
20 to them because they had sent me a letter earlier to
21 the effect that they were in negotiations with
22 Revenue or with yourselves and consequently that
23 should I require any documentation to write to them.
24 On the foot of that letter, I enclosed that very
25 same letter and I asked them; 'Now I need
26 documentation', because I am being interviewed by
27 you people. Excuse the language there. But the
28 fact of the matter was that I didn't hear from them.
29 228 Q. Okay.
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1 A. I got a letter stating that because there was an
2 invasion into their offices by Revenue going back
3 over inumerable years that they were unable to help
4 me.
5 229 Q. I am sure you can well imagine that there may have
6 been one or two other people requesting information
7 from them and I think that what may be the case is
8 that sometimes one has to be a bit specific as to
9 what one wants, therefore directing them to look in
10 a particular place. So it may well be that you are
11 going to have be a bit more specific with them as to
12 what information you want?
13 A. What I wanted was all statements that they could
14 give me regarding my account or my affairs.
15 230 Q. Yes. It may be that if you ask them specifically
16 about investments that they will go to a different
17 part of their organisation and ask that department?
18 A. Yes, indeed, quite true, but I can tell you
19 specifically so far as I was concerned there was
20 only one other share way back in the 80's and that
21 was Cable & Wireless. The other two are Greencore,
22 as here, with Irish Life.
23 231 Q. Thank you. When Ms. Mackey was asking you about
24 your initial contact with Guinness & Mahon, you
25 indicated that you had observed from the Press that
26 they were in the business of offering attractive
27 rates and that was what caused you to make contact
28 with them in the first place. Early on in your
29 interview today, something of that sort you
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1 explained?
2 A. Yes .
3 232 Q. And that you made contact with a Mr. Martin Keane?
4 A. Correct.
5 233 Q. Looking back at the notes that I made of your answer
6 to Ms. Mackey, you said that you made your first
7
8
approach to Guinness & Mahon around 1972, possibly
1971?
9 A. May I claim that memory here is conjecture on my
10 part, but I do know that the train of thought
11 running through my mind was why on earth should
12 I have to take cash from Allied Irish Banks? As far
13 as I was concerned, the answer I was given was 'we
14 want to get rid of your funds and we don't want to
15 leave any trace or money trail. Take the money in a
16 case.' And that is what I did because it was told
17 to me that there is going to be total disclosure of
18 people having funds in the North of Ireland. So
19 that probably was the reason why I took the money in
20 the...
21 234 Q. Yes, I appreciate the general point you are making.
22 What I was trying to be a little clear about was
23 that the impression that I gained listening to your
24 answers was that you first made contact with
25 Guinness & Mahon in the early 70's?
26 A. I think so. There is a blank. But the document
27 that I did receive, that I did hold onto, was the
28 College Trustees whereby they had an instrument.
29 You know, I think it is from 1978.
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1 235 Q. Yes .
2 A. But as far as I was concerned, monies that
3 I probably was still gaining was in the hands of
4 AIF.
5 236 Q. Yes. I was going to say that you may recall the
6 document on page 47, (Exhibit 2) this document which
7
8 A.
was headed up: "Memorandum of Addition."
Yes .
9 237 Q. Do you remember that?
10 A. That is right, yes, indeed.
11 238 Q. When we were asking you about that document (Exhibit
12 2) which you provided to us, the handwritten sum
13 £119,665.55, you indicated that that was the first
14 lodgement that you made to Guinness & Mahon and you
15 will see that that is dated 1978?
16 A. Yes, indeed. May I say that this is the first
17 document that I could prove to myself that I had
18 funds, that I gave them funds. I can't for the life
19 of me see... "Resolve to treat the same as an
20 addition to the settled funds of the trust".
21 239 Q. Yes, I think the point which I am sure you can
22 appreciate, is that you said in answer to the
23 general question when did you first make contact
24 with them, you said 1971/1972. This is 1978. There
25 is quite a span of years there.
26 A. I am not saying that my recollection is quite
27 precise and exact, that there was money lodged in
28 1971/1972.
29 240 Q. Would your personal diary have thrown some light on
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1 the thing? For instance, presumably you would have
2 written in your diary that you had an appointment
3 with Martin Keane on 24th January 1978. Do you
4 write appointment details in your diary?
5 A. I do now. I do now since... The company was
6 inaugurated in 1973 or 1974 but amongst a whole
7 plethora of...(INTERJECTION)
8 241 Q. This is your present company?
9 A. Yes. But I think myself the diaries I held from say
10 the 1970's would be a plethora of school children's
11 remarks, things I would have to do regarding
12 exercises and I don't believe I was ever writing my
13 diary as something which was important to me unless
14 regarding the 10,000 on August 2nd, that sticks out
15 like a sore thumb.
16 242 Q. Equally, of course, if you were going to deposit
17 £120,000 odd, that might have just found an entry in
18 your diary as well?
19 A. It certainly did because there is a rather amusing
20 story about the second time that I went up the North
21 and I had all the money stuck in a big bag and
22 unfortunately I was hungry and went into a hotel and
23 carrying a bag underneath a table in a hotel, it was
24 afterwards that I suddenly realised the significance
25 of such a stupid thing. But I can recall quite
26 vividly that day going up to Newry and depositing
27 the money in the Bank of Ireland up there.
28 243 Q. What I would like you to do for us, if you would,
29 Mr. Daly, I would like you to please look back in
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1 your diary and see if your diaries throw any light
2 on when you might first have made contact with
3 Guinness & Mahon. Was it in the early 70's or was
4 it in fact not until 1978? I would like to you do
5 that, if you would, please.
6 A. Certainly, yes.
7
8
244 Q. I would like you also to make contact with AIB and
see if they can look back in their banking records
9 to establish when in fact the transactions with
10 Allied Irish Finance stopped, whether in fact it was
11 in 1978 or earlier?
12 A. I certainly shall. May I take a note of these?
13 245 Q. Yes. Ms. Cummins will remind you about these things
14 that we have asked you to do at the end of this.
15 We may follow that up with a letter to you about
16 them.
17 A. Right.
18 246 Q. Mr. Daly, just turning to File C of your document
19 (Exhibit 1) that is the "lodgements and
20 withdrawals", at point (c) we have discussed the
21 Allied Irish Finance monies. Then you say the
22 second lodgement, large lodgement was one of
23 £128,234.96?
24 A. Yes .
25 247 Q. This was from the Bank of Ireland?
26 A. Correct.
27 248Q.
We haven't discussed that account. So you had a
28 second account in the Bank of Ireland?
29 A. No. The monies came from AIF in two bulks.
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1 The first one, I have told you, that I brought down
2 to Guinness & Mahon. The second one I brought
3 across the border. So the second one where it is
4 very specific because it gives the exact amount as
5 counted by Bank of Ireland and I think I did enclose
6 a document to that effect whereby when the monies
7 were being transferred to the Isle of Man -- I think
8 it is there.
9 MS. MACKEY: Yes, we have that.
10 24 9 Q. MR. ROWAN: So the second large
11 lodgement was also money
12 which started off in Allied Irish Finance?
13 A. Correct.
14 250 Q. And you took it to Newry, the Bank of Ireland, and
15 they transmitted it on?
16 A. Correct.
17 251 Q. That was on 8th February 1983, according to the Bank
18 of Ireland statement?
19 A. That is right, yes, that is correct.
20 252 Q. Thank you. On page 45, this is a letter from
21 College Trustees of 21st March 1984 (Exhibit 8)?
22 A. Yes.
23 253 Q. It refers to College Trustees account "TC431"
24 holding participating redeemable preference shares
25 of US 1 cent each in a company called Old Court
26 International Reserves Limited?
27 A. Yes.
28 254 Q. So that would have been another investment which was
29 made on your behalf?
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1 A. Correct.
2 255 Q. Was the decision to invest in Old Court
3 International Reserves Limited a decision of yours
4 or a decision of the trustees?
5 A. A decision of the trustees because I found that
6 initially the money was lying in a city account
7 earning nothing or a very small interest rate and I
8 had lost control of the money and I was quite
9 annoyed and very angry that they were actually
10 sitting on my monies and it wasn't working properly.
11 256 Q. Alright. So you asked them to do something about
12 it?
13 A. I did, yes.
14 257 Q. And they came back to you and said; 'Here is a
15 proposal.'?
16 A. They came back to me after I had made my particular
17 criticism of them and they said; 'Well, here it is.'
18 It wasn't in this letter form but I said; 'Listen, I
19 need it in a letter form.'
20 258 Q. Then they proposed to invest a further 425,750
21 Deutsch marks in those redeemable preference shares,
22 according to the third paragraph. I think that is
23 what that says, is it not?
24 A. Yes.
25 259 Q. So that they put quite a large sum of your money in
26 those shares?
27 A. It would appear so, not on an instruction from me.
28 260 Q. I think you said that from time to time they charged
29 you fees?
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1 A. Every year.
2 261 Q. Every year?
3 A. Yes. As far as I was concerned, if I may make a
4 statement, that Guinness & Mahon when I recollected
5 and when I just looked back on the whole thing, they
6 were able to prey on the fears of Irish investors by
7 getting the funding into Guernsey in order to allay
8 any Irish investor that these monies would be
9 declared for Irish income tax, they had this trust
10 and consequently they were able to build an enormous
11 trust, I do not know how many people were investing
12 with them or had monies with them, but at least it
13 was a sure-fire way of keeping the monies under one
14 roof. That is my little observation on it.
15 262 Q. Did you form any impression of the effectiveness of
16 their advice to you in terms of investments?
17 A. Their advice to me was very, very poor. I actually
18 at the time joined Century Investment Club here in
19 Dublin in a very legitimate manner and could see
20 what could be done with monies if properly invested.
21 But unfortunately, I couldn't bring it back. It was
22 over in Guernsey. It was badly housed and badly
23 managed so I was glad in a way that this whole thing
24 came to a complete stop and I could get rid of it
25 because I think I lost more money in a very
26 legitimate manner if I had it by having it over
27 there in the first place.
28 263 Q. I think just one concluding question, Mr. Daly.
29 I believe that somewhere in the papers it was
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1 suggested that you closed your account with Guinness
2 & Mahon at around the time that you were sorting out
3 matters with the Revenue Commissioners?
4 A. Correct.
5 264 Q. So that was around 1993/1994?
6 A. 1994 .
7 265 Q. So that you closed your account with College
8 Trustees then?
9 A. Totally.
10 266 Q. MS. MACKEY: Could you just tell us how
11 you did that, Mr. Daly?
12 Who did you contact about that?
13 A. I picked up the phone and I called Brian Ellis and I
14 said; 'I need as much assistance and all the
15 information you can give me. I am facing an
16 investigation', and they sent me the papers.
17 267 Q. What about the funds?
18 A. They sent me the cheque. Sorry, they had
19 transferred the funds at that time to AIB Jersey and
20 consequently AIB Jersey supplied instruments, very
21 legally technically stating the total amount. In
22 fact, you have it there.
23 268 Q. You but you say College Trustees transferred it to
24 AIB Jersey?
25 A. Even at that time, even before my encounter with the
26 investigation branch, they already had monies with
27 AIB Jersey.
28 269 Q. College Trustees had?
29 A. College had. They were moving around the monies.
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1 270 Q. So just to get it clear, when the account was closed
2 with college, was that closed before the
3 investigation started when your funds moved to AIB
4 or did College subsequently close down your entire
5 fund? Were there still some funds left in College?
6 A. None whatsoever.
7 271 Q. So when did you finish your contact with College
8 itself?
9 A. When I asked them to give me the total amount of
10 funding, which is reflected in the document I gave
11 you, and they placed these in front of -- well, my
12 accountants did, Deloitte & Touche.
13 272 Q. When did College return your funds to you?
14 A. Well, College never returned the funds to me. I am
15 trying to figure this out. The funds are with AIB.
16 273 Q. They still are?
17 A. No, no. The funds at that time, say in January
18 1994, when the amount of monies had to be lodged
19 with the Revenue, then half the funds were sent
20 because I was charged 50% of everything I owned and
21 as a result, the residue was 50%, but in my name in
22 AIB Jersey.
23 274 Q. So it had no contact at that stage with College
24 Trustees?
25 A. None whatsoever.
26 275 Q. How did it get into your name? When did that
27 happen?
28 A. I am sure I asked them.
29 276 Q. You asked College?
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1 A. Yes .
2 277 Q. But this is what I am trying to ascertain; when the
3 end of the account in College Trustees came about
4 and when that money went into your own name in a
5 different bank entirely?
6 A. As the politician said, that is a good question and
7 I would love to find the answer.
8 278 Q. Did you instruct College Trustees at any particular
9 point to close down the trust?
10 A. I did, yes, indeed.
11 279 Q. That is what I am trying to find out. When did that
12 happen?
13 A. I am sure it happened in January 1994.
14 280 Q. January 1994. You instructed Mr. Ellis?
15 A. Yes, indeed.
16 281 Q. To close your account?
17 A. Correct.
18 282 Q. And to do what with the funds?
19 A. First of all to send me a cheque. In fact, the
20 Revenue have a copy of this. But half the monies,
21 they were still in Jersey but in my name.
22 283 Q. But did you instruct them at that point to put them
23 in your name?
24 A. I am sure I did, I am sure I did. I said I wanted
25 no more to do or nothing further to do with College
26 Trustees. The reason why they were left in AIB in
27 Jersey was the fact that -- here was a very
28 traumatic time for me personally.
29 284 Q. I understand.
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1 A. Consequently, as long as Revenue got their hands on
2 the cheques, they were happy. Then one of the
3 accountants in AIB said; 'If you leave your money
4 over there, you are going to be charged 48% DIRT but
5 if you bring your money back here to us in the
6 Carpet Mill Centre, then you are only going to be
7 charged DIRT at the normal rate.'
8 285 Q. Can I just summarise this and you tell me if I am
9 incorrect in what I understand now, that at a point
10 in January 1994 you instructed College Trustees,
11 Mr. Ellis, to close your account with them, to close
12 down the trust?
13 A. Yes.
14 286 Q. And to send you a cheque of 50% of that, which you
15 wished to pay to the Revenue Commissioners?
16 A. Yes, correct.
17 287 Q. And that with the other 50%, they were to put it
18 into an account in your name in AIB in Jersey, is
19 that it?
20 A. I am endeavouring to try and figure out how. I am
21 quite certain that prior to this chaotic situation
22 occurring, I knew all my monies were with AIB in
23 Jersey but still under...(INTERJECTION)
24 288 Q. In the name of College?
25 A. Under the name of College.
26 289 Q. Yes, I understand that. Now it is when that
27 stopped.
28 A. Whether I did it by phone, whether I instructed AIB
29 Jersey that this is not College money, it is my
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1 money and I have paid my dues to the State and I
2 have given them 50% and the rest of it is in my
3 name. Now I may not be exactly precise in what I
4 am saying but it is a very good thing and I would
5 like to even examine myself as to precisely.
6 290 Q. Do you think you may have any documents in relation
7 to that? Would you have any letter you may have
8 written either to AIB Jersey or to Guinness and
9 Mahon or to College at that time that may clarify
10 this for you, or that they may have copies?
11 A. I will certainly endeavour to do that.
12 291 Q. Will you look into that so that we might clarify
13 what instructions you gave?
14 A. Yes.
15 292 Q. Thank you, Mr. Daly. Would it have been the case,
16 do you think, that they would have accepted
17 instructions by telephone? How would they have
18 identified it was you and so on?
19 A. May I go home and ponder and think this out?
20 293 Q. You may certainly, yes, and if you can locate any
21 documents.
22 A. Because I will tell you one thing, whatever age I
23 was at that stage, I wanted to wash my hands of
24 everything. I have been cleansed. And I never
25 enjoyed the money, never even -- for such an amount
2 6 of money never to have.. Not that I am making a
27 point on that.
28 294 Q. Perhaps if you can clarify it in your own mind,
29 perhaps you would write it down for us and send us
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1 in what you recollect about the matter when you have
2 recollected it and if you can locate any documents,
3 whether you may have copies yourself or whether you
4 think College Trustees could furnish you with a copy
5 of something?
6 A. I am sure College Trustees, there is something
7 coming back in my mind, would have stated in a very
8 legalistic form of words that the entire amount of
9 money which they held on my behalf was X, Y or Z
10 amount and that the 50% of that was whatever that
11 was and that the balance -- it is an interesting
12 area. I am sorry I cannot help you.
13 295 Q. If you can clarify it for us, Mr. Daly?
14 A. Yes.
15 296 Q. Especially if you can get any documents that would
16 clarify it, that would be great. Thank you very
17 much.
18 A. Surely, yes.
19 MR. ROWAN: Mr. Daly, thank you very
20 much. I think that
21 concludes our interview today. The interview will
22 be transcribed and Ms. Cummins will be in touch with
23 you about coming into sign the transcript in due
24 course.
25 A. Yes. May I inform you of my movements in the coming
2 6 months?
2 7 MS. MACKEY: You can inform Ms. Cummins
28 at the end, that will be
29 fine, because she will be dealing with you so you
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can sort all that out with her
Thank you very much.
THE INTERVIEW THEN CONCLUDED
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»+- T u j u . ^ o o o
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Appendix XV (148) (1)
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FILEC
LODGEMENTS AND WITHDRAWLS
Without die atqpportof all bank atalementolfindftin^^letorecaHeexact dates. I ironed Brian Ellis of College TrusteesLtd, on April 28* asking hirfi forthe documentation on my file TC431 which was closed 7 years ago He sent me a fkx today whichl enclose. AaIha\«aUthcd<}aniinntatioaberelra3edto me in 1993 for mytax settlement 1 enclose those bank statements showing all funds on a rollover basis.
AO I can do is my reasonabk best to amwa: tlx questions you pose on pages 16 and 17with the data r have ia File CL
(a) Martin Keane of Guinness Mahon Dublin transferred a scm in the region of£120.000 to Guinness Mahon Guaxsney which I brought to bis bank in a suitcase incash from Allied Irish Finance (Northof Ireland) circa December 1977
(b) Seemingly this moneywas taken over by College Trustees as of January24* 1978by John Lipscombe then at Guinness M ^ n Guernsey and director of the Trust
(c) There were 1 very large lodgements, the one stated above as £120,000 and a secondone of £128,234.96. This second sum was brought in cash fa a suitcase to theNewry Branch of the Bank of Ireland on February 1983 and transferred to theBank of Ireland in the Isle of Man and later to Guinness Mahon Guernsey. Ienclose the BOI statement.
(d) My statement refers to thefeet that I withdrew £10,000.cash fiom GuinnessMahon Dublin on the of August 1990 A Mr Murray or Mr. Farrelly of GuinnessMahon Dublin facilitated me in this regard j.
• The Investxnex±Dqpartinent of Guinness Mahon Dublin bought 1000 sharesin Greencore and 5000 shares in Irish Life on my behalf I enclose those 2documents.
SUMMARY of Enclosures on File C
In November/ December ofl9931 received from Mr. SJB.Woodward of College Trusteesa statement fromGuinness Mahon Guernsey which shows the transfers of all funds fromthem to AJ.B. Bank (CJ.) Jersey
Should I receive fiirther documentation from archive storage in Guernsey as promised inthe enclosed fax I shall bring them to your attention immediately.
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Appendix XV (148) (1) (c)
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MEMORANDUM OF ADDITION '
On affa^***"**^- 9/K .the itust es accepted the •. following property and reaolved to treat the same as •an addition to .the settled funds of -theT r u s t s - *U>*<»-6LJS*it'
For ColjMge Trustees LiimLted• ' 1/ » *
• V• #
• • memo rand um op additi on
'tin 19 •, the Trustees accepted the
following property and resolved to treat the same as
an addition to the settled funds of like''Trust:- .
For College Xrustees plaited
MEMORANDUM OF ADDITION
• 1.• • • » * •
On ' 19 " 9 tho Trustees accented the .following property and resolved, to .treat the earne rsan. -addition to 'the. settled* funds of the '•.Trust:-- - • 1 • '
•For College Trustees Limited
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Appendix XV (148) (1) (d)
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l^rfareenMackeyBJL,Office o f the Inspectors,Trident House,
Blackcock.Co. Dublin
'May 2^20008 .V'
xjS^^Y^kar,
•^Pt _* t. gtafe tijat I <rtn»n endeavour to provide every assistance with your investigation.
a s an introduction to tba data you seek I wish to state tibat as a result of a letter fiom Mr.H. G. Oliver, an Inspector with the Investigation Branch of the Office of Chief Inspector
' of Taxes I availed of Section3 o f the Tax Amnesty Scheme of1993 by remitting allarrears of taxes in full, due from the tax year 1958/1959 to 1990/1991.
Tte Incentive Amnesty Section 2 did not apply to me as a resufc of having been written toby the Investigation Branch as of Sqatember 18 th 1992 .
l am a bachelor aged 73 and aretired teacher. I waa always fhnynrinlly independent as aresult o f m y teacher's salary irrespective of the moneys held in trust for me by CollegeTrustees Ltd located in Guernsey. As the deposits were o» a roll over basis l neverenjoyed income from them except where stated on File C ( marked Guinness'Mahon/
College Trustees TC431) which is enclosed with this statement•
In order to acquaint you as to how I came into fin^ with Guinness Mtfion I sketch ashort resume o f m y career.' I qualified as a teacher in 1947. From 1950 through 1958as a young teacher I participated in tours of Europe during my Summer holidaysattending student workcamps with groiqps of International students in Switzerland,Germany, France, Italy and the UK which enabled zse later to network worldwide.In 19571 obtained a Summerjob with an American Airline, Flying Tigers at HeathrowAirport and gamed valuable experience in operating transatlantic charters to the.UnitedStates. My task was to organise hundreds of Hungarian Refugees in charter flightsfrom Europe to the USA.
In 1958/591 started operating charters'from Ireland to the USA and successfullycontinued to do so as a one man operation until 1974.
P
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Page 2
By this 19751 had chartered over 60 trmwnttonrir? airliners which waa the source of themoneys with Guinness Mahon/College Trustees LtcLeamed by enormous hard work andv o y long hours.
The moneys from my transatlantic operation! profits to the United States were placed ondeposit with Guinness Mahon on a roll o w basis and were only used byme as stated onthe document in File C marked" witbdrawls" on specified dales as per my diary.
In 1977/78 an official o f GuinwSas Mahon bank, MrMartinKeane told me of an
intending split between T<-&h pounds and Sterling. He transferred the dqjosit toGuinness Mikon Gue :
Sincelwasr^^'inCKiernseyllaterw^Guinnwr cujh6n. I was told to contact a M& John lipscombe. He told me thatmyfbro^v^ acquired by College I was
j urprised and annoyed to learn this fact as I had given no authorisatfon &r my iunds to be^placed anywhere or given to anyone except the bank of Guinness Mahon in Guernsey.
. I was tokl thai this was m my own interest as the moI was asked to fiU out a letterof wishes It was dated October 26* 1981.My number was TC431
As Inever
gpt any correspondence from College Trustees LtdJ flerw to Guernsey in1984 and demanded a statement I learned tbatnayfimds had been placed withNJMRothchild & Sons ( C J.) and were under professional managementI fettuncoinfortable witfr this arrangement as I had no control over my fluids and sodemanded that John Lipscombe put the amount placed with Rothchild on record and inwriting which he did and signed it on March 21* 1984. • I later learned that whenMrlipscombe retired that he was replaced by a Mr Brian E11&He used to phone me once a year to tell me the yearly fees o f College and the amount ofmy deposit which were on a roll over basis..
On learning ofthefectthatl was under the scrutiny of the Investigation Branchas ofSeptember 18 th 19921 contacted a tax specialist in Debitte Touche. I was told toprocure all documents from College Trustees Ltd. fa so &r as it was humanly possible.Mr Pat Kenny of Deloitte Touche negotiated a tax settlement with the office of the ChiefInspector of Taxes. His office repaired all my tax returns. File B contains this data.On receipt ofyour letter on Friday April 14 th . I immediately contacted Guinness MahonDublin and College Trustees Ltd., Guernsey seeking additional documentation.
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Page 3 .
Attfae time of writing this letter to you I have not obtained aqy farther doaTTTvmftrtTonfrom either source. I severed aD dealings with them 7 years ago when I closed allaccounts and secured the documents fer my tax settlement which I now fijnxish to you inFfleC.
I phoned your Office this rooming to obtain a direction as to whether or not I should send
the documentation containing stated amounts of moneys. I was informed I should sendafldoomientatkjntoyouwithtimstatemeiit
Files marked A and B contain letters concerning the Settlement of my Tax Affairs with
File C contains documents reIatfer><oCoIIege Trustees Ltd and Guinness Mahon andrelevant toyour investferffc^T
May I state categp^j^fyttmt I never heard ofthe word "Ansbacher" until recent Pressreleases.
I n^ j^koew o f its significance nor what it stood for.
I never knew of the existence of a John Rnae or 'where he came ftom.
I have given to you the names of the relevant people who represented Guinness Mahon/College Trustees who conducted -to affairs to enable me wrongfully to evade the paymnetofthe taxes that I was legally bound to pay prior to 1991. I paid all my taxes in fiill onJanuary 14* 1994 as shown on the files at a rate of 50% of all moneys held on deposit
I am now a compliant taxpayerand have been for J years. I hjive made amends for myprevious transgression which took place 7 years ago I would like attest all my statementsto be true..
I am, naturally, concerned about any possible threat to riy privacy and confidentiality
which this investigation may pose through leakageas threatened on the front page oftodays Irish Independent. I had presumed that my compliance with the InvestigationBranch ofthe Chief Inspector of taxes was an end to this mutter. I now feel veryvunerable with this new investigation.
Unfortunately as I am under medical care due to an infected broken hip caused by a felland subsequent hip operation gone wrong please give me ample notice to attend inperson so as to arrange a suitable appointment to swear on oath that what I state is true.
Yours faithfully,
TiftLj
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Appendix XV (148) (1) (e)
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I • • I
a o o f
a * ji hn <• <• n
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Appendix XV (148) (1) (f)
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O O SH K BM K M B M O W H JU I T OO T / C O f J i W
c/o ooxMcra M u m cunour nam
» O BOX 117
OSJUJD C U M
B R I T I S H M j v r m i X M B
h CALL D/X
UUCS . BrtWMW brought forward
2S ju t •• muraoti bx
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ooxmnM M U B H csmw TR UST / " V I M T
M * / c n u i
*** Copy ftataaant
1.7»,«iO.S«0.00
* 1 , 7 2 7 , 4 C 0 . S 4
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Appendix XV (148) (1) (g)
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ACCOUNT NAME
STEPHEN DALY ESQ.,CAPITAL
ypN.TRACT DATE 15 July 1991,
Ri^ERENC E NO 19910716341
ACCOUNT NO 09404000
SETTLirMENT DATE 15 JULY 1991
WE CONFIRM WE HAVE PURCHASED FOR YOU :
ACCOUNT
5000.00
DESCRIPTION
IRISH LIFE
PRICE
• . •1.600
. COMMISSION
1
f faTALlRP
CONSIDERATION
8000.00
25.00
8025.00
STEPHEN DALY ESQ.29 RATHCAR ROAD EASTRATHCARDUBLIN 6
-H t •», *
For and an bahaif ofQUINNESS &MAHON LTD.
Guinntft& Uihon Lid.hcarportitd in IntendR»l ta/mlOII :17CoBa0»Bntii,DuUnZflial'ttmdnaiii i1O28ZTelaphom: 6796944 Tslsx 83667 (QemnQ 30437 (Ferex)'
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Appendix XV (148) (1) (h)
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n
t"
College Trustees LimitedBRB/CDS/TC 431
STRICTLY PRIVATE * CONFIDENTIAL
S. Daly Esq.,
29 Terenure Road East,Dublin. 6Ireland. 21st March 1984
Dear Mr. Daly,
We, College Trustees Limited, a member of the Guinness PeatGroup Pla hereby declare that we are holding at this date inthe registered name "College Trustees Limited Account TC 431"Participating Redeemable Preference Shares of U.S. 1 cent eachin Old Court International Reserves Limited as follows:
Fund Class No. of shares Value in Deutschemarks: as at 27th February -1984
Deutschemarks 7,715.372 401,546.54
Trench Francs 6,869.862 385,310.48
Japanese Yen -11,428.947 834,960.60
Total value as at 27th February 1A84DnlySaif817.G2
: the amount of approximately Dm.4e farther declare that the amount of approximately Dm.425,750-which is about to be transferred to N.M.JRothschild a Sons (C.I.)Limited for our account will be utilised In its entirety topurchase further Participating Redeemable preference' Shares -in
Old Court International Reserves Limited and that such furthershares will also be registered in the name of College' TrusteesLimited Account TC 431.
We hereby confirm that all and any assets' now registered or whichat any time in the future may be registered in the name of CollegeTrustees Limited Account TC 431 will be held in respect of thetrust known to you and that we as trustees of that trust are inpossession of a letter from you dated 26th October 1981 whichprovides us with guidance as to the disposition of the capital ;
and income of the said trust.
icerely,
- • r \ /J.G. LipscombeDirector
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Appendix XV (148) (1) (i)
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College Trustees Limited
Our Ref: BRE/KEH/CSMATS
5* May, 2000
STRICTLY PRIVATE A CONFIDENTIALTO B E OPENED BY AD DRESSEE ONLY
S Daly EsqFTP Travel United29 Terenure Road EastDublin 6IRELAND
Dear Mr Daly
I e f e r toyour etter of 18* Aprl, 2000, in which you request information and documents inrespect of what you refer o as "deposits of moneys that you had wtth this Company*.
Firstly, I should explain that this Company has never been a deposit accepting institution.
The Company's principal activity was that of acting as a Trustee and any funds added o a Trust
were crecfited o an account with a properly Icensed bank. Those accounts were all dearlyidentified.
I have pteasu re in enclosing copies of the accounts of The Elinor Trust for the period ended 31"December, 1991, and for he year ended 31* December, 1992.
The Trust Fund was dstributed in early 1994 and so no accounts were prepared after those of1992.
In response o paragraph 3 of your etter, I can Inform you that the first transfer of funds Intothe Trust ook place on 24* January, 1978.
I hope that the accounts and the Information In this etter are sufficient for your purposes and
those of the Inspectors but, if you do need any more information please do not hesitate tocontact me.
Kind regards.
Yours sincerelyfo r COLLEGE TRUSTEES LIMITED
/USUa
8 R Ellis EncP. O. Box 223, Les Echelons, St Peter Port, Guernsey, Channel Islands, OY13NT,
Telephone: 01481 726641 Tetex: 4191532 O Fta: 01481 726218
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Appendix XV (148) (2) (a)
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K E N N E D Y M C G O N A G L E B A L L A G HI n c o r p o r a t i n g B e l l B r a n i g a n O ' D o n n e l l & O ' B r i e n
S () L I ( I 1 <) K S
2 0 NORTHUM B E RLA ND R O A D D U B L I N 4
I L L 6 60 ' ) 7 W I - A X 6 6 0 9 4 3 4
E M A I L : inloK/ knib.ic
vwvw.knih.ie
Office of the Inspector Ap pointed by Orcler 7
ofthe High Court to Ansbacher (Cayman) Limited3 r d Floor
)X 75ler Your ref: C/D01/F07/T01Our ref: MO'S/DF
Trident HouseBlackrockCo Dublin
14 Novemb er 2001
Re: Stephen Daly ("SD")
Dear Sirs,
Thank you for the opportunity to influence your preliminary conclusion concerningMr. Stephen Daly
In your preliminary co nslusions dated 18th July 2001 you find that Stephen Daly (SD)was a client of Ansbacher. It is our subm ission that it would be inappropriate toconsider SD an Ansbacher client for the reasons outlined below.
The inspectors concluded that SD w as the beneficial owner of the Elinor Trust, whichcontained funds in account reference TC341 and which w ere deposited in theAnsbacher account.
"Mr Daly enjoyed the use of funds on deposit by means of a service provided byAnsbacher whereby he was able to withdraw funds in Ireland and was therefore aclient of Ansbacher."
The Elinor Trust was a trust set up by Guinness Mahon (Guernsey) with moniestransferred from Dublin to Guernsey. The m oney w as transferred on the advice of M r
Michael Keane of G uinness Mahon in Dublin, who advised SD that with theimpending split between the Irish and sterling pounds, he would be better off to holdthe money offshore. At this stage there was no m ention of setting up a trust. There issome debate as to when the account with Guinness Mahon was opened, but it is clearthat at least three years after the account was o pened, SD w as informed that his fundshad been acquired by
College Trustees Ltd and that a trust had been set up to deal with the funds. T his hadnot been authorised by h im, and it is clear that theinvestor had intended m erely for adeposit account to be set up - this was em phasised in the interview.
Mit 'i i m:i, .i. o ' s i i i a r o u ' . r p. u \i i. \ i i i i n Ri-xn: i;. d i x o n r t v i n c . h a r r y c o r d o n ,h i x ;i ;
a s s i s t a n t s : i i o n a i i i. n ry a o a t i i a u . i a y i o k
coNsri.TANis: i a i k t . n c t k uk \ n i u \ n m a r i i n a i . o ' c o r m \ n
c o m m i s s i o n e r s t o r o a t h s / m v i a r h s i v b t i c
* •„ ,. • Me mb er o l ' lhe Assoc ia t ion o f Independent European La wyers .
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In 1984 he found out that his funds had been placed with NM Rothschild & Sons(C.I.) and were under professional man agem ent. The client then dem anded that theamount in Rothschild be placed on record and in writing. Thereafter the onlycorrespondence the client had with College Trustees Ltd was an annual telephone callto discuss the Trustees fees and the amo unt of the deposit to be rolled ove r.
A couple of withdrawals from the account w ere m ade, the first was to facilitate thepurchase of shares, the second was a withdrawal of £10,000 in notes. Bothtransactions were arranged by Guinness Mahon (Dublin).
As proof of the fact that SD was a client Ansbacher, the inspector produced astatement wh ich showed that Deutschmarks held under the identification num ber ofSD had been deposited in an account held in Dublin in the name of Guiness M ahonCayman T rust, a former name of A nsbacher. The inspector accepted however, thatthis may have been done without the clients knowledge (See page 31 of the interviewtranscript).
SD was under investigation by the Tax Office in 1992 and availed of the TaxAmnesty. Once a settlement had been negotiated in 1994 SD closed all accounts heheld with the Trustees and has not had an y further, dealings with them.
Given the circumstances, it appears inappropriate to classify SD as a client ofAnsbach er with all the connotations such a finding would have o n both his personaland professional lives. The do cumen t "Definition of a Client" produced by you is notany justification to call SD a client of Ansbacher.
Your report can contain fact and o pinions but not misstatement of fact. W hile SDapproached Guinness Mahon with a view to setting up a deposit account and wasadvised to place the funds in Guernsey and did so. W hile a trust was set up to dealwith these funds, this was done without SD's knowledge and the only regularcorrespondence he had with College Trustees was an annual telephone conversationto discuss their fees.
It now appears (through your investigations, while some of SD's funds w ere placed inthe Ansbacher account, these funds w ere effectively not under his control and theInspectors have already accepted that this transfer may h ave been done w ithout hisknowledge. In the circumstances it is not reasonable to consider SD a client ofAnsbacher. We urge you to reconsider your preliminary conclusion of the 18th July.It is neither factually correctnor fair to SD.
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What does the ordinary English usage of the term "client" mean ? In the context of arelationship between a party and a professional person where that person is using theservices of the professional person the term "client" is clearly understood. It can alsomean " customer". Given the facts the statement that SD was a client of Ansbacherdoes violence to the concept "client". Undoubtedly SD had money which he put intothe hands of third parties to man age. In fact in the course of management certain ofthe funds m ay or may not hav e been placed in an Ansbacher account by a third partydoes not justify the description "a client of Ansbacher". As the concept of being an"Ansbacher account-holder" or a client of "Ansbacher", in the speak of theinvestigation is an allegation which is seriously damaging to those against whom it islevied. The current preliminary conclusion is unjustified and damaging to SD.
Might we suggest that if it is necessary to refer to SD at all in your report ( and w hyhe should be named in any public way at all is unclear, he can be identified as a
"party" who employed the services of G uinness Mahon. That part of h is monieslodged to Guinness Mah on were, for a limited period, deposited, unkno wn to him, inan Ansbacher account.
Yours faithfully,
Kennedy McGoriagle Ballagh
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Appendix XV (149) Mr W illiam Forwood & M rs JoyceForwood
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MrWilliam Forwood & Mrs Joyce Forwood.
a) Transcript of evidence of Mr William Forwood dated 17 July 2001.
b) Letter of 24 October 2000 - Mr William Forwood to Inspectors.
c) Extract from GMC T re College sundry sub-account at Gu inness andMahon of 20 January 1987.
d) Letter of 17 May 1991 from Ansbacher Limited to IIB.
e) Extract from Report of the Central Bank of Ireland on Guinness andMahon as at 31 December 1985.
f) Internal Guinness and Mahon memo re York Securities Limited.
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Appendix XV (149) (1) (a)
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PRIVATE EXAMINATION OF MR. WILLIAM FORWOOD
UNDER OATH
ON TUESDAY, 17TH JULY 2001
I hereby certify the
following to be a true and
accurate transcript of my
shorthand notes in the
above named interview.
Stenographer
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PRESENT
The Inspectors: MR. P. ROWAN
MS. MACKEY BL
Solicitor to the Inspectors: MS. M. CUMMINS
Interviewee: MR. FORWOOD
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I N D E X
WITNESS
MR. FORWOOD
EXAMINATION
MR. ROWAN
MS. MACKEY
MR. ROWAN
PAGE
5 - 3 8
39 - 71
72 - 76
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1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,
2 17TH JULY 2001:
3
4
5 MR. ROWAN: Formally, Mr. Forwood,
6 good morning to you and
7 thank you for coming today. May I introduce
8 myself: I am Paul Rowan. I am one of the
9 Inspectors. On my right is Ms. Noreen Mackey.
10 MR. Forwood: Yes.
11 MR. ROWAN: And Ms. Mary Cummins, our
12 solicitor.
13 MR. Forwood: Yes.
14 MR. ROWAN: I just want to say that
15 this is not a Court and
16 it is not a Tribunal. It is an interview.
17 MR. Forwood: Yes.
18 MR. ROWAN: However, we do have some
19 formalities in that we
20 take it under oath and we also keep a record of
21 the interview. So, without further ado perhaps,
22 Ms. Cummins, you would invite Mr. Forwood to take
23 the oath.
24
25
26
27
28
29
4
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1 MR. WILLIAM FORWOOD, HAVING BEEN SWORN, WAS EXAMINED
2 AS FOLLOWS BY MR. ROWAN:
3
4
5 1 Q. MR. ROWAN: We are going to divide the
6 interview into two main
7 parts. The first part is that we would like to
8 have some of the background which you have about
9 your time in Guinness & Mahon and whatever
10 involvement you had with Guinness Mahon Cayman
11 Trust?
12 A. Yes.
13 2 Q. Which of course is now known as "Ansbacher" Cayman
14 Limited?
15 A. Yes.
16 3 Q. Then the second part of the interview will be to
17 take up some specific matters with you?
18 A. Yes.
19 4 Q. And Ms. Mackey will undertake that part of the
20 interview?
21 A. Yes.
22 5 Q. You very kindly provided us over the months with
23 some information and I am particularly thinking,
24 Mr. Forwood, of your letter of the 24th October
25 and the copy of the statement which you provided
26 to us which you had already sent previously to the
27 Authorised Officer; Mr. Ryan (Exhibit 1)?
28 A. Yes.
29 6 Q. You told us that you qualified as a solicitor in
5
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1 London?
2 A. Yes .
3 7 Q. In 1954?
4 A. Yes .
5 8 Q. And thereafter became a partner in a London law
6 firm?
7 A. Yes .
8 9 Q. Did you have a specialisation as a solicitor?
9 A. Yes, essentially commercial.
10 10 Q. Yes?
11 A. But most particularly in the field of occupational
12 pension schemes.
13 11 Q. I see?
14 A. I should be so boring.
15 12 Q. Okay?
16 A. But that is —
17 13 Q. Then you said that you were asked
18 by Mr. John Guinness to join Guinness & Mahon?
19 A. Yes .
20 14 Q. How did you know John Guinness?
21 A. It is was actually through my work as a solicitor.
22 I acted for a small company in which I was
23 particularly interested called Transworld
24 Helicopters Limited and one of the Directors of
25 Transworld Helicopters went to Ireland with a view
26 to setting up a facility for training pilots and the
27 like at Shannon Airport. During the course of
28 this he became acquainted with John Guinness and
29 the Bank provided funds I think and as a result
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1 I met John Guinness and I think he was favourably
2 impressed by what he saw. I at the time was
3 suffering desperately from overwork and when he made
4 this entirely unexpected suggestion to me I rather
5 jumped at it.
6 15 Q. Okay. What did he suggest to you?
7 A. That I should join the Bank and that after six
8 months, well, I went over for two months I think and
9 I worked as an assistant cashier, that kind of
10 thing, and then I went back to London and I spent
11 six months in Guinness Mahon & Co, which was the
12 London Bank.
13 16 Q. Did you...(INTERJECTION)?
14 A. And also the parent Bank.
15 17 Q. Yes. When Mr. Guinness put the proposition to you
16 did you know that you were going to join the Bank
17 and after a period of aclimatisation?
18 A. Yes.
19 18 Q. You were going to take a senior management position?
20 A. Yes.
21 19 Q. You did?
22 A. Yes.
23 20 Q. Right. He felt that you would bring your commercial
24 law experience to the Bank?
25 A. Yes.
26 21 Q. Is that what he was looking for?
27 A. I think more than that. It was a very old fashioned
28 and very small affair. The Directors sat together
29 in what was known as the Partners Room.
7
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1 22 Q. We will come to that?
2 A. Yes.
3 23 Q. However, essentially you were bringing your
4 commercial law experience and your wider experience
5 to Ireland to the Bank?
6 A. Yes.
7 24 Q. Okay. You spent a period with Guinness Mahon &
8 Company in London?
9 A. Yes.
10 25 Q. What did you do during that period of six months
11 or so?
12 A. Again, it was learning, or intended to be a
13 learning, phase. I went to the various departments
14 in the Bank. I was also taken on visits to money
15 brokers probably. I can't even remember what they
16 were called now.
17 26 Q. Did you get involved in any commercial transactions
18 in that six months?
19 A. I don't think so.
20 27 Q. All right?
21 A. In fact it is quite likely that I sat in on, you
22 know, work which somebody else was doing.
23 28 Q. Quite likely?
24 A. Yes.
25 29 Q. So that in 1968 you moved to Ireland?
26 A. Yes.
27 30 Q. And you were appointed as Co-Managing Director with
28 Sir George Mahon and Mr. John Guinness?
29 A. Yes.
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1 31 Q. How did you divide out the responsibilities?
2 A. In no very formal fashion. We all sat in the same
3 room. We discussed approaches made to us to borrow
4 funds; that kind of thing. Obviously, I was no
5 banker. So, I tended to concentrate on corporate
6 advice; that kind of thing.
7 32 Q. Legal agreements?
8 A. Not so much. Takeovers and mergers; that kind of
9 thing.
10 33 Q. Right. When did the question of creating some
11 entity in the Cayman Islands first start to be
12 talked about?
13 A. I can't be exact but 1972 would be my best guess.
14 34 Q. I might be able to give you a little bit of help?
15 A. Yes.
16 35 Q. Page 95, Mary (Same Handed). These are the Minutes
17 of the conclave (Exhibit 2)?
18 A. Yes.
19 36 Q. I think they are referred to as?
20 A. Yes.
21 37 Q. And you will be familiar with those because you can
22 see under Minute 150 at the top your initials are
23 beside it?
24 A. Yes.
25 38 Q. If you go down to Minute 166 entitled "Cayman
26 Islands"?
27 A. Yes.
28 39 Q. You will see what it says there:
29 "M & G have set up a unit trust in theCayman Islands"?
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1 A. Yes.40 Q.
2 "Agreed that we should investigate thepossibility of forming a company or a
3 trust there or in some other haven"?
4
5 A. Yes.
6 41 Q. Does that ring a bell?
7 A. I can very well imagine that that is how it
8 happened.
9 42 Q. You can see the date on the top of these Minutes?
10 A. 1969.
11 43 Q. 17th January 1969?
12 A. Yes.
13 44 Q. What actually was done about that, Mr. Forwood?
14 I mean it seems that Mr. Guinness's initials are
15 beside that?
16 A. Yes.
17 45 Q. Was he involved in pushing that idea forward?
18 A. Yes, I think he probably was. I can give you a
19 little bit of background to that if you are
20 interested?
21 46 Q. Yes. I was going to show you page 96, which is
22 probably of a little bit more help (Exhibit 3)?
23 A. Yes.
24 47 Q. And the third Minute down, Number 166/2?
25 A. Yes.
26 48 Q. Entitled "Cayman Islands"?
27 A. Yes.
28 49 Q.
29 "McGonagle has been instructed toarrange for the incorporation of seven
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1
2
3
4
companies of which four will be taxexempt companies. It is proposed thatwe shall employ the Bank of Nova ScotiaTrust Company as Trustees; BarclaysDC&O as Bankers and WS. Walker asSolicitors"?
5 A. Yes .
6 50 Q. That was putting much more organisation into it?
7 A. Yes .
8 51 Q. So, would you like to add now what you were going
9 to say a moment ago?
10 A. The interest in the Cayman Islands.
11 52 Q. Yes?
12 A. John Guinness was very much a sailing man and it is
13 my recollection that he went on a sailing holiday
14 in the Cayman Islands. While he was there he was
15 offered land. Anyway there was land available
16 which was thought to be ripe for development. When
17 he came back he discussed this with his cousin James
18 Guinness and it was decided to form a little company
19 to buy some land with a view to development.
20 53 Q. All right. May I just ask you to stop there
21 because we will come to that just in a moment?
22 A. Sorry.
23 54 Q. What is the reference in this Minute (Exhibit 3)
24 (indicating) to:
25
26
"McGonagle has been instructed toarrange for the incorporation of sevencompanies"?
27 A. Well, my guess is that McGonagle was a man called
28 Liam McGonagle.
29 55 Q. Yes?
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1 A. Who was a solicitor in Dublin.
2 56 Q. How had he come into the discussion about Cayman?
3 A. He was one of the solicitors whom the Bank used to
4 consult.
5 57 Q. What was the purpose of incorporating seven
6 companies?
7 A. I don't know nor can I remember at this stage what
8 a tax exempt company is.
9 58 Q. Okay. Let us turn to page 97, (Same Handed)?
10 This is a Minute, 294, entitled "Bank of Nova Scotia
11 Trust Co. (Cayman) Ltd," and it is a Minute of
12 June 1969?
13 A. Yes.
14 59 Q. It says:
15 "John Collins, Manager, has called tosee GEJM and JHG in connection with
16 the companies being set up for us.L. McGonagle who was present at the
17 meeting is satisfied with the proposalswhereby an operation can be
18 "unscrambled" without any action havingto be taken in the Cayman Islands."
19
20
21 Who is the reference to "John Collins" here?
22 A. It was the Bank of Nova Scotia; wasn't it?
2 3 MS. MACKEY: Yes.
24 A. Nova Scotia Trust Company.
25 60 Q. MR. ROWAN: So, Mr. Collins was the
26 Manager of the Bank of
27 Nova Scotia; is that right?
28 A. Yes, there were two Managers I think.
29 61 Q. Yes. The other one?
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1 A. One was called John Furze.
2 62 Q. Yes. So, he was the person with whom
3 Guinness & Mahon dealt with in the Bank of
4 Nova Scotia or they were the people?
5 A. Evidently.
6 63 Q. Yes?
7 A. Yes, I am sure that is so.
8 64 Q. All right. So, carrying on from that: That
9 relationship developed I assume?
10 A. Yes.
11 65 Q. If we go to page 107, (Exhibit 5) (Same Handed) —
12 Mr. Forwood, just before we read that page could I
13 ask you what is meant by unscrambling in the
14 previous Minute? Do you know what that means?
15 A. No, I don't.
16 66 Q. Presumably, though it means to undo something that
17 has been done?
18 A. I am afraid I am completely mystified by that
19 (Exhibit 4) (indicating).
20 67 Q. The ordinary use of words might imply that?
21 A. Let me just read this again? I am afraid I don't
22 understand that.
23 68 Q. I see. Then going on to page 107, at the bottom,
24 and Minute 372 of October 1969?
25 A. Yes.
26 69 Q. Entitled:
27
28 "Collins of Nova Scotia Trust Companyhas..."
29
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1 You need the other page, (Same Handed)
2
3
4
5
"...put up to us a propositioninvolving a loan to purchase 150 acresin the Cayman Island for $200,000.We are offered 9% on the loan and aminimum of 25% of the equity. It hasbeen agree that JR shall fly out toinvestigate this project at once."
D
7
8
So, this was Mr. Collins putting the proposition
about the land?
9 A. Well, that is certainly what it looks like.
10 70 Q. So, the introduction to that opportunity came from
11 effectively the Bank of Nova Scotia?
12 A. So it appears from this (Exhibit 5) (indicating).
13 71 Q. Right. Who is JR?
14 A. There was a fellow called John Roberts who was with
15 the Bank for a short time and that is my best guess.
16 72 Q. Okay. Did the land deal get the go ahead? Did the
17 Bank decide to go ahead with this deal?
18 A. I can't say that it was that deal (Exhibit 5)
19 (indicating) but there was a deal. The Bank was not
20 involved in it. It was a little consortium of I
21 think Directors in London and Directors in Dublin.
22 73 Q. This was referred to in your letter (Exhibit 1).
23 You say:
24
25
"As a result a syndicate of investorsbased in London purchased land..."?
26 A. Yes .
27 74Q.
Okay. You say those were -- that syndicate involved
28 Directors of Guinness & Mahon in Dublin and Guinness
29 & Mahon in London?
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1 A. Yes. I don't know whether there were other people
2 involved.
3 75 Q. I see.
4 A. I myself had a small participation.
5 76 Q. You had a participation?
6 A. Of 1% or something.
7 77 Q. Yes. Was it a successful venture?
8 A. No, not really.
9 78 Q. I mean did it make money?
10 A. No.
11 79 Q. It did not?
12 A. I think there are still some properties there.
13 80 Q. I see, right. So that in any event you say in your
14 statement (Exhibit 1):
15
16
17
18
"In or about 1970 Mr. J. DesmondTraynor FCA, up to then a partner inthe accountancy firm of Haughey Bolandjoined the Bank as a Co-ManagingDirector with John Guinness andmyself"?
19 A. Yes .
20 81 Q. Can you recall, Mr. Forwood, how it came that the
21 Bank recruited someone from an accountancy firm and
22 more particularly Mr. Traynor specifically?
23 A. Yes. We were conscious, when I say "we" I mean
24 George Mahon and John Guinness and I, that we all
25 came from the same background. We were all educated
26 in the same school. We were all Protestants. None
27 of us really had, we thought, sufficient connection
28 with the wider world and we were very anxious to
29 expand and we were very much tarred with the
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1 Protestant brush let's face it; our clients, our
2 employees. We wanted to change this and we decided
3 that there was room for another. We debated this
4 for a long time and we had come across, all of us
5 had come across, Mr. Traynor. I can't remember how
6 but we had.
7 82 Q. Would he have been involved with the Bank on behalf
8 of Haughey Boland clients?
9 A. He could have been. He could have been.
10 83 Q. Because if you did not...(INTERJECTION)?
11 A. But in any event we all knew him for business
12 reasons.
13 84 Q. Right?
14 A. So, I suppose that's very likely.
15 85 Q. Yes?
16 A. We, the three of us talking together, wrote out a
17 specification, a kind of thing we were looking for,
18 and somebody said this could be Traynor and we
19 approached him. He had recently had a very serious
20 heart attack and I can remember him saying, "Give me
21 until tomorrow to decide whether to tell my wife.
22 If I tell my wife I shall accept because she will
23 make me." Anyway he did tell his wife and he joined
24 us and this probably tells us when; doesn't it
25 (indicating) (Exhibit 1)? I would have put it
26 about 1970 but it may have been earlier for all I
2 7 know.
28 MS. MACKEY: It was the end of 1969.
29 A. The end of 1969?
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1 MS. MACKEY: Yes.
2 8 6 Q. MR. ROWAN: You obviously thought that
3 Mr. Traynor had the
4 necessary skills, ability and importantly contacts?
5 A. Yes.
6 87 Q. In the wider circle?
7 A. Yes.
8 88 Q. In Ireland?
9 A. Yes.
10 8 9 Q. You invited him to join and you made him a
11 Co-Managing Director with Mr. Guinness and yourself?
12 A. Yes.
13 90 Q. What happened to the responsibilities when
14 Mr. Traynor came? Did that change things?
15 A. Well, evidently, yes, but arrangements continued
16 between the four of us.
17 91 Q. You were continuing to use the Partners Room?
18 A. Yes.
19 92 Q. And there were how many of you using the room then;
20 three?
21 A. Four.
22 93 Q. Four.
23 A. Well, I think four.
24 94 Q. By today's way of doing things that is a strange
25 arrangement?
26 A. Yes.
27 95 Q. I mean there would have been four telephones and
28 potentially four conversations going on?
29 A. Yes.
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1 96 Q. How did that work in practical terms?
2 A. Well, I have to tell you that the world has changed.
3 I mean the concept of a Merchant Bank I fancy has
4 really gone. They were fairly old fashioned.
5 97 Q. What does that mean? Can you explain to me what old
6 fashioned means?
7 A. I will try.
8 98 Q. As you understand it?
9 A. Well, for example the Partners: We weren't Partners
10 but it was still called the Partners Room. The
11 Partners used to sit in one room. I mean I was a
12 Director of quite an important public company in
13 the United Kingdom, in Britain, and they were book
14 sellers/stationers etc. etc., and they had been a
15 partnership and the Directors of the public company
16 sat in one large room at different desks.
17 99 Q. In a similar way?
18 A. Yes .
19 100 Q. To Guinness & Mahon?
20 A. Yes .
21 101 Q. I see?
22 A. This is why I say life has changed. It wasn't
23 unusual then.
24 102 Q. Right. Anyway when Mr. Traynor came on board he
25 seemed to become involved in the Cayman situation
26 quite quickly?
27 A. I think so.
28 103 Q. Okay. Am I right in believing that Guinness & Mahon
29 in any event historically had had discretionary
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1 trust arrangements in the Channel Islands and there
2 would have been a number of wealthy families for
3 whom the Bank would have operated historically?
4 A. It could well be there was a Channel Islands one.
5 When it happened: I don't know. Whether it
6 happened before or after the Cayman Islands:
7 I can't remember. It was very likely before.
8 104 Q. Yes. May we have page 117, please, (Same Handed)?
9 (Exhibit 6) the second Minute, 166/7?
10 A. Yes.
11 105 Q. Of June 1970?
12 A. Yes.
13 106 Q. Mr. Traynor "reported on his meeting14 in London. It was noted that it
was now decided to go ahead with
15 the incorporation of Guinness MahonBahamas Trust Ltd. J.D.T. indicated
16 that as a result of the London meetingif the decision was finally reached to
17 proceed with the incorporation of aBank in the Cayman the name to be used
18 would be G.M. Cayman Trust Ltd and itwould then also be decided to have the
19 share capital of both the Bahamas TrustCompany and Cayman Trust Company owned
20 by a new holding company in Caymanetc."?21
22 A. Yes.
23 107 Q. So, this seems to have been a decision that
24 following some discussion with Guinness Mahon
25 in London it was decided to create Guinness Mahon
26 Cayman Trust?
27 A. Evidently, yes.
28 108 Q. In June 1970?
29 A. Yes.
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1 109 Q. So that was where, as far as we can see, Guinness
2 Mahon Cayman Trust started off?
3 A. Yes.
4 110 Q. Page 118, please (Same Handed) (Exhibit 7)? That is
5 a similar Minute of a different body so we can pass
6 by that. It is exactly the same wording?
7 A. Right.
8 111 Q. Page 119 (Same Handed); Minute 166/7 of the
9 16th July 1970:
10 "Mr. Traynor produces a memorandum onthe proposal to incorporate Guinness
11 Mahon Cayman Trust Ltd as a holdingcompany for our various investments in
12 Cayman. Agreed that the establishmentof this company is desirable..."
13
14 And that Mr. Traynor will pursue the matter with
15 someone referred to as HMS?
16 A. Yes.
17 112 Q. So, that was the go ahead?
18 A. He was a London Director I think.
19 113 Q. I see, right, okay. Do you know his name?
20 A. Well, if I am right it would be. His name would be
21 Hugh Sassoon.
22 114 Q. I see, Okay?
23 A. A well known banking name.
24 115 Q. Yes. Turning to page 125, (Same Handed). This is
25 a Minute I think of 1971 and at 667/2?
26 A. Yes.
27 116 Q.
28 "The executive council...",
29 which I take it to be in the Cayman Islands?
20
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1 A. Presumably.
2 117 Q.
3
4
5
6
7
8
"...have approved in principle theapplication for a banking licence.The Company has now been incorporatedand we had subscribed in full for theissued share capital of JamaicanDollars $20,000 which sum for the
present has been deposited with us."
3
4
5
6
7
8 So, GMCT had been incorporated and had had approved
9 its banking licence and it was ready to go?
10 A. Yes .
11 118 Q. Turning back to your letter you say (Exhibit 1):
12
13
"Probably in connection with thistransaction..."
14 Which was the land deal we talked about earlier,
15
16
17
"...two young men who had been workingfor another bank in the Cayman Islandsbecame aware of the existence of theBank"?
18 A. Yes .
19 119 Q. And subsequently...(INTERJECTION)?
20 A. If I could just interrupt for a second?
21 120 Q. Yes?
22 A. It's evident from what you have shown me that
23 the sequence of events was not exactly as I had
24 remembered it.
25 121 Q. Yes. However, in any event Messrs. Collins and
26 Furze were acting on behalf of the Bank of Nova
27 Scotia in transactions in which Guinness & Mahon
28 was involved?
29 A. So it appears from these notes (indicating).
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1 122 Q. Yes. You go on to say:
2
3
4
"Subsequently they approached the Bankand said they would like to establisha new bank in which they would have ashareholding"?
5 A. I evidently got that wrong because it appears from
6 here (indicating) (Exhibit 9) that the Cayman Island
7 Bank was in existence before they approached.
8 123 Q. Yes. I think that is correct from the chronology
9 of the thing?
10 A. Yes, yes.
11 124 Q. However, in any event a contact was made. Someone
12 made a suggestion to someone about them leaving the
13 Bank of Nova Scotia and joining GMCT?
14 A. I am fairly certain that the initiative came from
15 them.
16 125 Q. They said we could be of help to you?
17 A. Yes .
18 126 Q. Who then became involved in determining whether they
19 should join GMCT? Whose responsibility was that?
20 A. I suppose it was a joint responsibility. I mean it
21 was a Board decision.
22 127 Q. Right. However, did someone have carriage of the
23 implementation of it?
24 A. That I simply do not know. I know what part I
25 played because I did the lawyer's job at that stage.
26 128 Q. Yes. You say that it was considered that they had
27 useful connections and would be able to attract
28 deposits from overseas, particularly from the
29 United States of America?
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1 A. Yes .
2 129 Q. And then you go on to say:
3
4
"As an ex-lawyer I played a partin drawing up a "participationagreement"..."
5 Under which each of the two would own you think 20%
6 of the issued share capital and the Bank would own
7
8 A.
the balance?
Yes .
9 130 Q. So that Mr. Collins would have 20% and Mr. Furze
10 would have 20%?
11 A. Yes .
12 131 Q. And the remaining 60% would be held by Guinness
13 & Mahon?
14 A. I think so.
15 132 Q. Right. What did that participation agreement
16 contain? What terms did it have in it as far as
17 you can recall, Mr. Forwood?
18 A. I really don't recall. The object of the exercise
19 was: These two young men had left the Bank of Nova
20 Scotia and were going to play an important part in
21 the development of the bank in Cayman and it would
22 be as well to tie them in.
23 133 Q. How senior were they in the Bank of Nova Scotia?
24 A. Well, I think they were running the Bank of Nova
25 Scotia's Cayman Islands operation.
26 134 Q. Trust?
27 A. Subsidiary or whatever it was.
28 135 Q. Yes?
29 A. So, fairly senior.
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1 136 Q. So the idea was to tie them in?
2 A. Yes.
3 137 Q. By giving them a shareholding?
4 A. Yes, and a fairly generous shareholding at that.
5 138 Q. And they were appointed as directors?
6 A. Presumably.
7 139 Q. Would there have been any clauses in the agreement
8 to prevent them leaving?
9 A. Very likely but I don't remember. I mean I think
10 it would have been difficult to enforce if there
11 were.
12 140 Q. Yes?
13 A. The idea was to give them sufficient inducement
14 to stay.
15 141 Q. So, they became involved?
16 A. Yes.
17 142 Q. I have not got much information as to when that was;
18 do you? Can you remember? I mean in the light of
19 our conversation?
20 A. I would have thought...
21 143 Q. Yes?
22 A. My guess is that -- that one is not dated (Exhibit
23 9) (indicating). Pretty early on I think.
24 144 Q. Right?
25 A. Early on.
26 145 Q. Because presumably someone had to run the Bank once
27 it was set up?
28 A. Yes.
29 146 Q. And, you know, one had to recruit people presumably
24
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1 in the Cayman Islands to run it so it follows I
2 suppose that they would have been recruited quite
3 soon after its incorporation?
4 A. I guess so. I mean I think once the licence was
5 obtained and there is a reference here to the
6 Executive council (Exhibit 9) (indicating).
7 147 Q. Right?
8 A. I think they probably pricked up their ears and said
9 "There is an opportunity for us here." So, my guess
10 is that it was fairly early on.
11 148 Q. Did Mr. Traynor play a part in the implementation of
12 this or did you play a part?
13 A. No.
14 149 Q. Or Mr. Guinness?
15 A. Perhaps but the major part would have certainly been
16 Mr. Traynor who rather took over this aspect.
17 150 Q. Yes. So, once Guinness Mahon Cayman Trust had been
18 set up what services did it offer?
19 A. There is a lot of guess-work here because I can't
20 remember. I didn't play an active role. I think it
21 took deposits from expatriate Americans who might be
22 based anywhere and I think it was a conventional
23 banking business. They lent their funds.
24 151 Q. Did it take deposits from Ireland?
25 A. I don't know. It is possible but I don't know.
26 152 Q. Okay. Can we turn to page...(INTERJECTION)?
27 A. Because shortly -- sorry to interrupt.
28 153 Q. Yes?
29 A. Shortly after that Exchange Control Regulations
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1 were introduced into Ireland so that I rather doubt
2 whether Irish funds could have been transferred to
3 the Cayman Islands; I think.
4 154 Q. Yes?
5 A. I don't know if anybody knows when these Regulations
6 were introduced.
7
8
155 Q. However, if funds had already been outside of
Ireland of course they might have been transferred
9 there?
10 A. That would have been permissible I would have
11 thought.
12 156 Q. They might have been beneficially owned by someone
13 in Ireland?
14 A. They could well be.
15 157 Q. However, already outside Ireland?
16 A. Yes .
17 158 Q. Page 129, please (Same Handed) (Exhibit 10)?
18 A. Thanks.
19 159 Q. Minute 667/5. The date of these Minutes are not
20 clear but it is Mr. Traynor;
21
22
23
"Agreed that any differential on backto back arrangements involvingourselves and Cayman will in normalcircumstances be split equally."
24 What does that tell us, Mr. Forwood?
25 A. Now to me a back to back arrangement is one where
26 there is a borrowing and there is a lending. So,
27 the suggestion is that there could be presumably
28 lending from the Cayman and borrowing in Dublin.
29 That is what it suggests to me.
26
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1 160 Q. So that someone in Ireland might take a loan
2 presumably from Guinness & Mahon?
3 A. Presumably because it does say any differential in
4 normal circumstances will be split equally.
5 161 Q. Yes?
6 A. So, that is what it suggests.
7 162 Q. Yes. Then the back to back arrangement would
8 involve a deposit?
9 A. Well, that seems so.
10 163 Q. In Cayman?
11 A. That is what it seems to suggest.
12 164 Q. Yes .
13 MS. MACKEY: Do you know what it means,
14 Mr. Forwood?
15 A. Sorry?
16 MS. MACKEY: Do you know what it means,
17 Mr. Forwood?
18 A. Well, I am guessing.
19 MS. MACKEY: However, what we want to
20 get from you is evidence.
21 So, if you actually do not know, you should say so.
22 A. Well, I am afraid there is going to be a lot of
23 "don't knows".
24 MS. MACKEY: Yes.
25 A. During the course of this interview.
26 MS. MACKEY: If that is the case you
27 should just simply say so.
28 A. Because it's a long time ago.
29 MS. MACKEY: Yes.
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1 A. And I wasn't directly involved.
2 MS. MACKEY: Yes.
3 A. And I may well have been a director of the Cayman
4 Island Company but I certainly never attended a
5 Board meeting. I never went to the Cayman Islands
6 and I think I only met Collins and Furze about once
7 each.
8 165 Q. MR. ROWAN: However, I believe I am
9 correct in saying that you
10 are trained as a commercial lawyer?
11 A. Sorry?
12 166 Q. You are trained as a commercial lawyer?
13 A. Yes .
14 167 Q. And that you were with Guinness & Mahon for seven
15 years approximately?
16 A. Yes .
17 168 Q. And that subsequently you tell us you set up as a
18 financial consultant?
19 A. Yes .
20 169 Q. I imagine that would have, all of that would have,
21 given you an opportunity to understand about back to
22 back arrangements?
23 A. Yes .
24 170 Q. I mean Ms. Mackey was asking you: Did you
25 understand what a back to back arrangement was.
26 MS. MACKEY: No, no. No, I was not.
27 Sorry, Mr. Rowan. What I
28 was asking is: Whether Mr. Forwood knew what was
29 meant by the specific thing and in other words did
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1 he recollect this discussion. What I was asking
2 you, Mr. Forwood, was whether you knew what was
3 being spoken about in this particular minute; namely
4 the split in the differential and whether you
5 recollected the circumstances?
6 A. Well, I think I must have known.
7
8
MS. MACKEY: Yes. Whether you
recollect it now really is
9 what I want to know?
10 A. No, I don't recollect it.
11 MS. MACKEY: Yes.
12 171 Q. MR. ROWAN: What I was trying to
13 establish was that you
14 understood even if you do not recollect the
15 particular discussion but you understand what
16 this minute is saying (Exhibit 10)?
17 A. I have given you my interpretation of it.
18 172 Q. What is the reference to "any differential"?
19 A. Well, presumably the interest rate charged on the
20 loan would have been higher than the interest rate
21 allowed on the deposit.
22 173 Q. Yes?
23 A. So, there would be a differential.
24 174 Q. Right?
25 A. I mean that is my interpretation.
26 175 Q. All right. The Cayman Islands and Guinness Mahon
27 Cayman Trust was involved in arrangements involving
28 back to back lending?
29 A. Well, that is what this suggests (Exhibit 10)
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2 176 Q. Okay. So, that is one of the services?
3 A. Yes.
4 177 Q. Page 131 (Same Handed). This is Minute 667/8 of
5 February 1972 (Exhibit 11)?
6 A. Yes.
7 178 Q. And it is the bottom of the minute?
8 A. Yes.
9 179 Q. Where Mr. Traynor is reporting that he has had a
10 series of meetings with John Furze and Kennedy
11 Crowley.
12 "There have been a number of enquiriesabout setting up Discretionary
13 Settlements."
14
15 Can you recall anything about that minute (Exhibit
16 11)?
17 A. No.
18 180 Q. Can you express some views as to what the meaning
19 of it is?
20 A. I don't know whether I can really. I can't
21 elaborate on what is said there (indicating)
22 (Exhibit 11).
23 181 Q. Who is Kennedy Crowley?
24 A. They are a firm of chartered accountants.
25 182 Q. I see, right?
26 A. I presume they still are; aren't they?
27 183 Q. Yes. It says there have been a number of enquiries
28 about setting up discretionary settlements. That
29 was in 1972?
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1 A. Yes .
2 184 Q. Was that when the prospect of providing
3 Discretionary Settlements or Discretionary Trusts
4 started to become important to Guinness & Mahon and
5 Guinness Mahon Cayman Trust?
6 A. I don't know. If I saw this at the time, which I
7 guess I did, it was 28 years ago. I have no idea.
8 185 Q. However, you are familiar with the topic of a
9 discretionary trusts; are you not?
10 A. Yes .
11 186 Q. Yes. So, this seems to suggest, does it not,
12 that Guinness Mahon Cayman Trust were also
13 involved in the idea of promoting discretionary
14 trusts ?
15 A. So it suggests.
16 187 Q. In 1972?
17 A. Yes .
18 188 Q. Right. Page 13 (Same Handed) (Exhibit 1). Going
19 back to your statement, to the Authorised Officer,
20 at point number five at the bottom of page 2 of
21 that?
22 A. Yes .
23 189 Q. You say:
24
25
"In or about 1973 Maurice O'Kelly wasinvited to join the Bank and in effectbecame a fourth Co-Managing Director."
26 190 Q. What was the reason for that appointment?
27 A. He was a friend of Mr. Traynor. He had practised
28 as a Chartered Accountant. I think he may have
29 been articled to Haughey Boland; I can't remember.
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1 He practised as a Chartered Accountant in
2 Hong Kong and again I think this was the time
3 when George Mahon was insisting on retiring and
4 again we thought there was room for a vacancy and
5 this I do remember; that there was a very strong
6 recommendation from Mr. Traynor to take him on.
7 191 Q. What did Mr. 0'Kelly bring to the Bank?
8 A. He was a Chartered Accountant.
9 192 Q. Was he a Banker?
10 A. No.
11 193 Q. Yes?
12 A. We were very short on bankers.
13 194 Q. Did he bring with him a business of some sort?
14 A. No.
15 195 Q. Okay. When he arrived: Did that change
16 responsibilities ?
17 A. To an extent inevitably but we never had five in the
18 room but we had four.
19 196 Q. After Mr. 0'Kelly settled in did any one become
20 slightly more dominant than the others?
21 A. Well, John Guinness was the Chairman. Although my
22 experience was short it was longer than that of the
23 others but I suppose I have to confess looking back
24 on it that Mr. Traynor was very a very dominant
25 personality.
26 197 Q. How did that show itself?
27 A. He was rather inclined to do his own thing perhaps
28 with less consultation than others of us would have
29 thought desirable. You know that this is not
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2 is so.
3 198 Q. At around that time in the 1970's I believe
4 it is correct in saying that Mr. Traynor was
5 a Co-Managing Director and he also, I believe,
6 may have been the Chairman of Cayman at that time?
7 A. I guess he probably was.
8 199 Q. Yes?
9 A. That was certainly in his province.
10 200 Q. Yes. Did any one feel that that was quite a
11 lot of power vesting in one individual?
12 A. No, I don't think so.
13 201 Q. Right. You then say:
14 "In 1976 I decided to discontinue myemployment with the Bank and resigned
15 as a Director."
16 What prompted you to leave?
17 A. I would say there were two principal reasons.
18 The first: We had succeeded in expanding our
19 business and I think the work we did was recognised
20 as quality work particularly, I would like to think,
21 in my own field. The clearing banks, the Bank
22 of Ireland and Allied Irish Banks, both set up
23 subsidiaries as Merchant Banks. We discovered that
24 they had enormous power to direct their banking
25 clients to their Merchant Banking subsidiaries and
26 I came to the conclusion that we must cut back and
27 that either Des Traynor or I ought to withdraw.
28 Now, that is number one.
29 202 Q. Yes?
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2 had been a so-called merger in London between
3 Guinness Mahon, the Bank, and a company called Lewis
4 & Peat. I remember the name well. Lewis & Peat
5 were commodity brokers I think. The boss man
6 was a fellow called Kissin, K-i-s-s-i-n, who came
7 originally from Danzig. I didn't like him and have
8 no reason to suppose he liked me either. What
9 particularly offended me was a very strong rumour
10 that he was about to be ennobled by Harold Wilson,
11 who was at that time Prime Minister in England,
12 for a reason which I would have regarded as
13 discreditable and I was happy that I should go
14 and Des should stay.
15 203 Q. In any event you decided to withdraw?
16 A. To withdraw.
17 204 Q. And you say that (Exhibit 1):
18 "Thereafter, the only contact I had
19 with the Bank was as a tenant from 1976
20 to 1978 of a small office in a separate
21 building near the Bank's College Green
22 premises from which I carried on a
23 practice as a Financial and Legal
24 Consultant."
25
26 So, you had no contact with Guinness & Mahon
27 after that time?
28 A. No.
29 205 Q. None?
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2 206 Q. You make a statement?
3 A. Yes.
4 207 Q. And I just wondered whether that statement is
5 comprehensive?
6 A. Yes.
7 208 Q. It is?
8 A. I think so.
9 209 Q. Did you ever?
10 A. Unless I have misunderstood what you are saying.
11 210 Q. I mean were you ever invited to act as a
12 non-executive Director for instance on any of
13 the equity adventures which Guinness & Mahon
14 were involved in?
15 A. No, no.
16 211 Q. Did you ever get asked for advice by any one in
17 Guinness & Mahon; particularly Mr. Traynor?
18 A. I think markedly not. I thought I might have
19 been but I wasn't.
20 212 Q. Right. So that after you left, as I understand it,
21 there was a change in the management structure.
22 Are you aware of that? Mr. Traynor became the
23 Deputy Chairman and Managing Director?
24 A. I might have been aware of it at the time.
25 213 Q. Yes?
26 A. Incidentally I left out one small thing.
27 214 Q. Yes?
28 A. In reply to your previous question as to why I
29 left the Bank.
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2 A. I had been offered another job which sounded a very
3 attractive one and for a strange reason this fell
4 through and that is why I set myself up as a
5 Financial and Legal Consultant; whatever that may
6 mean. I didn't really know.
7 216 Q. Okay?
8 A. I waited for people to come to me.
9 217 Q. Okay. Finally, from my end of things: Did you
10 come across a man called Jack Stakelum?
11 A. Yes.
12 218 Q. Were you aware of his relationship with Mr. Traynor,
13 Guinness & Mahon and Cayman?
14 A. No. Well, I can remember that he was a partner
15 in Haughey Boland and I think was very close to
16 Mr. Traynor. I was not aware that he had any
17 connection with the Cayman company nor indeed would
18 I have been aware that he had any connection with
19 Guinness & Mahon.
20 219 Q. I see. Okay. Thank you very much. Ms. Mackey
21 will take over some of the questions.
22
23 END OF EXAMINATION OF MR. Forwood BY MR. ROWAN:
24
25
26
27
28
29
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1 MR. FORWOOD WAS EXAMINED AS FOLLOWS BY MS. MACKEY:
2
3
4 220 Q. MS. MACKEY: Mr. Forwood, as you know,
5 as I think we explained to
6 you, we are investigating "Ansbacher" Cayman and one
7 of the things that we have been asked by the High
8 Court to do?
9 A. Yes.
10 221 Q. Is to identify the clients of "Ansbacher" Cayman?
11 A. Yes.
12 222 Q. And it is really in that general area that I wanted
13 to ask you some questions. Can you hear me all
14 right?
15 A. Well.
16 223 Q. I can sit up nearer to you if it is any better?
17 A. I am going to try what I call my Irish hearing aid
18 and I am going to try -- it sounds terribly sexist
19 but...(INTERJECTION).
20 224 Q. A woman's voice is lighter?
21 A. It is known as high tone deafness which means I am
22 much better on men than I am on women.
23 225 Q. Would it be better if I sat nearer?
24 A. Actually it is not working too badly.
25 226 Q. Is it?
26 A. Yes.
27 227 Q. Good. Had you heard what I said there a few moments
28 ago?
29 A. Yes.
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1 228 Q. That we are to identify the clients?
2 A. I think so.
3 229 Q. So, it is in that connection that I now want to ask
4 you some questions.
5 A. Yes .
6 230 Q. During the time that you were in Guinness & Mahon
7
8
was the phrase suitably secured in the use that it
subsequently became? Were you familiar with the
9 phrase suitably secured as applied to a loan?
10 A. I never heard the phrase until somebody wrote to me
11 recently.
12 231 Q. I see. The evidence we have been given on oath by
13 the current management of Guinness & Mahon?
14 A. Yes .
15 232 Q. On behalf of them?
16 A. Yes .
17 233 Q. Is that that phrase was used to describe a loan that
18 was secured by a deposit with an off-shore
19 subsidiary of Guinness & Mahon. That could be an
20 off-shore subsidiary?
21 A. Yes .
22 234 Q. However, when they did not wish the fact of the real
23 security to appear on the documents they used the
24 phrase suitably secured normally in inverted commas?
25 A. Yes .
26 235 Q. Can I ask you to look at page 33, please (Same
27 Handed) (Exhibit 12). Just the first page actually
28 of it. This is an internal Guinness & Mahon
29 document in relation to a loan which, or two --
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2 received in or around 1978 I think; from the dates
3 within. If you look at the very final one "Number
4 two special account"? You see that at the bottom?
5 A. Yes.
6 236 Q. You see a loan and a figure and then in brackets
7 or in inverted commas the phrase suitably secured?
8 A. Yes.
9 237 Q. On the face of it, and according to the
10 evidence given by Guinness & Mahon to us, that
11 would indicate that that was secured on a deposit
12 that you or somebody belonging to you had with an
13 off-shore subsidiary with Guinness & Mahon. Our
14 only concern and the only reason we are asking you
15 about it at all is to see whether that deposit was
16 with "Ansbacher" Cayman or if it was with the
17 subsidiary in the Channel Islands because there was
18 subsequently at a later date a link between deposits
19 in the Channel Islands and deposits in Cayman. So,
20 I have to ask you: Did you in fact have a deposit
21 with "Ansbacher" Cayman or a trust?
22 A. No, is my answer to that.
23 238 Q. No?
24 A. No.
25 239 Q. No. Did you then have a deposit or a trust in the
26 Channel Islands managed by College Trustees because
27 there will be a link?
28 A. Can you tell me: College Trustees...(INTERJECTION).
29 240 Q. Yes?
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1 A. The name is familiar and I thought that it was the
2 trustee company we had in Dublin.
3 241 Q. No?
4 A. That was so named after College Green but it was in
5 the Channel Islands.
6 242 Q. It was in the Channel Islands. Actually,
7
8
Mr. Forwood, I will just explain to you why I would
even ask you about a Channel Islands situation?
9 A. Yes .
10 243 Q. What we have learned is that Irish residents
11 deposited money or formed trusts in the Channel
12 Islands ?
13 A. Yes .
14 244 Q. Which was perfectly legitimate at the time?
15 A. Yes .
16 245 Q. And College Trustees was the manager of the
17 Guinness & Mahon subsidiaries out there and of the
18 trust Companies. They managed the trust funds?
19 A. Yes .
20 246 Q. And up to about 1981 they deposited those trust
21 funds normally in banks in the Channel Islands?
22 A. Yes .
23 247 Q. However, between 1981 and 1989 it appears that
24 College Trustees often unknown to its own clients
25 deposited their funds, the Irish funds, with
26 "Ansbacher" Cayman?
27 A. Right.
28 248 Q. As a result of which many people who were really
29 Channel Islands Clients if you like became
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2 A. Yes.
3 249 Q. Often unknown to themselves?
4 A. Well, I mean that I didn't know but I had a trust.
5 250 Q. Yes?
6 A. In the Channel Islands.
7 251 Q. Yes?
8 A. I thought the trustee was called Guinness Mahon
9 Guernsey Trust.
10 252 Q. That would be right, yes. College...(INTERJECTION)?
11 A. Did it change its name?
12 253 Q. No, it did not. However, College Trustees
13 effectively managed the funds for Guinness Mahon
14 Guernsey Trust?
15 A. Yes. What I would like to do is take a couple of
16 minutes to tell you about this Jersey Trust.
17 254 Q. Certainly, yes?
18 A. I will be as brief as I can. My father-in-law died
19 in January 1961 and left his Estate on very loose
20 Discretionary Trusts but the intention evidently
21 was that the beneficiaries should be his three
22 children.
23 255 Q. Yes?
24 A. My wife, her sister and her brother.
25 256 Q. Yes?
26 A. After payment of Estate Duty there wasn't a lot
27 left except for a farm in Buckinghamshire.
28 257 Q. Yes?
29 A. In or about 1969 or 1970 my wife was approached by
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1 her brother and her sister and indeed her mother
2 who was still alive.
3 258 Q. Yes?
4 A. And a proposition was put involving the payment
5 out of, well, it wasn't payment because it wasn't
6 money but the appointment out of this asset, in fact
7
8
my wife and myself for some reason, on condition
that we should then immediately reappoint or
9 re-settle on various Jersey Trusts for the benefit
10 of the three of them. I demurred and I still have
11 a copy I think of a letter which I then wrote
12 giving nine good reasons why this should not happen
13 but at the end of the day for the sake of family
14 relationships we agreed and this was done and my
15 wife --
16 259 Q. Yes?
17 A. There was a company called Armagh Holdings Limited.
18 260 Q. Yes?
19 A. And it issued shares and my wife had a third of
20 these shares.
21 261 Q. Yes?
22 A. And they were settled on a Channel Islands trust
23 and the trustees would have been Guinness Mahon
24 Jersey and I readily believe it became College
25 Trustees. Now, that asset was valuable but produced
26 negligible income.
27 262Q.
Yes?
28 A. And I have an idea that I may well have myself
29 at that time added other assets; in particular
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1 undivided shares in another farm in Buckinghamshire
2 which produced negligible income.
3 263 Q. Yes.
4 A. And that so remained until we came over here.
5 264 Q. Yes?
6 A. Which was in 1993.
7 265 Q. Yes. So, is the trust still in existence or was
8 it wound up in 1993?
9 A. It was wound up.
10 266 Q. Yes?
11 A. I mean this has been a source of much family trouble
12 and grief.
13 267 Q. Yes. I do not want to make you relive any of that?
14 A. But I think the whole thing is going to be solved
15 quite soon.
16 268 Q. Right. Really.
17 A. After 40 years.
18 269 Q. My heavens. Thank you for that explanation. Really
19 what I am anxious to ascertain is: Do you think now
20 looking at the documents (Exhibit 12) that I just
21 gave you that the reference to "suitably secured"
22 there is to the money that you had in fact at the
23 time in the Channel Islands?
24 A. No.
25 270 Q. You do not?
2 6 A. I don't.
27 271 Q. Then what do you think it might refer to?
28 A. Well, just jumping ahead for a second.
29 272 Q. Yes?
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2 Securities.
3 273 Q. Yes, I was going to come to that?
4 A. I know you are.
5 274 Q. Right?
6 A. But I have actually written, you know, having
7 been reminded what York Securities was, I
8 was completely barking up the wrong tree on
9 that one.
10 275 Q. Fine. Yes?
11 A. I have written a little note which I shall read
12 you in due course.
13 276 Q. Fine?
14 A. In which I give my theory as to what that means
15 (indicating).
16 277 Q. Perhaps, you would like to do that now and we can
17 get on to York Securities?
18 A. Can I?
19 278 Q. Yes, that would be fine?
20 A. I just wonder all the same whether this is going
21 to throw out your line of questioning.
22 279 Q. It will not?
23 A. Because there is quite a bit of this.
24 280 Q. It will not, Mr. Forwood, because I actually wanted,
25 all I wanted to know at that point, was whether you
2 6 had a Cayman trust that was backing your own loan.
27 You tell me you had not?
28 A. No.
29 281 Q. You explained about the Channel Islands ones and you
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1 now think that your explanation for York Securities
2 may explain the "suitably secured" here reference
3 (Exhibit 12) (indicating)?
4 A. Yes .
5 282 Q. So, if it fits in fine?
6 A. Yes. So, shall I.
7 283 Q. Please, yes?
8 A. Again, I think I must go back. When I came to
9 Ireland I saw advertised a house which I fell in
10 love with. It was a big rather dilapidated house
11 with 260 acres of land.
12 284 Q. Yes?
13 A. And I agreed to buy it and then discovered that
14 the Land Commission had, as they were then entitled
15 to do, said they wanted it. I went to see the Land
16 Commission and said, "Do you really want this
17 dilapidated house," and they said, "No," and I said,
18 "If I take the house how much land will you allow me
19 to keep," and eventually it came down to 100 acres
20 which was largely rough woodland.
21 285 Q. Yes?
22 A. I had to buy the whole thing and then sell them for
23 £150 an acre 150 acres. It was always my ambition
24 to recover what I had been deprived of because it
25 made a delightful whole. The Land Commission was
26 supposed to distribute this land among local farmers
27 who hadn't got enough land for a viable holding but
28 they didn't. When they were disbanded they sold the
29 land to the Wicklow County Council and they didn't
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1 distribute it either.
2 286 Q. Yes?
3 A. At a certain stage, which could have been 1974,
4 150 acres which was just over the wall came up for
5 sale and I thought if I could acquire this I could
6 then go to Land Commission, I think by this stage
7
8
it was the Wicklow County Council, and offer them
a swap because the land I was hoping to acquire was
9 better land.
10 287 Q. Right?
11 A. Now, before the auction a fellow came to see the
12 Bank looking for a loan and he explained that
13 he wanted to bid for this land which was very
14 embarrassing for me because had I simply turned him
15 down he would have said or might have said, I am
16 sure he would have said, that it was because I was
17 trying to eliminate a competitor.
18 288 Q. Yes?
19 A. So, I said I would see him and I said, "Why do you
20 want this land," and he said he had reason to
21 suppose that he could get planning permission on
22 a corner of it to build little houses. So, I said,
23 "All right then. Why don't we bid together? You
24 want 15 acres and I shall have the rest".
25 289 Q. Yes?
26 A. "And you pay a tenth of the price".
27 290Q.
Yes?
28 A. That is what happened.
29 291 Q. Yes. Who was this gentleman?
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2 292 Q. Yes?
3 A. Of whom I hadn't previously heard, you see?
4 293 Q. Yes?
5 A. Some years later I think I was approached again
6 by Nulty who said that the planning permission
7 would be easier to obtain if part of my land were
8 incorporated in it and at that time probably he
9 introduced me to two people called Rhatigan.
10 294 Q. Yes?
11 A. Anthony and Brian Rhatigan.
12 295 Q. Yes?
13 A. And in retrospect I think Nulty's, you know -- his
14 job may have been to find developable land for them.
15 296 Q. Yes?
16 A. Now, I said, "All right." It seemed, you know,
17 likely to be a profitable arrangement and a
18 company was formed and I think it was a
19 shelf company.
20 297 Q. Yes?
21 A. Which is why the name meant nothing to me. I
22 always talked about Kilquade where the land was.
23 298 Q. Yes?
24 A. And I fancy I conveyed my land and they conveyed
25 their bit of land.
26 299 Q. Yes?
27 A. To this company.
28 300 Q. Yes?
29 A. In consideration of the issue of shares.
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2 A. And because I had more land than they had; I
3 had slightly more than a third.
4 302 Q. Yes?
5 A. Now, the planning permission was obtained. It may
6 already have been obtained. Any way it was there.
7 303 Q. Yes?
8 A. And it was for quite a large number of houses.
9 I can't remember how many but I would say at
10 least fifty.
11 304 Q. Yes?
12 A. And the idea was to put in what they called
13 infrastructure.
14 305 Q. Yes?
15 A. And then sell individual sites.
16 306 Q. Yes?
17 A. And money was borrowed by the company.
18 307 Q. From Guinness & Mahon?
19 A. Well, I have got here (indicating) an extract from
20 the Company's register.
21 308 Q. Yes?
22 A. And it's evident that money was borrowed from
23 Guinness & Mahon.
24 309 Q. Yes?
25 A. I don't know whether you have seen this
26 (indicating)?
27 310 Q. I think we have?
28 A. You have?
29 311 Q. Yes?
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2 is one in 1978 which could be right; money borrowed
3 from Northern Bank Finance Corporation.
4 312 Q. Yes?
5 A. Paid off in 1982.
6 313 Q. Yes?
7 A. And then there is another one; again, Northern Bank
8 Finance Corporation.
9 314 Q. In any event we need not concern ourselves with
10 those?
11 A. Sorry?
12 315 Q. We need not concern ourselves with the various
13 loans?
14 A. Right.
15 316 Q. In any event money was borrowed?
16 A. Yes.
17 317 Q. Yes.
18 A. It says here 1st October 1987.
19 318 Q. Yes. Yes?
20 A. Now, if I could just read from my note at this
21 stage?
22 319 Q. Yes?
23 A. Money was needed to complete infrastructure
24 and it is evident that it was borrowed from
25 Guinness & Mahon.
26 320 Q. Yes?
27 A. The security I am quite sure was the partially
28 developed land backed by personal guarantees.
29 321 Q. Yes?
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1 A. I think I remember refusing a joint and several
2 guarantee.
3 322 Q. Yes?
4 A. So that mine was confined to my appropriate
5 proportion.
6 323 Q. Yes?
7
8
A. This in turn was supported I suspect by an equitable
mortgage by deposit of title deeds of my house and
9 land at Woodstock.
10 324 Q. Yes?
11 A. Worth many times my potential liability.
12 325 Q. Yes?
13 A. No other security could possibly have been required.
14 326 Q. Yes?
15 A. The Inspectors seem to believe that the expression
16 suitably secured is some kind of code denoting
17 backing for a source outside the Country.
18 327 Q. Yes?
19 A. I don't believe this, sorry I have to say,
20 and have another theory.
21 328 Q. Yes?
22 A. JD. Traynor had many qualities but he was
23 (a) secretive, and (b) dictatorial. I think that
24 if he was personally satisfied that a loan was
25 adequately secured he would have issued an edict
26 accordingly.
27 329Q.
Yes?
28 A. And this may have been expressed as suitably
29 secured.
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2 A. What arrangements the Rhatigan's may have made I
3 probably did not know and certainly do not know now.
4 331 Q. Yes?
5 A. So, the development from my point of view was
6 not a success. The end of the story was that Tony
7 Rhatigan and I were bought out by Brian Rhatigan
8 yes.
9 A. I think for a pound a piece.
10 332 Q. Yes?
11 A. He, Brian, however made arrangements to release us
12 from our potential liabilities. I simply lost
13 my bit of land and probably some money as well.
14 333 Q. Yes. Mr. Forwood?
15 A. Now, that is the York Securities story.
16 334 Q. Thank you very much. Can I show you some documents
17 relating to York Securities?
18 A. Yes.
19 335 Q. And may be we can work out what is meant by these
20 documents. Page 46, Mary, please? (Same Handed)
21 (Exhibit 13). This is an internal Guinness & Mahon
22 document and it is related as you can see to three
23 loans given to York Securities?
24 A. Yes.
25 336 Q. You see what it says in relation to Number three
26 loan?
27 A. Backers 2 and 3.
28 337 Q. Yes, yes. Under Number three:
29 "We consider this security to beadequate in all cases."
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Do you see that
2
3 A. Yes.
4 338 Q. And then:
5"This loan is cash backed"?
6
7 A. Well, I don't think it was in my case.
8 339 Q. Yes?
9 A. But I can give you two reasons.
10 340 Q. Yes?
11 A. For thinking that it was not.
12 341 Q. Yes?
13 A. One is that I don't believe the cash was there.
14 342 Q. You do not believe?
15 A. The cash was there.
16 343 Q. Yes?
17 A. Because this Jersey trust had valuable assets
18 but they weren't cash.
19 344 Q. Yes?
20 A. And the other is that my wife and I were
21 discretionary beneficiaries under this trust.
22 345 Q. Yes?
23 A. Together with our children and possibly charities;
2 4 I don't know.
25 346 Q. Yes?
26 A. It would have been possible for the trustee.
27 347 Q. Yes?
28 A. To exercise his discretion and pay, you know, hand
29 over, the assets to us.
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2 A. Which is what eventually happened.
3 349 Q. Yes?
4 A. But the trustee would not.
5 350 Q. Yes?
6 A. Have the discretion or authority.
7 351 Q. Yes?
8 A. To use his assets.
9 352 Q. Yes?
10 A. To back a borrowing.
11 353 Q. I understand that. Can I show you another page?
12 It is page 49, please. (Same Handed) (Exhibit 14)
13 This is an extract from a report made by Guinness &
14 Mahon to the Central Bank of Ireland and this is an
15 Appendix to that report and it is described as
16 "loans set off against deposit accounts." Do you see
17 that?
18 A. Yes.
19 354 Q. And under Irish pound loans we have, one, two,
20 three, four, five, six down you see:
21
"Rockford Investments/York Securities."
22
23 Do you see that?
24 A. Yes.
25 355 Q. That is under the heading of loans set off against
26 deposit accounts. So, again we have a reference to
27 York Securities, in the mind of Guinness & Mahon in
28 any event, being backed by cash but you cannot give
29 me any explanation for that?
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2 356 Q. Is Rockford Investments...?
3 A. Yes.
4 357 Q. A familiar name?
5 A. I mean I had forgotten the name.
6 358 Q. I was going to ask you about that as well?
7 A. But that was it. That could not have been done
8 with my authority.
9 359 Q. What was Rockford Investments, Mr. Forwood?
10 A. Well, I fancy it was the name given to this trust
11 in the Channel Islands.
12 360 Q. That was the name of your trust?
13 A. Yes, I think so.
14 361 Q. I see, I see. So, that does seem to indicate that
15 it was linked then with York; does it not?
16 A. It does.
17 362 Q. In relation to cash?
18 A. It does.
19 363 Q. Yes. However, not with your authority?
20 A. No.
21 364 Q. I see. It has been our experience in investigating
22 this whole business that in many cases where a loan
23 proves to have been backed by a deposit abroad the
24 person whose deposit it was was unaware of it?
25 A. Yes.
26 365 Q. It seems to be something that Guinness & Mahon did
27 without consultation. They seemed to have used it
28 as comfort?
29 A. Well, I fear so.
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2 A. I fear so.
3 367 Q. Yes?
4 A. I mean I would have been furious.
5 368 Q. Yes?
6 A. Because it wasn't necessary any way.
7 369 Q. I understand. Can I show you something else now,
8 Mr. Forwood, and it is page 48 (Same Handed)
9 (Exhibit 15)? This is a letter headed "Ansbacher".
10 Do you see that?
11 A. Yes.
12 370 Q. It is signed by Joan Williams who was Mr. Traynor's
13 secretary?
14 A. Yes, I remember.
15 371 Q. I do not know if you ever knew Ms. Williams?
16 A. I remember her well.
17 372 Q. Yes. This was after Mr. Traynor's move to the
18 offices of CRH in Fitzwilliam Square and he is
19 writing from that address, or Joan Williams is,
20 to Irish Intercontinental Bank where "Ansbacher"
21 had an account at that time. They had moved
22 their accounts from Guinness & Mahon in 1991?
23 A. Yes.
24 373 Q. You see this letter:
25
26 "Dear Peter, further to my letter ofyesterday's date the Draft for the
27 sterling equivalent of Ir.£25,000requested therein should be payable
28 to York Securities Limited. Apologiesfor the omission."
29
30
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1
2 What Joan Williams appears to be saying there is
3 that "Ansbacher" has asked for a draft to come
4 from their account in IIB, from "Ansbacher's"
5 account, payable to York Securities. So, what we
6 have is "Ansbacher" paying York Securities funds.
7
8
It appears as if York Securities had some right
to draw funds from "Ansbacher" in 1991?
9 A. Could I look for a little information from you?
10 374 Q. Certainly?
11 A. Because I think you are much better informed
12 than I am.
13 375 Q. Yes?
14 A. I fancy that I was a Director of York Securities.
15 376 Q. Yes?
16 A. Do you know when I ceased to be a Director of York
17 Securities ?
18 377 Q. I do not know. No, I do not know that. I have an
19 idea it was around the time you left Ireland but I
20 am not certain?
21 A. Well, there is something very odd about this
22 list of charges.
23 378 Q. Right?
24 A. There is one here (indicating) the 3rd May 1990.
25 379 Q. Yes?
26 A. And it is to AIB Finance Limited.
27 380Q.
Yes?
28
29
A. And the particulars of property:
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1 "All that, the property known as Unit 8and 2 acres at Dunleer Industrial
2 Estate, Drogheda, County Louth,comprised in folio..."
3
4 Such and such. Now, I have never heard of that.
5 381 Q. Yes?
6 A. And I think that must have been after.
7 382 Q. After you left?
8 A. I mean there was never anything.
9 383 Q. Yes?
10 A. But Kilquade.
11 384 Q. Yes?
12 A. So that I think I was gone.
13 385 Q. And that was what year?
14 A. May 1990.
15 386 Q. 1990?
16 A. I must have been gone then.
17 387 Q. Can you find out, Mr. Forwood, when you left
18 York Securities? Can you find that out for us?
19 A. Well, does the company register retain such details.
20 388 Q. It should, yes. Yes, you should be able to check
21 it there?
22 A. Because, you know, I asked for it.
23 389 Q. We will check. You did not get it; did you not?
24 A. No.
25 390 Q. We should be able to check that?
26 A. Could you?
27 391 Q. We should be able to?
28 A. I mean I really would be grateful.
29 392 Q. Yes. Yes?
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2 393 Q. Can you check?
3 A. And there is another one, you see?
4 394 Q. However, just leaving that aside for a moment,
5 Mr. Forwood?
6 A. Yes.
7 395 Q. Can you think of any reason, getting back to the
8 letter I just showed you (indicating) (Exhibit 15),
9 why York Securities would be getting a payment, just
10 supposing it was within your time?
11 A. Yes.
12 396 Q. Can you think of any reason why York Securities
13 would be entailed to draw money from "Ansbacher"?
14 A. None whatsoever but I suspect that it wasn't in
15 my time. You see there is another one here
16 (indicating).
17 397 Q. Yes?
18 A. A borrowing from AIB Finance Limited.
19 398 Q. Yes?
20 A. 3rd January 1991.
21 399 Q. Yes?
22 A. Now, I know nothing whatsoever about a borrowing
23 from AIB Finance Limited.
24 400 Q. Yes, yes?
25 A. You see at that time the borrowing from Guinness &
26 Mahon had not been repaid.
27 401 Q. Yes, yes. Can I say one thing to you, Mr. Forwood:
28 We have spoken to both Brian and Anthony Rhatigan?
29 A. Yes.
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2 A. Yes.
3 403 Q. And we asked them questions?
4 A. Yes.
5 404 Q. And we put to Brian Rhatigan this draft in 1991
6 (Exhibit 15)?
7 A. Yes.
8 4 05 Q. And this payment out of "Ansbacher"?
9 A. Yes.
10 406 Q. And we asked him if he could explain it and he
11 said, "No, but that this was not surprising
12 because Mr. Forwood financed York Securities".
13 That was his evidence. We then said, "Well, do you
14 think then Mr. Forwood organised this," and he said,
15 "He was the person with the money. We didn't have
16 money. He was the financier and the banker." So,
17 I put that to you as the evidence we have to date
18 and that is the reason I am asking you about it?
19 A. All right.
20 407 Q. I am being totally honest with you?
21 A. Well, I certainly can say I'm speechless. I mean I
22 am not a property developer by trade.
23 408 Q. Yes?
24 A. I have explained how I got involved in this affair.
25 409 Q. Yes?
26 A. I was desperately interested in the sale of sites
27 and celebrated every time one was sold.
28 410 Q. Yes?
29 A. But that was my part.
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1 411 Q. Well.
2 A. And I was not a rich man and I would have thought
3 that the Rhatigan brothers, well they appeared
4 to be...
5 412 Q. They appeared to be?
6 A. Substantial.
7
8
413 Q. There may be a simple explanation for all of this,
Mr. Forwood. It may be what I suggested to you at
9 the beginning; that your Channel Islands funds had
10 in fact been lodged in "Ansbacher" by College
11 Trustees because now that you told me that Rockford
12 is in fact your Channel Islands Company?
13 A. Yes .
14 414 Q. I am going to show you some documents linking
15 Rockford with "Ansbacher"?
16 A. Yes .
17 415 Q. So, it would appear as if that may have happened?
18 A. Yes .
19 416 Q. So, if I could show you first of all page 50 (Same
20 Handed) (Exhibit 16)? We will look at that one
21 first. That is a statement of the account that
22 Guinness Mahon Cayman Trust had in Guinness & Mahon
23 in Dublin after the time that College Trustees began
24 to lodge money with it?
25 A. Yes .
26 417 Q. And the account was entitled:
27
28
29
" Guinness Mahon Cayman Trust/CollegeTrustees".
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1
2 You see it up at the top?
3 A. Yes .
4 418 Q. Right?
5
£
A. And I can see:
o
7
o
"Re: Rockford" .
o
9 419 Q. And you see Rockford there, yes. There is a sum of
10 money. What is it? £2,000 in credit?
11 A. £2,000.
12 420 Q. So, that appears to be a lodgement into Rockford at
13 that time which was then lodged by College Trustees
14 with "Ansbacher" and it turns up in "Ansbacher's"
15 account in Guinness & Mahon in Dublin. So, this
16 is a lodgement in January 1987. Now, you mentioned
17 to us earlier that you transferred some funds from
18 time to time or assets to the trust yourself?
19 A. Yes .
20 421 Q. Could you have done so in 1987? Would that ring any
21 bell with you?
22 A. No.
23 422 Q. No?
24 A. Could I? I don't think so.
25 423 Q. You do not think so?
26 A. No.
27 424Q.
Because this is certainly a lodgement. This
28 is something for the benefit of Rockford here
29 (indicating) from what appears (Exhibit 16)?
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2 425 Q. Could anyone else be dealing with Rockford's
3 affairs other than yourself? Is that possible?
4 A. I mean Rockford.
5 426 Q. Yes?
6 A. Was administered by, well, I now know, College
7 Trustees.
8 427 Q. Yes?
9 A. And presumably I knew then.
10 428 Q. Yes. However, may be you did not?
11 A. But it was a Channel Islands set-up.
12 429 Q. Yes, yes. However, as I explained to you
13 College Trustees.
14 A. Yes.
15 430 Q. Deposited the funds?
16 A. Yes.
17 431 Q. Unknown?
18 A. Yes.
19 432 Q. Unknown quite frequently?
20 A. Yes.
21 433 Q. And here is another example of it?
22 A. Yes.
23 434 Q. To the client?
24 A. Yes.
25 435 Q. I will just show you another Rockford connection
26 and that is page 51 and 52 (Same Handed) (Exhibit 17
27 & 18). Again, is that 51 you are looking at there
28 (Exhibit 17), Mr. Forwood?
29 A. Wait a minute?
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2 A. This one (indicating) (Exhibit 17).
3 437 Q. Yes?
4 A. Okay.
5 438 Q. It is a letter from Joan Williams to IIB lodging
6 a cheque to "Ansbacher's" account. Do you see that?
7 A. Yes.
8 439 Q. And the cheque is then overleaf (indicating)
9 (Exhibit 18)?
10 A. Yes.
11 440 Q. And you see what it is?
12 A. Ye.
13 441 Q. It is a cheque, a revenue cheque in fact,
14 payable to Rockford and it is being lodged into
15 "Ansbacher's" account. So, I think the conclusion
16 that we have come to is probably the correct one;
17 that College Trustees had in fact moved Rockford's
18 funds into "Ansbacher" ?
19 A. Yes.
20 442 Q. That appears during the period which they did that?
21 A. Yes.
22 443 Q. That seems to be the case?
23 A. Yes.
24 444 Q. For all of their clients?
25 A. Yes.
26 445 Q. So that might explain the "Ansbacher" connection
27 to York Securities as well. That may explain the
28 "Ansbacher" backing for York Securities?
29 A. Yes.
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2 in connection with York Securities?
3 A. But I should have been absolutely furious.
4 447 Q. You would?
5 A. Apart?
6 448 Q. As many clients were?
7 A. Apart from the fact.
8 449 Q. Yes?
9 A. That the amount astonishes me.
10 450 Q. Yes?
11 A. But I can't challenge that.
12 451 Q. Yes?
13 A. Because although these assets were not income
14 producing.
15 452 Q. Yes?
16 A. There were occasional disposals.
17 453 Q. Yes?
18 A. So that, you know.
19 454 Q. There would have been funds?
20 A. There could have been.
21 455 Q. Yes?
22 A. I can think of one.
23 456 Q. Yes?
24 A. Which was substantial.
25 457 Q. Yes. I think that explains that?
26 A. I mean why should I authorise this (indicating)
27 (Exhibit 14)? I had given them my lands as
28 security.
29 458 Q. You did not?
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2 459 Q. You did not authorise this?
3 A. I don't know how much the total borrowing was.
4 460 Q. Yes?
5 A. But my share of it was little more than a third.
6 461 Q. Yes. I think the way Guinness & Mahon were looking
7 at it was, "Here is a company asking us for a loan"?
8 A. Yes.
9 4 62 Q. "We know that one of the shareholders has funds
10 off-shore. We take comfort from that. We already
11 have other security"?
12 A. Yes.
13 463 Q. Title Deeds and guarantees and so on?
14 A. Yes.
15 464 Q. That was the way they operated as far as we can see?
16 A. Yes.
17 465 Q. And so for their own books they were quite satisfied
18 that in the heel of the hunt, if you know push came
19 to shove, there was money off-shore?
20 A. Yes.
21 466 Q. And the client did not know this at all?
22 A. Right.
23 467 Q. That appears to be the case. I think that
24 satisfies me as to what all this is about?
25 A. Yes.
26 468 Q. I think that is clear?
27 A. Yes.
28 469 Q. There is just one other question I want to ask you:
2 9 Do you know anything about a company called
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2 A. No.
3 470 Q. That does not ring any bell?
4 A. No.
5 471 Q. I do not think it is anything to do with you?
6 A. Northgate Investments: Definitely not.
7 472 Q. Not. Yes?
8 A. Marlborough Holdings.
9 473 Q. Let me just see now?
10 A. Can you give me any information.
11 474 Q. It is a company of which you were a director
12 but I think you may well have been a director
13 purely because the Board of Guinness & Mahon was
14 represented on it. It was a company connected
15 with Liam McGonagle; Ken 0'Reilly-Hyland;
16 Des Traynor; Owen Ryan; and yourself and it
17 carried out property development in Marlborough
18 Street in Dublin. I think it is quite possible
19 that you were on the board there?
20 A. Yes.
21 475 Q. Solely as a respective of Guinness & Mahon?
22 A. Yes.
23 476 Q. I do not think we need worry about that?
24 A. I suspect... (INTERJECTION) .
25 477 Q. I think that is the case?
2 6 A. I can't remember where Marlborough Street in
27 Dublin is.
28 478 Q. The final question I want to ask, Mr. Forwood, is on
29 page 86 (Same Handed) (Exhibit 18). Mr. Forwood, if
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1 you would like to keep these documents we have made
2 these copies for you?
3 A. That is all right.
4 479 Q. You are welcome to take them home if you wish?
5 A. Well...
6 480 Q. Whatever you like yourself. You can leave them
7 here if you want?
8 A. I would like to say yes.
9 481 Q. Whatever you would like to do?
10 A. Yes.
11 482 Q. This is an internal memo from Guinness & Mahon
12 (indicating) again of October 1981 (Exhibit 18)?
13 A. Yes.
14 483 Q. It is in relation to rules they were formulating
15 about when to dispose or retain documents?
16 A. Yes.
17 484 Q. The only one that need concern us is Number 4 down
18 at the bottom; the second Number 4. The number 4
19 in brackets. The final item. Do you see this?
20 A. Yes.
21 485 Q. It says:
22
23 "Filing at Woodstock: JAW will talkto William Forwood regarding the filing
24 in Woodstock and about the removal ofold files and replacement of new ones."
25
26
27 Woodstock: Was that the name of your home,
28 Mr. Forwood?
29 A. Yes.
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2 Guinness & Mahon were actually kept in Woodstock?
3 A. Yes.
4 487 Q. That is the reference there (indicating) (Exhibit
5 18) ?
6 A. Yes.
7 488 Q. Was there a reason for this? Were they particular
8 files?
9 A. I think this must have started, there was
10 17 rooms in the basement, when I was still
11 with Guinness & Mahon.
12 489 Q. Yes?
13 A. And when I left Guinness & Mahon I said,
14 "Well, you are welcome to keep them there."
15 490 Q. Right?
16 A. I was not paid rent.
17 491 Q. You were not?
18 A. Paid a rent.
19 492 Q. Yes, I see?
20 A. But I was bought a dehumidifier.
21 493 Q. I see?
22 A. At least I was lent a dehumidifier which
23 I subsequently kept.
24 494 Q. Yes. They were not particular files of Guinness &
25 Mahon?
26 A. I have no idea.
27 495 Q. They just used the storage?
28 A. There were a lot of them.
29 496 Q. I see. So, they were nothing that you had any
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2 A. No.
3 497 Q. No, fine?
4 A. Well, not so far as I am aware.
5 498 Q. That is grand?
6 A. There were a lot of them and I never looked at one
7 of them.
8 499 Q. Right. Mr. Forwood, I have no further questions to
9 ask you. Have you any winding up ones?
10
11 END OF EXAMINATION OF MR. FORWOOD BY MS. MACKEY:
12
13
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2 MR. ROWAN:
3
4
5 500 Q. MR. ROWAN: I think there was just one
6 question which I perhaps
7 might have asked you when we were talking about the
8 property investment in Cayman?
9 A. Yes.
10 501 Q. In which you had a small interest?
11 A. Yes.
12 502 Q. When you released that interest, Mr. Forwood,
13 what did you do with the proceeds?
14 A. If there were any proceeds. I mean I just can't
15 help you on that. It was a small affair. I think
16 my investment was £1,000 which was worth more then
17 of course.
18 503 Q. We have some information to suggest that Guinness
19 & Mahon believed that the investment would make a
20 profit?
21 A. Yes.
22 504 Q. Generate a profit?
23 A. Yes.
24 505 Q. Of in the region of $200,000?
25 A. I don't think so. I don't think so but of course
26 my share was 1% so I remember that the land in
27 question was in a rather strange name.
28 506 Q. MS. MACKEY: Turin, was it?
29 A. Sorry?
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1 507 Q. MS. MACKEY: Turin?
2 A. No, much stranger than that.
3 MS. MACKEY: I see.
4 A. I am not prepared to disclose it in the presence of
5 ladies.
6 508 Q. MR. ROWAN: Without giving you a copy
7
8
of it there is a minute in
November 1970 which says (Exhibit 19):
9
10
11
12
"Mr. Traynor has just returned from avisit to the Islands. Satisfactoryprogress is being made with thedisposal of parcels of land.Considerable delays have occurred whichare outside Turin's control"?
13 A. How do you spell that?
14 509 Q. T-u-r-i-n's?
15 A. Right.
16 510 Q.
17
18
19
20
"We agreed in principal to extend byperhaps three months certain of thefunds to allow Turin to compensate forthe delays in the past. It looks asif we will make $200,000 profit whichis most satisfactory."
21 So...(INTERJECTION)?
22 A. Would Turin have been a purchaser of sites?
23 Does it appear from that?
24 511 Q. It looked more like someone who was actually acting
25 in the purchase?
26 A. I couldn't possibly see that; could I?
27 MS. MACKEY: Certainly.
28 512 Q. MR. ROWAN: Page 123 (Same Handed)
29 (Exhibit 19)?
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1 A. Thanks.
2 513 Q. This is 166/10?
3 A. I can't actually make head nor tail of this but
4 one possible interpretation is that Turin was a
5 prospective purchaser.
6 514 Q. His name?
7 A. I am...
8 515 Q. Sorry. That name crops up in other minutes?
9 A. Does it?
10 516 Q. Yes. The feel that I have from reading all of
11 those minutes is that whoever or whatever Turin
12 was they were actually involved in disposal of the
13 land?
14 A. Would it?
15 MS. MACKEY: I actually thought it
16 might have been the name
17 of the land.
18 A. Sorry?
19 MS. MACKEY: I thought it might even
20 have been the name of the
21 land. I was not very sure.
22 A. No.
23 MS. MACKEY: No.
24 A. I am prepared to write down the names that I can
25 remember and hand them to Mr. Rowan.
26 MS. MACKEY: You do not want to say
27 them out loud then. It
28 is not Turin then.
29 A. No.
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1 MR. ROWAN: All right.
2 A. It wouldn't be an estate agent; would it?
3 MS. MACKEY: Perhaps.
4 517 Q. MR. ROWAN: They might well be. We do
5 not know who or what they
6 are?
7 A. The name means absolutely nothing to me.
8 518 Q. I see. All right. That is all right, Mr. Forwood.
9 I think that concludes our questions. What will
10 happen now is that Ms. Cummins will supervise
11 the tidying up of this transcript?
12 A. Yes .
13 519 Q. We will require you to read it through and then to
14 sign it and have it notarised. So that we will
15 send you a draft document?
16 A. Yes .
17 520 Q. Hopefully we will have corrected any obvious errors
18 in it and if you are content with that perhaps you
19 would then please follow Ms. Cummins' instructions
20 in due course?
21 A. Yes .
22 521 Q. If you wish to have a copy of it for your own use
23 you can purchase a copy from the firm who looks
24 after the stenography.
25 A. Yes .
26 522 Q. And we can arrange that for you.
27 A. Yes .
28 523 Q. However, you can let Ms. Cummins know that.
29 A. Yes .
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2 MS. MACKEY: Thank you, Mr. Forwood.
3 A. Thank you.
4
5 THE EXAMINATION WAS THEN CONCLUDED.
6
7
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
74
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oOy B Almy/c^^ ,
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Appendix XV (149) (1) (b)
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Appendix XV (149) (1) (c)
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Appendix XV (149) (1) (d)
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A Mtmbtr if At Hvoy AmbaeJter HoUbygt PLC Utrcham Banking Croup
Please reply to:42 Fazwflliam Square,Dublin 2.Tel: 765144/763065Fax: 612035
Garrett Logan, Esq.,Irish Intercontinental Bank Limited,91 Merrion Square,
DUBLIN 2.
P.O. Box H7. (toad Cayman. Briibk Wat IndiaHwa*: (*») 94M<S3M
T«kjc c? 4305Rue (IW) MfrOMt
(W9) 949-3267
Dear Garrett,
Could you please arrange to lodge the enclosed cheque forStg.£t,057.50 to Ansbacher Limited Call Account No.02/01087/81
Yours sincerely,
For ANSBACHER LIMITED
\i>Uh\ •
DPC/AJW
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900 I.F.D.I I 10595 3884
. ( 6 2 ) o J
1 0 - 1 2 - 0 12a w t99t
W C . . T
j *»RPAYEE -
O *
K *
; F-0.W.90I
Rockford Iavestsents Halted
7-11 Britannia PlaceB a t h S t r e e tSt KellerJerseyChannel Islands
Jf this docurwtt * pmanud THROUGH A BANK-jj, I Mitfnax moratv. ihaCMhwr ofinhndFtavinija ualpay:
[fl.057.50 I
J . M . C R A W L E YPnnopaJ Rntnca 0H>car of Inland Ravanoa
Tha tiyH'i (igniwi ta raqumd<whM V tw documantla Ml pnttmd ttnugk pay—'a awn bmk account
•»0000DI»» i0»'lB0li: 0 5=15 3aaun*
' v W
••uTfi
/
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Appendix XV (149) (1) (e)
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Arsct-r e t p c -
mentt xtii
it-aff —«1w»t Pcpwft Account*
IRflwns
Loan
£Deposit
£Wat B « 1 w
£
Rockford InvMtMfits/YorfcSecurities 172.965 194.243 (21.278)
'Q
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Appendix XV (149) (1) (f)
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%
t
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•f
vJsi-
91. YORK SECURITIES LIMITED ASSESSMENT.
No.1. Loan : £101.796.
No.2. Loan : £211,153.
No..3. Loan : £112,222.
Security : No.1.Loan.Joint and several guarantee of Brianand Anthony Rhatigan.
( No.2.Loan.Joint and several guarantee of-William
( and Joyce Forwood supported byj, 0 < 3 > L 0 i nequ1table Deposit of Title Deeds of
( Woodstock.
We consider the Security to be adequate in all cases.
THIS LOAN IS CASH BACKED
e — ; n nrritir for Drawdow n: &M. & Co. (If war £1m total exposure)
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Appendix XV (150) Mr Ronald T Fredette
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MrRonald T Fredette.
a) Letter of 25 Novem ber 1991 - Ansbacher Limited to Guinness andMahon.
b) Guinness and Mahon statement of 20 November 1985 - GM CT/College.
c) Guinness and Mahon statement of 22 January 1986 - GM CT/College.
d) Guinness and Mahon statement of 17 February 1986 - GM CT/College.
e) Guinness and Mahon statement of 20 February 1986 - GM CT/College.
f) Guinness and Mahon statement of 19 March 1986 - GM CT/College.
g) Guinness and Mahon statement of 24 March 1986 - GMC T/College.
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Appendix XV (159) (1) (a)
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Please reply to:42FitzwiDiam Square,''Dublin 2.Tel: 765144/763065Fax: 612035
FIT 17. i : ' ^ ' v :A : —» ••> j
Ansbacher l im i tedP.O. Box 187, Gtaad Cayman, O ynan lihmdt, BritishWest Ipdtea
Telephone (809) 949-8635 Tela* CP 4305
Facsimile (809) 949-7946 (809) 949-5267
25th November, 1991.M. David Humphries, Esq.,Senior Manager - Operations/Guinness & Mahon Limited,17 College Green,
DUBLIN 2.
Dear David,
I confirm Padraig Collery's letter of the 20th Novemberrequesting US$5,000 cash and US$5,000 in Travellers Chequespayable to Mr. Ron Fredette,
rhe above amounts are to be debited to Ansbacher Limited
ce Foinciana Fund Account No.08428030.C should be grateful if you could advise the total cost ofrhe above.
C enclose herewith the signed receipts for the TravellersCheques.
roi sincerely.
i
r . D .
Traynor.
25H0M«3»
DT/AJW
AMPOPOTTHI iiMiiiiMn«i«M«ioHiaT«uwattlOUGUWMIBIUKIKII^MMVMIK&Un^
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Appendix XV (150) (1) (b)
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Appendix XV (150) ( l) (c )
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I G+M GUINNESS+MAHON LTDnrmiiannioum * o.»«« «A r«
o
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Appendix XV (150) (1) (d)
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a
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Appendix XV (150) (1) (e)
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Appendix XV (150) (1) (f)
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1
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GUINNESS+MAHON LTDne.».p inn bmmhi >oj—«*rnni»mm
euiiwtu n m w c a t m m t * w t / couiec•• 1 rammU.J. DOLLARS •
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Appendix XV (150) (1) (g)
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Appendix XV (151) Mr C olm Hyland
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MrColm Hyland.
a) Transcript of evidence of Mr Colm Hyland dated 11 July 2001.
b) Statement of Mr Colm Hyland dated 14 May 2001.
c) Guinness and Mahon statement of a/c re GMCT/College of 20 February
1984.
d) Guinness and Mahon statement of a/c re GM CT/College of 18 October1985.
e) Guinness and Mahon credit committee minute of 21 September 1977.
f) Extract of transcript of evidence of Mr Geoffrey Miller dated 20 February2000.
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Appendix XV (151) (1) (a)
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PRIVATE EXAMINATION OF COLM HYLAND
UNDER OATH
ON WEDNESDAY, 11TH JULY 2001
I hereby certify the
following to be a true and
accurate transcript of my
shorthand notes in the
above named interview.
Stenographer
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PRESENT
The Inspectors: JUDGE 0'LEARY
MS. MACKEY BL
Solicitor to the Inspectors MS. M. CUMMINS
Interviewee: MR. C. HYLAND
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1 THE INTERVIEW COMMENCED, AS FOLLOWS, ON WEDNESDAY
2 11TH JULY 2001
3
4
5 JUDGE 0'LEARY: Thank you very much
6 indeed, Mr. Hyland, for
7 coming. We have a number of questions to ask you.
8 We should not be long, it will be quite short. The
9 position is that we have been investigating the
10 affairs of a company called Ansbacher, which has
11 been called other things as well, like; Guinness
12 Mahon Cayman Trust, GMCT and various names of that
13 kind down through the years.
14
15 One of the jobs we have been asked to do by the High
16 Court is to identify persons who were, at the
17 appropriate time, which is basically during the
18 1970's, 1980's and 1990's, who were clients of this
19 firm, Ansbacher, under that name or under one of its
20 previous names.
21
22 We are not investigating those people, I want to
23 make that clear but we must find out who were the
24 clients of Ansbacher. The next thing we have got to
25 do is we have to try and establish that for that
26 purpose and also to get a better understanding of
27 the company's operations, we have invited a number
28 of people from time to time to come in and chat to
29 us.
3
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1 It is a very informal procedure. The only formal
2 portion is that which is laid down by the Act under
3 which we operate and that is that the evidence will
4 be given on oath and that at the end of the
5 interview the evidence will be reduced to writing
6 and you will be required to sign it as an
7 acknowledgment that it is a correct record of what
8 went on here today. I will talk to you about that
9 later.
10
11 My name is Sean O'Leary, I am one of the inspectors.
12 In fact I am not the inspector who will be asking
13 you most of the questions today, that person is Ms.
14 Noreeen Mackey, who is also an inspector. There are
15 four inspectors but the two inspectors who have been
16 allocated to interview you are Ms. Mackey and
17 myself.
18
19 I have nothing else to say except that the only
20 really formal part of the procedure is the taking of
21 the oath. So, we will ask you to take the oath now.
22
23
24
25
26
27
28
29
4
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1 MR. COLM HYLAND, HAVING BEEN SWORN GAVE EVIDENCE AS
2 FOLLOWS
3
4
5 1 Q. MS. MACKEY: Mr. Hyland, just for the
6 record if I could get a
7 little bit about your background and your career. I
8 think you told us in your statement that you worked
9 with G.B. Miller, what are you by profession or
10 career?
11 A. I did a B. Com. in U.C.D. between 1961 and 1964.
12 Shortly afterwards I emigrated to Canada and spent
13 two and half years there and then came back to the
14 U.K. I worked in the U. K. for a multinational for
15 a period of time, for a year and a half and then
16 through that came in contact with a gentleman called
17 Jeff Miller, whom you have interviewed already.
18 2 Q. Yes?
19 A. He asked me to join, so, I basically
20 joined...(INTERJECTION).
21 3 Q. In what capacity did you join the company?
22 A. I joined on the understanding that I would at a
23 later stage be able to purchase a shareholding. I
24 suppose initially it was on a trial period, I was
25 coming home, I wanted to come home, I mean, the
26 60's, the whole idea was to go abroad and get some
27 experience and then come back.
28 4 Q. Did you join the board immediately?
29 A. No.
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1 5 Q. What was your role or function?
2 A. I suppose I was really brought back, we had acquired
3 a new agency, I was working for the company in
4 England, which constituted the main agency of G.B.
5 Miller, which was a company called W.R. Grace.
6 6 Q. Yes?
7 A. It was an American company and they were involved in
8 the production of vacuum packaging materials, which
9 were used in the meat industry and the cheese
10 industry and all of that type of thing. I would
11 have joined initially to -- well, we had acquired a
12 new agency and I suppose he wanted somebody to look
13 after that.
14 7 Q. You were coming back to manage that effectively?
15 A. Coming back to manage that, but I mean, managing in
16 the sense that it was a small company so it was very
17 much a hands on operation.
18 8 Q. Yes?
19 A. I went out selling and administering.
20 9 Q. In due course then did you in fact purchase shares
21 in the company?
22 A. I then became a director but not a shareholder and
23 then subsequently...(INTERJECTION).
24 10 Q. What dates approximately did these things happen?
25 A. I joined Millers in 1969.
26 11 Q. Yes?
27 A. I would have become a director I think probably
28 about 1970, then subsequently I think about '72, '73
29 maybe, I purchased a 10 percent share holding.
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2 A. That's my guess.
3 13 Q. Did you increase that shareholding at any stage?
4 A. I subsequently received an additional 5 percent in
5 1979, 1980, somewhere around 1979 or 1980.
6 14 Q. Yourself and Mr. Miller were the two shareholders?
7 A. There was another director called Ray McCutcheon but
8 I don't think he was a share holder and he left
9 shortly after that.
10 15 Q. To the best of your knowledge the two of you
11 constituted the entire...(INTERJECTION)?
12 A. Yes, and at a later stage another gentleman
13 purchased a 10 percent share holding. Shortly after
14 there was a disagreement and he left the company.
15 That is really how I go got to acquire my additional
16 5 percent if you like.
17 16 Q. Yes, I understand, in 1979?
18 17 Q. JUDGE 0'LEARY: Who was that, do we know
19 his name, that chaps name?
20 A. Dermot O'Regan.
21 JUDGE 0'LEARY: Thank you.
22 18 Q. MS. MACKEY: You sent us in a statement
23 Mr. Hyland, do you have a
24 copy of it there with you? Exhibit 1.
25 A. I do, yes.
26 19 Q. I would like to just go through it, I think that the
27 is the simplest thing, to go through that because
28 you have given us quite a lot of information and
29 thank you for that. To clarify a certain number of
7
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1 matters in that, you start off by telling us that
2 you do not have an Ansbacher account and that you
3 only became aware of the name through the media
4 coverage. As Judge O'Leary said to you at the
5 beginning, Ansbacher was not always called
6 Ansbacher?
7 A. Yes.
8 20 Q. It had a number of different names. It may be that
9 you are more familiar with it under one of its older
10 names. Its first name was Guinness Mahon Cayman
11 Trust, it was a subsidiary of Guinness and Mahon and
12 was called after it. It was also called Cayman
13 International Bank and Trust Company?
14 A. Yes.
15 21 Q. It was called then Ansbacher Limited and Ansbacher
16 Cayman Limited.
17 A. Yes.
18 22 Q. You explained to us here on page four of your
19 statement, Exhibit 1, about a proposal put to
20 yourself and Mr. Miller or to the company, by S.K.C.
21 about the setting up of a trust?
22 A. Yes.
23 23 Q. Could you fill in the background of that a little
24 bit for me? Could you tell me how this proposal
25 first arose and who the person in S.K.C. that dealt
26 with it was?
27 A. I think, as I have said in my statement, Exhibit 1,
28 I would have been aware of it but most of the
29 dealings would have been done by Mr. Miller.
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2 A. He was more office based.
3 25 Q. I understand but were you present at the meetings
4 that decided this thing?
5 A. I have no recollection, I knew the background to it,
6 put it that way, but if you ask me to swear on oath
7 was I present at meetings, I couldn't tell you.
8 26 Q. Who told you first about the trust, was it Mr.
9 Miller himself?
10 A. Mr. Miller, yes.
11 27 Q. That is the first you heard about it?
12 A. Yes.
13 28 Q. Had it already been established at that stage?
14 A. No, I think it would have been in the process. I
15 think the likely scenario and you must remember that
16 we are talking about 25 years ago.
17 29 Q. Yes?
18 A. The likely scenario would have been that he would
19 have had a meeting or a suggestion would have been
20 put to him, say maybe it was the review of the
21 annual accounts or something like that, and a
22 suggestion would have been made that it was possible
23 to set this up.
24 30 Q. Yes?
25 A. I would have been aware of it, I mean.
26 31 Q. What was put into this effectively was commission
27 that was being earned overseas?
28 A. Yes.
29 32 Q. You at this stage were already a shareholder; is
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1 that correct?
2 A. I would have been a 10 percent shareholder, I think
3 I would have been at that stage, yes.
4 33 Q. In the ordinary course of events you would have been
5 entitled to 10 percent of this commission; would
6 that be the case?
7 A. Correct, yes.
8 34 Q. In that sense part of the money that was rightfully
9 due to you was going into this trust; is that
10 correct?
11 A. Yes.
12 35 Q. Ten percent of whatever went in you were entitled
13 to?
14 A. Yes.
15 36 Q. Coming down a little further towards the bottom of
16 page 4, you say,
17"In addition and at the Trust's
18 discretion both Mr. Miller & myselfwere permmitted to draw monies in
19 proportion to our shareholding."
20
21 Who decided this, how did this come about or how did
22 you know you were committed?
23 A. Again, I presume since I was a 10 percent
24 shareholder in the company and also because the
25 trust was set up and monies were going, if I like,
26 it would have been -- it is rather difficulty to
27 explain because I suppose anything that would have
28 happened, if I was a 10 percent shareholder in the
29 company, I would have been entitled to it, yes.
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1 37 Q. That was your understanding at the time?
2 A. Yes.
3 38 Q. Are you familiar with the operation of trusts? The
4 money is actually put outside the control of the
5 owner of the money and it is at the total discretion
6 of the trustees to decide what to do with it?
7 A. Yes. Well, was that the case then?
8 39 Q. Yes?
9 A. All I can tell you is that somebody came to us with
10 a scheme, which, as far as we were concerned, was a
11 legal scheme.
12 40 Q. In fact it was someone in S.K.C. who told you you
13 could withdraw the money?
14 A. We would not have known about this quite frankly.
15 41 Q. Yes?
16 A. It was a suggestion that was put to us.
17 42 Q. It was your understanding that whenever you wished
18 to withdraw money you could do so. You were under
19 no illusions about that, you were quite satisfied
20 that if you wished to have money all you had to do
21 was ask?
22 A. I would think that -- if I think back, and again I
23 preface all this by saying you are asking me to
24 remember details of 25 years ago, I couldn't even
25 tell you what profits the company was making 25
26 years ago. You are asking me to remember details
27 like that.
28 43 Q. Yes?
29 A. I would think that the situation would have been
11
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1 that initially, and as I say, the main reasons, we
2 had had a couple of bank strikes, we were a company
3 that was growing, here was a possibility, of having
4 monies which could be used as backing, so that we
5 could use back to back facilities to develop the
6 business...(INTERJECTION).
7 44 Q. Yes, but I am talking about the withdrawing of the
8 money?
9 A. I am coming to that.
10 45 Q. Yes?
11 A. Here is the situation, we have this initially, I
12 would think that over the period that the
13 arrangement existed it became a little looser.
14 46 Q. Yes?
15 A. Put it that way. That initially we probably
16 wouldn't have drawn monies or it might have been, if
17 you like, a more rigid system in operation but I
18 think it is true to say that as time progressed and
19 if I go back towards the beginning of the 80's.
20 47 Q. Yes. When you did want money, Mr. Hyland, you
21 contacted Mr. Collery?
22 A. Yes .
23 48 Q. Was it always Mr. Collery or were you in contact
24 with Mr. Traynor at any stage?
25 A. No. I said I have never met Mr. Traynor in my life.
26 49 Q. It was always Mr. Collery?
27 A. Yes .
28 50 Q. Were you introduced to Mr. Collery and told this is
29 the man that will...(INTERJECTION)?
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1 A. You see, we had had commercial dealings with
2 Guinness and Mahon, we would have used them for
3 loans and I think foreign currencies, I think I am
4 correct in saying foreign currencies, foreign
5 currency transactions.
6 51 Q. Yes?
7 A. Let's say we were importing.
8 52 Q. Yes, I understand?
9 A. If we were importing from Germany and things like
10 that. Where I have a little difficulty is that
11 there is a number of people in Guinness and Mahon
12 that we dealt with but trying to, over the period of
13 time, trying to differentiate between who we dealt
14 with on either side is a little difficult. I know
15 for instance that we had dealings with a chap called
16 Leonard in there who was a banking manager.
17 53 Q. Yes?
18 A. He would come in and review and we would come in and
19 present our accounts to him.
20 54 Q. Really all I am concerned with are who you dealt
21 with in relation to this particular aspect, not who
22 you dealt with in relation to your normal business?
23 A. What I am saying to you is the difficulty I have is
24 over a period of 25 years actually distinguishing
25 who is who.
26 55 Q. All right.
27 A. Okay.
28 56 Q. Moving on then, were you aware at the time when
29 S.K.C. set this up where the trust was being
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1 established?
2 A. As far as I was concerned and this is where my
3 difficulty is, I certainly haven't heard of any of
4 the names you have mentioned.
5 57 Q. Leaving that aside, where did you think it was?
6 A. The Isle of Man or the Channel Islands.
7 58 Q. Yes?
8 A. The Cayman Islands, I have no recollection
9 of...(INTERJECTION)
10 59 Q. Your belief it was the Channel Islands?
11 A. Oh, yes. As far as I am concerned it was either the
12 Isle of Man or the Channel Islands.
13 60 Q. I think you are correct because I am going to show
14 you a document now, I think you are correct in your
15 belief that it was one or the other and in fact it
16 appears to have been the Channel Islands. I am
17 going to show you a document but I want to explain
18 something to you first about it?
19 JUDGE O'LEARY: Before I show you the
20 document could I ask one
21 question arising out of that if you would not mind.
22 A. Yes, of course.
23 61 Q. You thought it was going to be Isle of Man or the
24 Channel Islands?
25 A. Yes .
26 62 Q. When it was actually set up did you know whether it
27 was the Isle of Man or the Channel Islands?
28 A. I couldn't honestly tell you which one it was
29 because the two, if you like, were synonymous.
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1 63 Q. You had money there for a period of how many years?
2 A. Well, I think I have said in my statement, Exhibit
3 1, that I think this was set up in 1974.
4 64 Q. Yes, and you finally withdrew your last money in?
5 A. In 1984.
6 65 Q. For ten years you had money and you did not know
7
8
whether it was on the island in the Isle of Man or
one of Channel Islands?
9 A. As far as I was concerned it was being administered
10 by G. & M. I met somebody from the Channel Islands,
11 we were introduced to somebody from the Channel
12 Islands on one occasion when he came over here.
13 66 Q. MS. MACKEY: Do you recollect who that
14 was ?
15 A. Yes, I am sure you have his name already, a chap
16 called John Lipscombe.
17 67 Q. JUDGE 0'LEARY: Can I take it that from
18 the available information
19 and the fact that you were introduced to this man
20 from the Channel Islands that you thought it was the
21 Channel Islands?
22 A. I think it would be fair to assume that, yes.
23 68 Q. MS. MACKEY: Before I show you
24 this document then, Mr.
25 Hyland, I should explain to you that what we have
26 learned in the course of the investigation we have
27 been doing for the last year and a half is that one
28 of the subsidiaries of Guinness and Mahon within the
29 Channel Islands, and it was a company called College
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1 Trustees, and indeed Mr. Lipscombe worked for
2 College Trustees?
3 A. Right.
4 69 Q. It managed funds of Irish residents who had funds
5 with Guinness and Mahon in the channel Islands?
6 A. Yes .
7
8
70 Q. From sometime towards the end of the 1970's or mid
1970's onwards it placed those client's monies on
9 deposit with Ansbacher and in the majority of cases
10 the clients did not know that because they were
11 dealing at all times with College Trustees through
12 Guinness and Mahon but in fact the funds were placed
13 with Ansbacher. They were placed by Ansbacher back
14 in Guinness and Mahon, which is where you were able
15 to draw them out, in an account called Guinness
16 Mahon Cayman Trust, which was the name of Asnbacher
17 at the time, stroke, College Trustees.
18
19 I am going to show you a document now, page 58 Ms.
20 Cummins, please, sorry 59 actually, you can give
21 both of them but it is 59 I want to look at first.
22 Actually no, we will look at 58 first, we will take
23 them in order. You see at the top of the page
24 there, Guinness Mahon Cayman/College, Exhibit 2?
25 A. Stroke College, yes.
26 71 Q. Account name?
27 A. Yes .
28 72 Q. We have blotted out a number of the transactions in
29 this that do not relate to you but you will see
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1 under the column particulars, with the date 16th
2 February 1988, "Deutschemark Charges" do you see
3 that?
4 JUDGE 0'LEARY: 1984 is it not?
5 MS. MACKEY: 1984, sorry.
6
7
Q
"Deutschemark Charges, 1032 at 385,Hyland."
o
9 Can you see that Mr. Hyland?
10 A. Yes, sorry, yes. I see DM charges, 1032 at 305,
11 yes .
12 73 Q. "Hyland"?
13 A. Yes .
14 74 Q. Would it be likely that you were getting
15 Deutschemarks at that stage, buying Deutschemarks.
16 Did you buy Deutschemarks occasionally?
17 A. Why would I have bought -- 16th February -- it is
18 possible, yes, quite possible.
19 75 Q. If we move on down further then you see a date 20th
20 February '84, and we have "Sterling, Re Hyland" and
21 we have £50?
22 A. Yes .
23 76 Q. Does that seem likely?
24 A. Had we separated from sterling at that stage.
25 77 Q. We must have if it was being purchased, yes?
26 A. You are suggesting these are charges, are they.
27 78Q.
That appears to be an actual Sterling transaction,
28 the one above is a charge for Deutschemarks, this
29 appears to actually be Sterling that was bought?
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1 A. For £50 is it?
2 79 Q. Yes, it appears to be?
3 A. Yes.
4 80 Q. If we look at page 59, Exhibit 3?
5 A. Yes, which is the second.
6 81 Q. Have you got a relative called Jean?
7 A. My wife is Jan Hyland.
8 82 Q. J-E-A-N?
9 A. No, it's J-A-N.
10 83 Q. J-A-N?
11 A. Yes.
12 84 Q. Do you have a daughter called Jean?
13 A. No.
14 85 Q. JUDGE 0'LEARY: I presume J-A-N is a name
15 which from time to time is
16 abused by people who do not know it?
17 A. Yes.
18 JUDGE 0'LEARY: You can see there on 15th
19 October...(INTERJECTION).
20 A. Maybe if you could explain to me the reason for your
21 question and then maybe I can help you?
22 8 6 Q. MS. MACKEY: I am not even asking you a
23 question at this stage I
24 am pointing out to you that your name appears on
25 these accounts?
26 A. Yes.
27 87 Q. In the name of Guinness Mahon Cayman Trust/College?
28 A. Right, yes.
29 88 Q. What you have indicated to us already indicates that
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1 your money was certainly in the Channel Islands?
2 A. Correct.
3 89 Q. Because you were of the belief that it was either
4 there or the Isle of Man?
5 A. Yes.
6 90 Q. The man you met was a Channel Islands man?
7 A. Yes.
8 91 Q. Whom we know?
9 A. Yes.
10 92 Q. In fact he was a College Trustees man.
11 93 Q. JUDGE 0'LEARY: Did you ever hear of
12 College Trustees at that
13 time?
14 A. At the time I couldn't say, I honestly couldn't say.
15 94 Q. Did you hear of it subsequently?
16 A. Oh, I did, yes, obviously reading the papers.
17 95 Q. Did you hear of it in the context of your money
18 subsequently?
19 A. No, no. Well, if I did I certainty have no
20 recollection of it.
21 96 Q. I see?
22 A. I think, your Honour, what I'll have to say is that
23 I didn't take a huge interest, I knew there were
24 monies there, the mechanics of it wouldn't be
25 something that I would take a great interest in.
2 6 97 Q. MS. MACKEY: Yes, I understand?
27 A. In terms of explaining, assuming that it is my wife,
28 it could easily have been that I said "You're in
2 9 town, would you ever pick up something?" And it
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1 would be as simple as that.
2 98 Q. Yes?
3 A. She wouldn't have been aware of this?
4 99 Q. JUDGE 0'LEARY: I understand that
5 100 Q. MS. MACKEY: It was really the name?
6 A. My wife is Jan, short for Janice.
7 101 Q. Yes. Taking all in all it would appear that your
8 money, which had been in College Trustees or been in
9 the Channel Islands, was moved by College Trustees
10 at the time that it moved all its other client's
11 monies to Ansbacher?
12 A. Yes.
13 102 Q. This is how your name appears in an account with the
14 name of Ansbacher over it and this is the reason
15 that we have asked you to come in and see us.
16 A. Yes.
17 103 Q. Would you accept that in fact that appears to be the
18 case, that your money appears to have been moved?
19 A. Moved to this...(INTERJECTION).
20 104 Q. Without your knowledge more than likely?
21 A. But this is, I mean, the figures that are here, I am
22 just looking at balances, am I reading £3 million?
23 105 Q. This is a statement of accounts of Guinness Mahon
24 Cayman Trust with a number of transactions relating
25 to other people in it, whose names we have blotted
26 out, they have nothing to do with you at all?
27 A. Right, right.
28 106 Q. The only transactions relating to you are those two
29 very small ones indeed?
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1 A. The small ones, yes.
2 107 Q. You can ignore those balances, which is the
3 accumulation of accounts of a whole lot of people?
4 A. Right.
5 108 Q. JUDGE 0'LEARY: We are not suggesting you
6 had £3 million Sterling?
7 109 Q. MS. MACKEY: Not at all, no?
8 A. I would like to know where it is.
9 110 Q. No, not at all. Those balances are not yours. The
10 items relating to you are those two very small ones?
11 A. Yes.
12 111 Q. JUDGE 0'LEARY: Could I explain to you,
13 Mr. Hyland, the system
14 they used was that when the money went out to the
15 Channel Islands and went through Cayman back to
16 Dublin it did not come back into one account for
17 each individual?
18 A. Right.
19 112 Q. It came back in grouped accounts?
20 A. Yes.
21 113 Q. There could be dozens?
22 A. Yes, okay.
23 114 Q. This is one of the grouped accounts and the only way
24 we can find out who was in the grouped accounts is
25 by clues like this; do you understand?
26 A. Yes, I do.
27 115 Q. There might be lots of other people that we have
28 similarly identified.
29 116 Q. MS. MACKEY: I really have only one
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1 other question, Mr.
2 Hyland, that is in relation to the time at which you
3 terminated this arrangement. You tell us there in
4 your statement, Exhibit 1, that at a given point you
5 broke off your relationship with G. B. Miller?
6 A. Yes.
7 117 Q. At that stage...(INTERJECTION)?
8 A. Well, we sold the company. The company was sold.
9 118 Q. The company was sold and at that stage you
10 liquidated your assets, you closed
11 down...(INTERJECTION)?
12 A. The small amount that was left.
13 119 Q. You withdrew whatever there was form the trust?
14 A. Yes.
15 120 Q. You say you parted company in 1984?
16 A. The company was sold in 1984 and I remained on as
17 managing director of it but working for a Swedish
18 multinational.
19 121 Q. Could it have been some time after that that you
20 actually withdrew the final amount. I am just
21 looking at this transaction on page 59, Exhibit 3,
22 in relation to Jean Hyland and that is October '85;
23 is that possible?
24 A. I would have thought that -- I mean, quite honestly
25 I would have thought in '84 because my recollection
26 was that we sold -- if you say it is October '85, I
27 thought we finished...(INTERJECTION).
28 122 Q. Do you have any documents relating to the
29 transactions?
22
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1 A. I don't, no. As I said in my statement, Exhibit 1,
2 we got very little documents.
3 123 Q. You do say there that you were shown figures?
4 A. Yes.
5 124 Q. Who showed you those?
6 A. I would have thought Padraig Collery. We were
7 parting company, Jeff miller and myself were parting
8 company, we had this approach from a company called
9 Kema-Nobel, who were setting up, they had bought a
10 company in England and they were setting up, if you
11 like, a new venture for them outside their normal
12 business and they made us an offer. I received
13 money for my shares. They asked me to stay on, part
14 of the deal was that Jeff Miller would retire.
15 125 Q. Yes?
16 A. But we had a slight falling out or more than a
17 slight falling out at the time of this deal because
18 he wanted to stay on and they didn't and things got
19 a little bit difficult.
20 126 Q. You think it was Padraig Collery who would have
21 shown you a statement at that stage?
22 A. Yes, at that stage and that is why I say that I
23 thought the thing had -- because my recollection was
24 that I had very little money left at that stage.
25 127 Q. Did he give you the statement or just show it to you
26 and take it away?
27 A. I think he might have given Mr. Miller statements.
28 128 Q. But did he give you any?
29 A. No.
23
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1 129 Q. Did you at any stage get anything from him, any
2 documents, or from the Channel Islands?
3 A. No, certainly not from the Channel Islands. Whether
4 I got -- I have very little recollection of
5 receiving any kind of written documentation. I
6 certainly don't have -- if the question you are
7 leading on to is, do I have anything, the honest
8 answer is I don't, but I have no firm recollection
9 of receiving anything at the time.
10 130 Q. Very good. I have no further questions Mr. Hyland?
11 131 Q. JUDGE 0'LEARY: Just a few, yes. What
12 was the name of the trust
13 that was established?
14 A. The name of trust was I think Goldtan. It is either
15 G-O-L-D-T-A-N or G-O-U-L-D-T-A-N or G-O-L-T-A-N. I
16 think it was, you know, one of those off-the-shelf
17 companies or trusts.
18 132 Q. Yes. That was it. Do you know what date it would
19 have been established?
20 A. Going from my statement, Exhibit 1, I seem to
21 remember that all this happened, it had to be prior
22 to '77 because that is document you sent me.
23 133 Q. Yes?
24 A. Incidentally I have never received any of these
25 documents from G. & M., my understanding was that
2 6 documents which were submitted should have
27 been...(INTERJECTION).
28 134 Q. Have you requested them?
29 A. No, I never requested them but I would have thought
24
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1 that they would have sent -- you know, if they were
2 sending you documents they would have sent me
3 documents, which they have never done.
4 135 Q. I think they are inundated with that situation but
5 I think you can obviously go and request documents
6 from them?
7 A. Yes.
8 136 Q. They might not have the same amount of detective
9 work as we; do you understand what I mean?
10 A. Right, yes.
11 137 Q. They have other jobs to do as well. If you had a
12 big account in your own name that might be one thing
13 but these are only, if you like, scattered
14 references?
15 A. Yes.
16 138 Q. All right, that is the name of that, that is number
17 one. When you say you received approximately
18 £25,000, and really the amount is of no great
19 relevance to us I can assure you, did you receive it
20 in one, two, twenty or a hundred tranches; do you
21 understand what I mean?
22 A. It would have been a multiplicity over a period of
23 years, you know, if I was going on holidays or
24 something like that I would go in and I suspect this
25 is where my wife's name was brought into this, she
26 wouldn't have really had a clue. I would just say
27 "Would you mind picking something up for me?"
28 139 Q. We will not bother her, you can rest assured of
29 that?
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2 140 Q. Multiplicity of small sums, would the average be
3 £500?
4 A. Probably £1,000.
5 141 Q. Probably £1,000?
6 A. You know, £500, £1,000, £1,500, probably not much
7 more. I quite honestly don't know, this £2,500, I
8 have no recollection of the time.
9 142 Q. Could I ask you about the physical piece of paper
10 you would get in your hand when you said you wanted
11 £1,000?
12 A. I have no recollection of actually getting a
13 physical piece of paper other than going in and
14 collecting money, now, whether we signed for
15 anything.
16 143 Q. MS. MACKEY: It was cash then, Mr.
17 Hyland?
18 A. Oh, it was cash.
19 144 Q. JUDGE HYLAND: Cash?
20 A. Yes, I received cash.
21 145 Q. Cash?
22 A. Yes.
23 146 Q. Mr. Collery would arrange that?
24 A. Yes. It was simply a question of going in and
25 collecting it over the counter.
26 147 Q. MS. MACKEY: And identifying yourself?
27 A. Yes, obviously.
28 148 Q. JUDGE 0'LEARY: Do you remember in 1982,
29 this is the last thing I
26
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1 want to ask you about, do you remember in 1982 you
2 decided to make an investment I think which required
3 borrowing money from ICC? Was it the purchase of a
4 warehouse?
5 A. Yes. I bought a warehouse in Coolock, correct.
6 149 Q. That required the borrowing of money from, I think
7
8
ICC but you had an interim or a bridging finance
situation where you were assisted by Guinness and
9 Mahon; do you remember that?
10 A. I don't.
11 150 Q. Do you remember getting some £40,000 from them for a
12 period of some months?
13 A. No, but, I mean, I am not saying that I didn't,
14 obviously you have documents there. I thought I did
15 a straight forward arrangement.
16 151 Q. All I can say really is that you applied for it?
17 A. Yes .
18 152 Q. I cannot say you actually got it?
19 A. That would have been the price of the unit I bought,
20 yes .
21 153 Q. Do you remember then an earlier, smaller sum of
22 money to do with a tax scheme, where you borrowed
23 money from Guinness and Mahon to tide you over until
24 you got a tax refund; do you remember that?
25 A. No, but would it be linked -- was it linked to that.
26 154 Q. No, nothing at all to do with that?
27 A. To the purchase of the warehouse.
28 155 Q. It might have been linked in this way, I understand
29 that when you had the industrial building you got a
27
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1 tax allowance?
2 A. A 50 percent... (INTERJECTION) .
3 156 Q. As a result of that your tax was reduced?
4 A. Correct, yes.
5 157 Q. Do you remember that?
6 A. I know the scheme, so I can remember that, but if
7 you are asking me do I remember the specific details
8 the answer is no.
9 158 Q. I wonder, Ms. Cummins, would you show Mr. Hyland
10 page 33 and 34? (Same Handed) You were still with
11 Millers at that stage, Exhibit 4?
12 A. Yes.
13 159 Q. Do you remember that scheme?
14 A. The answer is no I don't. But it does not seem, I
15 mean, the Industrial Building Allowances were
16 available.
17 160 Q. Yes?
18 A. Just reading briefly through it it seems to me that
19 there is nothing illegitimate about it.
20 161 Q. No, no, I am not suggesting that for a moment?
21 A. Right.
22 162 Q. All I am doing with that actually is trying to test
23 your memory; do you remember it at all?
24 A. I can certainly remember buying the building and the
25 main purpose of buying the building was to avail of
26 the allowances which were available at the time.
27 163 Q. Nothing wrong with that?
28 A. But in terms of...(INTERJECTION).
29 164 Q. You do not remember the details?
28
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2 165 Q. Would you show Mr. Hyland page 24? This is in 1977
3 you borrowed £2,500 from Guinness and Mahon; do you
4 remember that, Exhibit 5?
5 A. No. You asked me that in my statement, Exhibit 1,
6 in the original document and I said "No, I had no
7 recollection" and I repeated that earlier on. I
8 didn't receive this document before, Exhibit 5.
9 166 Q. You never received the document?
10 A. No, I am not saying that, I mean I signed it.
11 167 Q. Would you look at the second page, is that your
12 signature?
13 A. I would think it is, yes.
14 168 Q. In the records of Guinness and Mahon that loan is
15 described as a suitably secured loan?
16 A. In their records, yes.
17 169 Q. Yes, at page 26, Exhibit 6?
18 A. I have that document, you sent me that with the
19 letter.
20 170 Q. Yes?
21 A. So, I have seen this before.
22 171 Q. Suitably secured means that it was backed with funds
23 elsewhere?
24 A. Yes, you explained that.
25 172 Q. Do you remember that?
26 A. No, I said that earlier on that I don't remember
27 that but I am not denying it, but in terms of why I
28 would take a loan for £2,500 and they don't even
29 mention in this why.
29
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1 173 Q. I suppose, Mr. Hyland, in fairness, in 1977 £2,500
2 was a different sum of money than is it is now.
3 A. Yes .
4 174 Q. I suppose £2,500 in 1977 was a third of the value of
5 a three bedroomed semidetached house?
6 A. Yes .
7 175 Q. In current terms it would be £50,000?
8 A. Yes .
9 176 Q. It is a lot of money. Do you remember anything
10 about it?
11 A. The honest answer is no. I mean, I query the value
12 in 1977 because we had considerable inflation then.
13 I know that I bought my house for £18,000 in '75 and
14 I know that it had gone up considerably in value in
15 two years, between 20 and 25 percent.
16 177 Q. Even if it is ten percent, what is the house worth
17 now?
18 A. Oh.
19 178 Q. Half a million, so, you take ten percent of that
20 £50,000?
21 A. I can't deny that I took it out but what it was for
22 I have absolutely no idea.
23 179 Q. Do you remember the money in the Channel Islands
24 being used as security for that?
25 A. I can't, I mean, I can only tell you under oath that
26 I have no recollection of this loan but if that
27 document there says that it was suitably secured and
28 you say in your letter that suitably secured was a
29 code for it being backed then logically I have to
30
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1 accept that.
2 180 Q. Yes?
3 A. But if you ask me have I any recollection, with my
4 hand on the bible I can say I don't have any
5 recollection.
6 181 Q. MS. MACKEY: I think you said yourself
7 that part of the
8 arrangement about the trust was that it could be
9 used as backing?
10 A. Yes, but more for the business. As the original
11 scheme was proposed it was a means of providing back
12 to back financing for the business.
13 182 Q. JUDGE 0'LEARY: I want to ask you about
14 Mr. 0'Regan, was he a
15 party to this offshore deposit scheme?
16 A. No, to the best of my knowledge he was not involved
17 in that section of it because he was running one
18 section of the business, the income stream was
19 coming from another section, so, when he bought into
20 the business he bought in on the valuation, if you
21 like, we separated out and he bought in on a
22 valuation which only took into account the business
23 that he was responsible for, if you like.
24 183 Q. Yes?
25 A. It sounds like a convoluted deal. The other thing
26 that I am anxious about is that he had a personal
27 tragedy some years ago, his only son was killed in a
28 drowning and he has had enough problems, his wife
2 9 had a break down.
31
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1 184 Q. The information you have given assists us greatly in
2 that regard
3 185 Q. MS. MACKEY: I think you said you
4 checked the matter out
5 with Mr. Miller?
6 A. I checked the matter with Mr. Miller and he is
7 adamant that he was not involved.
8 18 6 Q. JUDGE 0'LEARY: The only thing that is
9 left then, Mr. Hyland, is
10 this, the transcript will be ready in due course.
11 Ms. Cummins, our solicitor, I am not sure if I
12 introduced you?
13 A. No, she introduced herself.
14 187 Q. Ms. Cummins, our solicitor will contact you and at
15 that stage arrangements can be made for it to be
16 signed?
17 A. Yes, okay.
18
19
20
21 THE INTERVIEW WAS THEN CONCLUDED
22
23
24
25
26
27
28
29
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•3 O C V o W -
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Appendix XV (151) (l )(b )
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Appendix XV (151) (l )( e)
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6-MI L O A W F/ic
562:
563: Cotm Hyland, Eiqj
Amounh
Purpose:
Term:
Rate:
Drawdown:
Security:
Recommended.
£2/500
Personal Loan
20/3/78
13% fixed
Immediate
Suitably Secured.
564:
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22
23
24
25
26
27
28
29
{ I L l Q ^ W j 4 M k i L
< 0 ^ < 3 f f j ^ o .
64 Q. Yes. Generally what was the scheme that was
operated?
A. Yes, this is what I am coming to now. The scheme
was that a company -- one of our companies that we
were distributors for, paid us on commission only.
65 Q. Yes?
A. And it was a smaller part of our business but it was
quite substantial and they were to set up, or they
13
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1 would set up, a company in Jersey which was an
2 overseas company.
3 66 Q. Yes?
4 A. And we would pay that company or they would appoint
5 that company as advisors to the Irish market, on how
6 they should market their goods to the Irish market.
7 An agreement would be drawn up and we would
8 relinquish half our commission. Our commission
9 was 5 percent. Half the commission was two and a10 half percent and these would be paid into the
11 Guernsey company.
12 67 Q. What was the name of the company?
13 A. I can't remember the name of the company but I have
14 recalled -- the last meeting we were at they said
' 15 who that company was. You see, I didn't have
16 anything to do with that. This was a company formed
17 by British Ceedack Limited, who were our suppliers.
18 This was nothing unusual for them because they were
19 doing it with agents all over the world, keeping
20 money in London and various places overseas.
21 68 Q. Yes?
22 A. Part of their commission.
23 69 Q. Did British Ceedack Limited form a company on your
24 instructions in Guernsey?
25 A. Yes, yes.
26 70 Q. And, how . . . (INTERJECTION)?
27 A. Basically on my instructions.
28 71 Q. Half the commission that you were entitled to went
29 to this company?
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1 A. Yes.
2 72 Q. Can you remember the name of the company?
3 A. I can't remember the name of the company.
4 73 Q- Have you any records available as to this
5 transaction?
6 A. I never kept any records of this.
7 74 Q. Yes?
8 A. I just didn't keep any.
9 75 Q. Who ...(INTERJECTION)?
10 A. I am like that.
11 76 Q. Did Mr. Reid in SKC ...(INTERJECTION)?
12 A. I approached British Ceedack. My father had been
13 agents for them since 1937 and I explained the
14 situation and their sales manager, who is now dead.
15 said, "Geoff, there is no problem. I am doing it
16 for everybody all over the world".
17 77 Q. All right. This will happen then. It was was set
18 up?
19 A. Yes, it was ...(INTERJECTION).
20 78 Q. The money, half the money, went into the
21 Guernsey company?
22 A. It went into this company, yes.23 79 Q. Then what was the rest of the arrangement.
24 A. Well, I am trying to puzzle out how Guinness & Mahon
25 got involved in this and I think that they took on a
26 trust or bankers in the isle Of Man at whose
27 insistence or suggestion it was, were Guinness &
28 Mahon.
29 80 Q. I am sorry. Was it the Isle Of Man, did you say?
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No, were Guinness & Mahon. The bankers who looked
after this company on behalf of Ceedack were
Guinness & Mahon. Now, this I am not I am under
oath so I have got to be very careful about this but
I was asked, "Was it such and such a company? Was
it such and such a company," at the last
Moriarty meeting. Several companies were mentioned
including College Trustees.
Yes?
At that time it didn't click but since then -- and
mind you I have also read this in the newspapers.
This is why I cannot positively say that it was
College Trustees but I am virtually certain it was
College Trustees. I think that that is how
Guinness & Mahon became connected with -- how I
became connected -- although I was a customer of
Guinness & Mahon I think that was my introduction of
the overseas company to Guinness & Mahon.
Yes?
Okay?
Yes.
Now, I thought this was -- well, God, I was 36 years
of age at that time. I was raising two boys and I
...(INTERJECTION).
If you could just ...(INTERJECTION)?
Anyway.
Just tell VIS ...(INTERJECTION)?
All right, so, then ...(INTERJECTION).
If you could just keep it ...(INTERJECTION) ?
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X
1 A.
2 87 Q.
3 A.
4 88 Q.
5 A.
6
7
8
910
11
12
13
14 89 Q.
15 A.
16
17 90 Q.
18 A.
19 91 Q.
20 A.
21
22
23
24
25
26
27 92 Q.
28
29 A.
It went on then.
Just keep it as short as you can, Mr. Miller?
Okay, I will. I am just getting a bit carried away.
Yes. Just keep it as short as you can?
Yes, Okay. I think that is what it was. Now, I was
fully convinced that this was legal or I had been
told that it was legal: "Absolutely legal, yes.
The money is coming into Ireland. If your
commission wasn't paid to you and you just didn'tget your commission, you wouldn't have to advise
The Revenue Commissioners. This money is going to a
separate company outside the jurisdiction of Ireland
and it is staying there and it is mounting up."
Yes?
"Occasionally this company may lend you a bit of
money" or something.
Who?
Which I didn't use.
Who advised you about this? Mr. Reid, was it?
I don't honestly know. I couldn't Bay definitely
who it was. I don't honestly know but I know that
I felt that while I couldn't really use the money I
could go into Quiimess & Mahon and draw against what
my guarantees, which I had already given them,
where, small amounts of money and that these
...(INTERJECTION).
Had you an accountant at this time advising you on
your own tax affairs?
Not really, no, I was -- this then just disappeared
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1 more or less and X was ...(INTERJECTION).
2 93 Q. No, no. I just want to know ...(INTERJECTION)?
3 A. Yes.
4 94 Q. You had to make ...(INTERJECTION)?
5 A. We had ...(INTERJECTION).
6 95 Q. Mr. Miller?
7 A. We moved ... (INTERJECTION) .
8 96 Q. Mr. Miller?
9 A. We moved ...(INTERJECTION).
10 97 Q- Mr. Miller?
11 A. Yes, sorry.
12 98 Q. Just listen to the question?
13 A. All right, yes.
14 99 Q. I want to know, did you have an accountant looking
15 after your company's affairs?
16 A. Yes.
17 100 Q. During ...(INTERJECTION)?
18 A. Yes, SKC.
19 101 Q. SKC?
20 A. Yes.
21 102 Q. Did you have a separate accountant looking after
22 your own affairs?
23 A. NO.
24 103 Q. Your own tax affairs?
25 A. NO.
26 104 Q. Did SKC look after your own tax affairs?
27 A. Yes.
28 105Q.
They did?
29 A. Yes.
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y
yy>>
X
Y*
V
>
X
X
20 113 Q. All right. What occurred then? Would you just tell
21 us what occurred briefly over the years then?
22 A. Over the years I occasionally said I wanted some
23 money from Guinness & Mahon and there was always a
24 little bit of a pause before I got it and then X
25 would go in and cash it, collect the monies. It
26 wasn't very much. We used it only for holidays and
27 things like that.
28 114 Q. who would you contact in Guinness & Mahon?
29 A. Padraig Collery.
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1 115 Q. Padraig Collery?
2 A. Yes.
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Appendix XV (152) Mr Denis McCarthy
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MrDenis McCarthy.
a) Transcript of evidence of Mr Denis McCarthy dated 15 June 2000.
b) Statement of Mr Denis McCarthy of 8 June 2000.
c) Guinness and Mahon statement of 12 January 1983 - GM CT/College.
d) Guinness and Mahon statement of 20 November 1981 - GMCT re
College.
e) Declaration of Trust - the Garenne Trust.
f) The Garenne Trust - balance sheet as at 31 December 1985.
2. Correspondence received from or on behalf of Mr Denis McCarthy.
a) Letter of 14 December 2001 - Matheson Ormsby Prentice Solicitors toInspectors.
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Appendix XV (152) (1) (a)
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PRIVATE EXAMINATION OF
MR. DENIS MCCARTHY
UNDER OATH
ON THURSDAY, 15H JUNE 2000
I hereby certify the
following to be a true and
accurate transcript of my
shorthand notes in the
above named interview.
Stenographer
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PRESENT
THE INSPECTORS:
SOLICITOR TO THE INSPECTORS:
INTERVIEWEE:
INSTRUCTED BY:
MR. ROWAN FCA
MS. MACKEY B.L.
MS. M. CUMMINS
MR. DENIS MCCARTHY
MR. ANTHONY 0'GRADY
MATHESON ORMSBY PRENTICE
SOLICITORS
30 HERBERT STREET
DUBLIN 2.
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1 THE INTERVIEW COMMENCED, AS FOLLOWS, ON THURSDAY,
2 15TH JUNE 2000
3
4 MR. ROWAN: Good morning,
5 Mr. McCarthy. Let me
6 introduce myself, I am Paul Rowan and this is one of
7 my fellow Inspectors, Ms. Noreen Mackey.
8 Mr. McCarthy, this is not a Court this morning, nor
9 is it a Tribunal, it is an interview. As such, if
10 during the course of the interview you wish to seek
11 some guidance from your solicitor, please ask us to
12 stop and we shall do so. Equally, if your solicitor
13 wishes to offer you some guidance, if he would ask
14 us to stop equally and we will provide that
15 opportunity.
16
17 We are going to make a record of the interview and
18 after the interview we will ask you to come and sign
19 a transcript when you have had an opportunity to
20 read through it.
21
22 May I ask Ms. Cummins, our solicitor, to administer
23 the oath, please.
24
25
26
27
28
29
3
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1 MR. MCCARTHY HAVING BEEN SWORN WAS EXAMINED, AS
2 FOLLOWS, BY THE INSPECTORS
3
4 MR. ROWAN: Mr. McCarthy, Ms. Mackey
5 is going to ask you some
6 questions.
7 1 Q. MS. MACKEY: Mr. McCarthy, you sent us
8 in a statement, do you
9 have a copy of it with you there?
10 A. Yes.
11 2 Q. I would like to go through that in due course. Just
12 before I start to do that, for the record if you
13 would tell us a little bit about your career and
14 background in as brief a fashion as you can so we
15 can establish your business?
16 A. When I left school?
17 3 Q. Yes, what your career has been to date?
18 A. My family business was Odearest, O'Dee & Co. which
19 was founded by my grandfather, the late Michael
20 O'Dee, some 120 years ago.
21 4 Q. You went into this business?
22 A. Yes, I went into the business with my father and I
23 went in with my younger brother.
24 5 Q. You finally rose to what position in it?
25 A. When my father died I became chairman.
2 6 6 Q. You became chairman?
27 A. Yes.
28 7 Q. That was what year?
29 A. I am very bad at years.
4
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1 8 Q. Roughly.
2 A. Roughly the 1960's.
3 9 Q. In the 1960's some time. Would it be the late
4 1960's?
5 A. Middle 1960's, that is to the best of my
6 recollection now.
7
8
10 Q. If you cannot remember anything, it is quite okay,
just say.
9 A. I will do my best.
10 11 Q. Of course, but if you cannot be specific about
11 dates, just tell us that and that is fine. You
12 became chairman of Odearest in the mid 1960's and
13 you continued on until?
14 A. It was taken over then in the 1970's by an English
15 company called Bondworth.
16 12 Q. Called?
17 A. Bondworth.
18 13 Q. Did you continue on?
19 A. I continued on, yes, with my brother.
20 14 Q. As chairman?
21 A. No, not as chairman. I was managing director, joint
22 managing director. That is to the best of my
23 knowledge.
24 15 Q. Yes. Did that continue then up to?
25 A. Bondworth expanded a lot. They were a British
26 company but they expanded into Australia. They were
27 in the carpet business mainly, manufacturing and
28 wholesaling. They expanded into the manufacture of
29 furniture and then they went into business in
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1 Australia, France and Germany. They bought a lot of
2 shops in Germany.
3 16 Q. Did you have a role in this?
4 A. No, not really.
5 17 Q. Did you leave at that stage?
6 A. No, I was part of the group.
7 18 Q. Are you still with them?
8 A. No.
9 19 Q. Are you retired now?
10 A. Do you want me to follow up what happened?
11 20 Q. Insofar as it relates to you just and where you are
12 now.
13 A. Bondworth went into receivership and we bought the
14 company out.
15 21 Q. We being?
16 A. A group, my brother and myself.
17 22 Q. This group, were these people who were involved in
18 it already?
19 A. No, friends of mine.
20 23 Q. Friends of yours. Can you tell me who they were?
21 A. They were the McGrath Group.
22 24 Q. You bought out the company?
23 A. We bought out the company from the receiver.
24 25 Q. The entire of Bondworth itself?
25 A. No, no.
26 26 Q. Just Odearest?
27 A. Yes.
28 27 Q. That was when, Mr. McCarthy?
29 A. That would have been, again to the best of my
6
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1 recollection, it would have been 1972 or 1973.
2 Don't hold me to those dates.
3 28 Q. Okay, but roughly around then. Did you continue to
4 run Odearest, is that what happened?
5 A. Yes, but with the help of people who were nominated
6 from the McGrath Group.
7 29 Q. Did it continue to trade under the name Odearest?
8 A. It did.
9 30 Q. Your position was what then?
10 A. For a time I was managing director and then I think
11 I became chairman.
12 31 Q. What is your present position?
13 A. No, I have retired.
14 32 Q. You have retired since when, roughly?
15 A. If I knew you were going to ask me these questions,
16 and I have no objection to you asking
17 ....(INTERJECTION).
18 33 Q. If you cannot be precise, that is alright.
19 A. Early 1980's.
20 34 Q. That is grand.
21 A. I could be wrong about that.
22 35 Q. You are retired some years?
23 A. Yes.
24 36 Q. You are not in business now?
25 A. I was a director of companies, do you want me to
26 tell you about that?
27 37 Q. If you would, yes.
28 A. I was a Director of Eagle Star for about 25 years.
29 I retired from that this year. I am in my
7
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1 80th year, so they kept me for a long time. I was
2 on the Board of Beaumont Hospital for 20 or
3 25 years. I was on the Board of Leopardstown for
4 30 years.
5 38 Q. Leopardstown Hospital?
6 A. No, Leopardstown Racecourse. I was on the Racing
7 Board for 30 years. I was senior steward of the
8 Turf Club for 12 years and I am now presently
9 Chairman of the Drugs Centre in Pearse Street. I am
10 Chairman of the Charitable Trust which funds
11 research for Beaumont Hospital.
12 39 Q. Fine, thank you very much, that is grand for your
13 career. If we can have a look at your statement
14 (Exhibit 1) which you sent to us in answer to our
15 letter. You tell us at (B) of your statement that
16 you have never to your knowledge knowingly had any
17 dealings with the company. Now, the company in your
18 statement and in our previous letter refers to
19 Ansbacher or as it was formally called Guinness
20 Mahon Cayman Trust Limited.
21 A. Yes.
22 40 Q. To the best of your knowledge you have never had any
23 dealings with it?
24 A. That's right.
25 41 Q. Therefore you say at (C) you do not have any books
26 or documents. You say then at (D) that in the past
27 you have had dealings with Guinness Mahon Ireland
28 and I would like to ask you about that in a moment.
29 You go on at (E) and over the page, the top of your
8
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1 second page of your statement to say that the bank,
2 Guinness & Mahon, informed your solicitors that
3 there was an Ansbacher account entitled Re College
4 Trustees in which was listed payments to certain
5 offshore entities including payment to a Guernsey
6 incorporated company named Chunga in which
7 Mr. Traynor, on behalf of the bank, had invested
8 some monies belonging to you in 1973.
9
10 What I would like to ask you about is, firstly, your
11 contact with Guinness & Mahon itself and your
12 relationship with it and, secondly, your
13 relationship, if any, with Mr. Traynor himself. If
14 we could just go through these a little bit. Can I
15 ask you, first of all, when you first developed a
16 relationship with Guinness & Mahon, the bank?
17 A. To the best of my recollection I had a small account
18 there and I mean a very small account, a deposit
19 account and I am not exactly certain of this, but
20 something tells me in the back of my mind that I had
21 in around about the 1970's, 1971 or 1972.
22 42 Q. When you say you think you had, did you know
23 Guinness & Mahon at that stage or did you know
24 someone there?
25 A. I knew it as a reputable bank well thought of in the
26 City.
27 43 Q. Why is it that you think you may have had an account
28 there? Where was your normal bank?
29 A. My normal bank was with the Bank of Ireland.
9
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1 44 Q. What makes you think that you may have had an
2 account with Guinness & Mahon?
3 A. It is a very good question, but I am not really
4 certain of the answer to that question. I have a
5 feeling that I had a small account.
6 45 Q. Did you know Mr. Traynor of the bank?
7
8
A. I was at a dinner party in a friend's house some
time before this thing happened.
9 46 Q. Which thing happened?
10 A. Sorry, some time before I made an investment.
11 47 Q. Right, okay.
12 A. That was the only time I ever met him. He was never
13 a friend of mine or an acquaintance. I wouldn't
14 even call him an acquaintance, I suppose I could say
15 he was an acquaintance when I got to know him at the
16 bank but before that I only met him once at a dinner
17 party.
18 48 Q. So you met him at a dinner party and then you say
19 that was just a short time before you invested some
20 money?
21 A. Sorry, if I said a short time ....(INTERJECTION).
22 49 Q. It was some time?
23 A. Yes, not a very long time.
24 50 Q. Tell me about the investment, what was this
25 investment?
26 A. Yes, I will. My late father had horses with Vincent
27 O'Brien who was a famous trainer, as you probably
28 know, the best trainer Ireland ever produced. After
29 my father died, and I knew him very well, he said to
10
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1 me, 'Denis, why don't we have a get-together on a
2 horse?' I said, 'I haven't a lot of money, how much
3 would it be?' He said, 'about £1,400 or £1,500.'
4 So we went to the sales in 1971 or 1972 and we
5 bought a yearling which was subsequently called
6 Miss Chamozzle and that ran well. It ran, I think,
7
8
four times. It was unplaced the first time it ran
and it won then at the Curragh and I think it was
9 second the next time it ran at the Phoenix Park and
10 it won two others. It was sold eventually to Paul
11 Cole, one of the English trainers for
12 .... (INTERJECTION) .
13 51 Q. To Paul?
14 A. Cole, C-O-L-E.
15 52 Q. Yes. So it was on the profits of this sale that you
16 made ....(INTERJECTION).
17 A. Sorry, I am interrupting, £33,000 I got. There was
18 a time, if my memory is true to me, that Irish
19 Permanent was -- interest rates were very high and
20 the Irish pound was in trouble. This was a tax free
21 amount of money as far as I was concerned because it
22 was a horse, I thought that maybe I would talk to
23 somebody in Guinness & Mahon and I was put in touch
24 with the late Mr. Traynor.
25 53 Q. Can you say who put you in touch?
26 A. I can't remember really.
27 54 Q. Had you at that time financial or legal advisors
28 that you might have consulted?
29 A. No, I didn't consult any legal advisors. In
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1 retrospect, you know...
2 55 Q. So it would have been some mutual friend who
3 suggested you talk to Mr. Traynor or to Guinness &
4 Mahon?
5 A. No. I am inclined to do things a bit on the spur of
6 the moment, I think I did it myself on the spur of
7 the moment. I don't remember getting any advice
8 from anybody and certainly I got no professional
9 advice.
10 56 Q. So you contacted Mr. Traynor anyway?
11 A. Yes, I was put in touch with him.
12 57 Q. When you say you were put in touch with him
13 ....(INTERJECTION).
14 A. My recollection is somebody in the bank.
15 58 Q. You went to the bank and they put you in touch?
16 A. Yes, exactly.
17 59 Q. What did he say to you?
18 A. It is nearly 30 years ago.
19 60 Q. I know, as best you can remember.
20 A. He said, 'this is tax free money and as the pound is
21 possibly in danger of reducing in value, this could
22 be put offshore.'
23 61 Q. He actually said that?
24 A. Yes, or words to that effect.
25 62 Q. Yes.
26 A. After some consideration, and I didn't consult my
27 accountants or any professional advisors, that is
2 8 what happened.
29 63 Q. Did he give you any more details than that of what
12
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1 would be done with it? Did he talk to you at all
2 about a discretionary trust?
3 A. He did, but I can't remember exactly what. I just
4 wrote down a few notes, may I look at them?
5 64 Q. You may, yes, certainly. These are notes you have
6 just written for the interview today?
7
8
A. Yes, I wrote them this morning. It doesn't touch on
that particular point you are asking me.
9 65 Q. Maybe if I can ask you some questions and if you
10 think that you have an answer in your notes there,
11 we can refer to them that way. We might focus the
12 thing that way. You think you have some vague
13 recollection that he may have mentioned a
14 discretionary trust.
15 A. Yes .
16 66 Q. Do you think that he suggested to you that that
17 would be a good way of investing your money?
18 A. A safe way.
19 67 Q. A discretionary trust.
20 A. I am not sure what a discretionary trust means.
21 68 Q. That is what I was coming to. Did he explain to you
22 what a discretionary trust was?
23 A. No, and I still don't even know. I have a vague
24 idea.
25 69 Q. You do not recollect him explaining to you in some
26 detail what a discretionary trust was?
27 A. No.
28 70 Q. Did he offer you that as an alternative? Did he
29 suggest to you that you might simply open an account
13
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1 or did you get the impression that what he was going
2 to do was setting up a discretionary trust?
3 A. I had an idea that he was going to invest it as it
4 was tax free and didn't come under the -- or I
5 didn't think it came under any rules or regulations,
6 that it probably would have been a wise way of
7 safeguarding and maybe getting a better income.
8 71 Q. Did he tell you where offshore he might think of
9 investing it?
10 A. On the first day?
11 72 Q. Yes.
12 A. I don't know to be honest, I don't remember.
13 73 Q. Did he at a later stage?
14 A. Oh' yes.
15 74 Q. Where did he say?
16 A. Guernsey.
17 75 Q. In Guernsey?
18 A. Yes.
19 76 Q. Did he say to you that it would be with one of the
20 subsidiaries of Guinness & Mahon in Guernsey?
21 A. He didn't.
22 77 Q. Did he say what bank or what institution it would be
23 invested in?
24 A. I didn't get the impression that it was a subsidiary
25 of Guinness & Mahon but that he had a connection
26 with them.
27 78 Q. Did he say where it was or what company or bank?
28 A. He said Credit Suisse.
29 79 Q. He actually said Credit Suisse?
14
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1 A. He did, yes.
2 80 Q. We are going back now to what year, roughly?
3 A. 1973, I think, or 1974.
4 81 Q. Did he mention College Trustees?
5 A. No.
6 82 Q. He said Credit Suisse?
7 A. Yes.
8 83 Q. Was it decided at that meeting that that was what he
9 would do?
10 A. I might have waited a few days. It would be easy
11 for me to say yes, but I must admit that I can't
12 remember.
13 84 Q. It was either then or some time later that you made
14 a decision that you would go along with this?
15 A. Yes.
16 85 Q. Did you then transfer money to him or how did the
17 actual investment work? Did you give him a cheque
18 or a draft or whatever?
19 A. I think I gave the cheque that I got myself.
20 86 Q. To him?
21 A. Yes, again that is to the best of my recollection.
22 87 Q. That is all we can ask you to do today, to the best
23 of your recollection. Do you recollect what
24 procedures were followed in doing that? Did you
25 sign some document or mandate?
2 6 A. I don't remember signing any document.
27 88 Q. Did you understand that the money would be invested
28 in your name or through the name of some company?
29 A. I didn't think it would be invested in my name.
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1 89 Q. You did not?
2 A. No.
3 90 Q. Why did you not think that?
4 A. Because I think my understanding was that it was
5 possibly a trust.
6 91 Q. The money would be held for you by trustees?
7 A. Or in a trust. I was very raw in those days, I
8 didn't know very much about this.
9 92 Q. Your understanding was that this money would not be
10 held in your name?
11 A. That's right.
12 93 Q. But that beneficially it was your money and you
13 could use it, did you understand that?
14 A. I did.
15 94 Q. Did Mr. Traynor tell you that?
16 A. Yes, that was my understanding.
17 95 Q. Did you understand from Mr. Traynor that although
18 the money would not be in your name, that if you
19 wished you could call upon it, did you understand
20 that?
21 A. Yes, but I think the understanding was that it
22 wasn't a short-term, it was a long-term investment,
23 not a short-term.
24 96 Q. Yes, I understand that, it was not like opening an
25 account that you could withdraw money from the next
26 day if you wanted it.
27 A. No, exactly.
28 97 Q. Did you understand that you could if you wished
29 withdraw money if you needed it at some time?
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1 A. I suppose so, yes, but it wasn't my intention to do
2 that.
3 98 Q. Yes, but you did not feel it was so tied up that you
4 could not access it at all, did you?
5 A. I don't want to be awkward, I really don't think so.
6 99 Q. I think you said this was around 1973?
7 A. Yes .
8 100 Q. You have mentioned in your statement (Exhibit 1) to
9 us here on the second page this Guernsey
10 incorporated company named Chunga.
11 A. That's right, I have a note on that. Chunga seems
12 to be a company in Guernsey associated with Credit
13 Suisse and there does not seem to be any information
14 for the period from 1973 to 1978 in relation to what
15 was happening there. There is no information
16 despite my solicitors having written to Guinness &
17 Mahon, Guernsey and Credit Suisse.
18 101 Q. What you are telling me there now is that you have
19 done some researches at the moment and you cannot
20 find anything out about it?
21 A. Sorry, this was when I reported this to the Revenue.
22 102 Q. This is all in recent times you are talking about?
23 A. Within the last two years.
24 103 Q. What I am really asking you is did you do anything
25 about Chunga at that time? Was it a name
26 Mr. Traynor had mentioned to you in connection with
27 your investment?
28 A. No.
29 104 Q. Had you heard of Chunga at that time?
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1 A. Credit Suisse was there in my brain.
2 105 Q. Is the first time you heard of Chunga when Guinness
3 & Mahon contacted you or had you known about it?
4 A. I don't know, I don't want to in any way say
5 anything that is not what I know for 100%.
6 106 Q. Let me put it another way; are you happy that Chunga
7 is a company connected with your investment?
8 A. Yes, I think so, yes.
9 107 Q. Did you over the years -- sorry, I should ask you
10 how long this investment continued for or is it
11 still in existence or what happened to it?
12 A. When the settlement or when we proceeded to make a
13 settlement with the Revenue, the money had gone then
14 to a company called Garenne Trust and their only
15 asset was a loan of approximately £138,000.
16 108 Q. Sorry, when you say the money had gone to a company
17 called Garenne Trust?
18 A. It was a loan to Garenne Trust.
19 109 Q. When did all this happen? Before the settlement
20 with the Revenue, was it?
21 A. Oh' yes.
22 110 Q. Maybe we could follow the history a little bit of
23 it. This money was invested by Mr. Traynor in
24 Guernsey?
25 A. Yes.
26 111 Q. Then you say it went to a company called Garenne
27 Trust?
28 A. No, sorry, I may be misleading you there. One
29 single investment was made by me, one single. I
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1 didn't take any money out of my pockets or my income
2 and throw it over there. I just had one single
3 investment.
4 112 Q. Yes, I understand. Mr. Traynor invested that for
5 you in Guernsey?
6 A. Yes.
7 113 Q. With Credit Suisse, as you understood it?
8 A. Yes.
9 114 Q. And connected with that was this company Chunga?
10 A. Yes, apparently. It says here or my recollection
11 anyway at least, and I think this is correct;
12 "Chunga's only asset was a loan ofapproximately £138,000 to the Garenne
13 Trust. This loan was forgiven."
14
15 115 Q. Mr. McCarthy, you say you jotted this down this
16 morning.
17 A. Yes.
18 116 Q. Where would you have got all that information from
19 this morning?
20 A. From letters that were sent to the Revenue.
21 117 Q. By you?
22 A. My solicitors.
23 118 Q. These are letters relating to this investment?
24 A. Yes, they must be.
25 119 Q. If they are relating to this particular investment
26 and this is the investment that we are looking at
27 here, it would be relevant to us to see those
28 letters insofar as they relate to this aspect. We
29 are not concerned with other tax affairs of yours in
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1 any way if you have other tax affairs.
2 A. No, I have no ....(INTERJECTION).
3 120 Q. We are not concerned with your affairs and your
4 discussions with the Revenue in any way. What we
5 are concerned with ....(INTERJECTION).
6 A. My other tax are absolutely and always have been...
7 121 Q. I understand. What we are concerned with is any
8 documentation you might have in relation to this
9 investment you made through Mr. Traynor which
10 resulted in what appears to be the setting up of a
11 Trust. If you have documents that actually show
12 what happened to the investment.
13 A. I am not sure. May I talk to my solicitor?
14 MS. MACKEY: Certainly you may, yes.
15 MR. 0'GRADY: May we go outside?
16 MS. MACKEY: Certainly.
17
18
19 (SHORT BREAK)
20
21 MR. 0'GRADY: Mr. McCarthy's view on
22 instructions to us would
23 be that the documentation in relation to this
24 investment on advice from us did not come within the
25 ambit of Schedule C or Appendix C to your letter.
26 If you are saying that it is relevant and he set out
27 everything in the statement or any connection that
28 he is aware of between the company and his
29 investment, if you are saying to us that that
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1 documentation is relevant, we will of course be
2 happy to provide that.
3 MS. MACKEY: That is what we are saying
4 and in fact I am going to
5 ask Mr. McCarthy to look at some Guinness & Mahon
6 statements now of the account of Guinness Mahon
7 Cayman Trust which is Ansbacher showing transactions
8 in relation to Chunga.
9 MR. 0'GRADY: Could I say finally or
10 submit as my final input
11 that we have requested copies of that documentation
12 from Guinness & Mahon and as of today we have not
13 received it.
14 A. That is in the statement, isn't it?
15 MS. MACKEY: Yes, it is, Mr. McCarthy.
16 On the basis of this and
17 what I am now going to show Mr. McCarthy, we say
18 that this documentation would be relevant to us
19 ....(INTERJECTION).
2 0 MR. 0'GRADY: And comes within the ambit
21 ....(INTERJECTION).
22 MS. MACKEY: Comes within the ambit
23 because it connects Chunga
24 with Ansbacher and, therefore, any investigation of
25 Ansbacher is entitled to look into Chunga which, as
26 Mr. McCarthy has explained to us, is a company
27 connected with the investment, therefore we are
28 entitled to look at the investment.
29 MR. 0'GRADY: The difficulty was we
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1 did not know precisely
2 what the connection between them was.
3 MS. MACKEY: I understand that. That
4 is fine and it was not
5 clear, I think, to any of us, either to ourselves or
6 to Mr. McCarthy until we began to tease the thing
7 out now with you what the connection exactly was.
8 A. The only thing is I never had anything to do with
9 the running of Chunga. All I know is that the
10 investment was made or appeared to have been made.
11 122 Q. That is the point and I think you have explained
12 that to us when you say that in fact the account was
13 not in your name or the Trust was not in your name
14 and that explains why you had nothing to do with the
15 running of it. Mr. Traynor, presumably, looked
16 after all that and it was done, it would appear,
17 through Chunga or in connection with Chunga.
18
19 Anyway, if I might just pass you a document or two
20 here to have a look at. First of all, page 28
21 (Exhibit 2). (SAME HANDED). This is a statement,
22 Mr. McCarthy, issued by Guinness & Mahon in Dublin
23 and it is a statement of an account that was held
24 with them. You will see the name at the top, it is
25 GMCT/College Sundry Sub-Account. I will explain to
26 you what that actually is. In Guinness & Mahon in
27 Dublin there was at that time, that is 1982, there
28 was at that period an account in the name of GMCT
29 which is Guinness Mahon Cayman Trust, and that is
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1 the former name of Ansbacher, the company we are now
2 investigating. The account was in the name of
3 Guinness Mahon Cayman Trust with a reference College
4 or College Trustees, as you see there GMCT/College
5 and what it was was a subsidiary of Guinness & Mahon
6 College Trustees in Guernsey placed money of Irish
7 investors into Ansbacher, into Guinness Mahon Cayman
8 Trust and that money was held in Guinness & Mahon in
9 Dublin in this particular account and transactions
10 relating to that money passed through this
11 particular account. The account in total comprised
12 the pooled money of numerous investors, Irish
13 investors who had money in the Channel Islands with
14 College Trustees of whom Credit Suisse is the parent
15 company in fact. If you see there in the
16 Particulars you will see the date of 20th December
17 1982 and you see Re Chunga, do you see that there,
18 Mr. McCarthy?
19 A. Yes.
20 123 Q. You see a credit of £1,000. That shows that the
21 company we have been talking about, Chunga, lodged
22 money or money was lodged on behalf or Re Chunga to
23 this account which is the Ansbacher/College Trustees
24 account in Guinness & Mahon. That is how we link
25 your Chunga and your investment with Ansbacher and
26 that is why we are talking to you today. What would
27 appear to have happened is that Mr. Traynor having
28 invested your money in Guernsey with Credit Suisse
29 of which College Trustees is a subsidiary, College
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1 Trustees in turn placed your money along with a lot
2 of other peoples' money with Ansbacher which at that
3 time was called Guinness Mahon Cayman Trust who in
4 turn placed it in this account in the name of both
5 of them, Guinness Mahon Cayman Trust and College in
6 Guinness & Mahon, and so we see Chunga appearing
7 there with a credit. That would appear to be money
8 that was lodged in connection with Chunga or perhaps
9 through the Trust, it is not very clear, but you can
10 see from that that a transaction relating to Chunga
11 has passed through this Guinness Mahon Cayman
12 Trust/College account. Does that not appear from
13 that document to be the case?
14 A. I have never seen that.
15 124 Q. I understand that. You may keep this document, it
16 is one of the ones, presumably, Guinness & Mahon
17 will furnish to you when they finally get around to
18 furnishing you with the documents you have asked
19 them for.
20 A. In any valuations that I got, that didn't come into
21 it.
22 125 Q. It is in the light of that that we do consider that
23 the documents for which you drew up your notes this
24 morning would be relevant to our enquiries and we
25 would ask you if you would furnish those to us so
26 that we could ....(INTERJECTION).
27 A. The ones to the Revenue?
28 126 Q. Let me put it this way Mr. McCarthy, whatever the
29 source documents you used for the notes that you
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1 drew up for the interview here today, the ones you
2 have been reading to us from, wherever you got the
3 information that you put into those notes would be
4 relevant to us.
5 A. They came from...
6 127 Q. If you would furnish those to us, we would be
7 grateful.
8 A. A copy?
9 128 Q. Yes, a copy, of course. Anything you have in
10 relation to Chunga or in relation to the investment
11 that Mr. Traynor made for you or in relation to this
12 Trust -- what did you call it again?
13 A. Garenne.
14 129 Q. How do you spell that?
15 A. I think it is G-A-R-E-N-N-E.
16 130 Q. Thank you. Anything you have in relation to those
17 would be of relevance to us and we would ask you if
18 you would furnish them to us.
19 A. Yes .
20 131 Q. That would be grand. Mr. McCarthy, just moving on a
21 little bit from that, did Mr. Traynor give you any
22 code or reference for your account? Did he ever
23 mention to you "B/G" as being a code or reference?
24 A. No.
25 132 Q. He never did?
26 A. Not to my recollection.
27 133Q.
Okay. In the course of the years up to the time
28 that you concluded your transactions with the
29 Revenue -- sorry, did you then close this Trust or
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1 account at that point?
2 A. Yes.
3 134 Q. You went and closed it down, you instructed
4 Mr. Traynor to close it, did you?
5 A. He was long dead.
6 135 Q. Was it Mr. Collery then? How did you close it down?
7 A. Directly with Guernsey.
8 136 Q. Who did you speak to there?
9 A. (Pause).
10 137 Q. Was it a Mr. Ellis?
11 A. It probably was.
12 138 Q. Brian Ellis?
13 A. There was another man, Woodward.
14 139 Q. Christopher Woodward?
15 A. No, I don't think it was Christopher.
16 140 Q. It may have been Mr. Woodward or it may have been
17 Mr. Ellis?
18 A. Yes.
19 141 Q. Had you had contact with Mr. Ellis, does that name
20 ring a bell with you?
21 A. Yes.
22 142 Q. Brian Ellis?
23 A. Yes, but not very much.
24 143 Q. He would be one of the officials in College Trustees
25 in fact, Brian Ellis.
2 6 A. I didn't know that.
27 144 Q. Over the years did you have contact directly with
28 these people at all stages for information and
29 transactions did you go through Mr. Traynor?
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1 A. In what regard? For what reason?
2 145 Q. For anything you wanted to do in relation to your
3 Trust, either information or transactions?
4 A. No, I would get valuations from time to time.
5 146 Q. You mean statements of the balances?
6 A. Yes.
7 147 Q. Where would you get those from?
8 A. In Guinness & Mahon or maybe sometimes sent
9 directly.
10 148 Q. From Guernsey?
11 A. I am not sure.
12 149 Q. Do you have any copies of those still?
13 A. No. Five years ago we had a house in Temple
14 Gardens, I have seven children, a big house and five
15 years ago approximately we sold that house and moved
16 to an apartment in Ballsbridge. My wife, Rhona,
17 decided that she wouldn't be able to take all the
18 paperwork which was a huge amount of paperwork
19 because of my involvement in various businesses,
20 some of them I didn't even mention to you. There is
21 nothing very sinister about any of them.
22 150 Q. No, no.
23 A. So she said that she would have to get them -- what
24 is the word?
25 151 Q. Shredded?
26 A. Shredded, yes.
27 152 Q. So a number of these documents got shredded, is it?
28 A. Yes, but this is long before anything like this.
29 153 Q. I understand. That explains why you have not got
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1 the documents. The statements that you got from
2 time to time, you say you sometimes got them in
3 Guinness & Mahon, was it Mr. Traynor who would give
4 them to you?
5 A. I didn't see Mr. Traynor that often. There were
6 various people in there.
7
8
154 Q. Would you go in and ask for a statement or were
these issued regularly to you?
9 A. Not very regularly. I can't remember to be
10 perfectly honest with you.
11 155 Q. Was it just on your request generally?
12 A. Being the kind of person that I am it was probably
13 on my request, but I am not certain.
14 156 Q. Would the statements simply indicate to you the
15 balance of your transactions?
16 A. No, it would give full details.
17 157 Q. Were they headed in some way?
18 A. Credit Suisse as far as I know.
19 158 Q. You do not have any copies. Did they show interest
20 accumulating on the balance?
21 A. Did they show interest?
22 159 Q. Yes .
23 A. I don't understand what you mean by that.
24 160 Q. Did interest accumulate on the balance and did the
25 sum of interest appear on the statements?
26 A. Some of the investments were in equities, there
27 wouldn't be any question of interest.
28 161 Q. So we are not talking about statements showing a
29 figure, a sum of money; are we not?
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1 A. Yes .
2 162 Q. We are?
3 A. Yes .
4 163 Q. That was that on deposit? Was that accruing
5 interest?
6 A. No, as far as my recollection goes, and I hope I am
7
8
being accurate, they came in the form of showing the
investments.
9 164 Q. In other words, showing shares in equities?
10 A. Yes, or maybe in gilts.
11 165 Q. Was the entire of your original investment dispersed
12 in the purchase of shares and equities in gilts or
13 was some of it on deposit itself in some kind of
14 fixed deposit that mounted up?
15 A. I don't think so.
16 166 Q. None of it?
17 A. But I don't know.
18 167 Q. So you do not know then whether interest accrued on
19 your original investment or not, whether there was
20 any sum of it in money that might have earned
21 interest, do you?
22 A. No, but if Goodbodys followed the example of what
23 was happening with the previous people looking after
24 it, after my investment, it probably would have been
25 in shares and in gilts.
26 168 Q. Are we talking about your original investment that
27 you made through Mr. Traynor?
28 A. Yes .
29 169 Q. How did Goodbodys come into this?
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1 A. To the best of my knowledge in the early 1990's,
2 1991 I would say or it could be a year one way or
3 the other, they decided ....(INTERJECTION).
4 170 Q. Who decided?
5 A. Credit Suisse, maybe because of bad performance that
6 they would give the portfolio -- is that a suitable
7 word to use?
8 171 Q. Right.
9 A. To Goodbodys.
10 172 Q. Prior to that from 1973 to 1991, however, Goodbodys
11 did not have the portfolio?
12 A. No.
13 173 Q. So what was happening to your original investment
14 during that period?
15 A. Sorry?
16 174 Q. What was happening to your original investment
17 during that period? From 1973 to 1991 where was the
18 money or what was happening to it?
19 A. I thought it was over in...
20 175 Q. What did you think it was doing there? Was it
21 simply mounting up?
22 A. I thought it was being invested which it was because
23 I was getting some accounts showing the investment.
24 176 Q. These were again purchase of equities and gilts?
25 A. Yes, I think, if I remember correctly, it is
26 possible they might have put some of it into
27 Guernsey.
28 177 Q. Could you have had some of it in foreign currency,
29 US dollars?
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1 A. I don't think so. I don't know, but I don't think
2 so.
3 178 Q. During the course of all those years did you
4 withdraw any of your original investment or use it
5 in any way and have it transferred?
6 A. Yes.
7 179 Q. You did?
8 A. Yes.
9 180 Q. How did you go about that?
10 A. May I have a look at my notes?
11 181 Q. Yes.
12 A. Loans were made to me at a later date.
13 182 Q. Loans?
14 A. Yes, they call them loans.
15 183 Q. Who called them loans, Credit Suisse?
16 A. Yes.
17 184 Q. Can you tell me about those and how that happened?
18 A. How I got them?
19 185 Q. Yes, what you did if you wanted one.
20 A. If I wanted one in the Guinness & Mahon time I would
21 have to ring up Guernsey.
22 186 Q. You would ring who?
23 A. I would ring somebody in Guernsey.
24 187 Q. Where would you have got their phone number from?
25 A. From Guinness & Mahon.
26 188 Q. Do you remember who it was you would phone?
27 A. Different people.
28 189 Q. Do you not recollect any particular name?
29 A. I can't really. Woodward, I think, would be one
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1 name, possibly Ellis.
2 190 Q. What would you say?
3 A. I would say -- well, it usually happened around
4 Christmas time, but this is only in the latter, as
5 far as I know, in the latter period. I would say
6 that I wanted X amount of money for whatever.
7 191 Q. And they would ....(INTERJECTION).
8 A. They would tell me where to collect it.
9 192 Q. Where would you collect it?
10 A. In the Guinness & Mahon time it was in Guinness &
11 Mahon.
12 193 Q. You would go in there and it would be available for
13 you there?
14 A. Yes.
15 194 Q. When you say they called them loans, did you have to
16 repay these?
17 A. No.
18 195 Q. So as far as you were concerned ....(INTERJECTION).
19 A. I only discovered that they called them loans only
20 recently.
21 196 Q. Where did you discover this recently?
22 A. I think it was through our solicitors.
23 197 Q. Through your solicitors?
24 A. I think so, yes.
25 198 Q. Would this be through documentation that you
26 referred to?
27 A. Possibly.
28 199 Q. So all this documentation should show us all of
29 this, should it?
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1 A. No, I can't say that.
2 200 Q. Is there documentation at the moment in the presence
3 of your solicitors that relates to these withdrawals
4 and to this Trust generally?
5 A. Not any more than I am giving you now.
6 201 Q. That you will be giving us?
7 A. I will give you any more that I can remember.
8 202 Q. You will actually give us copies of the
9 documentation, not just notes that you have made
10 from them?
11 A. What do you mean by copies of the documentation,
12 sorry?
13 203 Q. As I understand it from what you have said to us
14 today and especially since you came back from the
15 brief consultation with your solicitor, you have
16 notes there that you made this morning in
17 preparation for this interview and you made those
18 from documents either in your possession or in the
19 possession of your solicitor?
20 A. No, there are some notes made from this statement,
21 for instance, and some notes made from your document
22 here.
23 204 Q. Our letter?
24 A. Yes .
25 205 Q. You were reading out to me there earlier,
26 Mr. McCarthy, information that is not in either of
27 those documents, that was information in relation to
28 the Garenne Trust.
29 A. Yes .
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1 206 Q. I asked you where you got that and you said you had
2 some documents that you got that information from,
3 did I misunderstand you?
4 A. Documents, I don't know if you call them documents,
5 maybe they are documents, under the broad word of
6 'documents'.
7
8
207 Q. In other words, you have that information somewhere
else other than on that bit of paper there today; is
9 that right?
10 A. I think so.
11 208 Q. As I understand from what your solicitor said when
12 you came back into the room, you are prepared to
13 make that available to us if we consider it relevant
14 and we do consider it relevant?
15 A. Yes .
16 209 Q. So you will make that available?
17 A. Yes .
18 210 Q. Grand, that is clear. Just one other question,
19 Mr. McCarthy, and then I am finished.
20 A. Sorry, I don't want to interrupt you.
21 211 Q. Go ahead.
22 A. You don't want me to say anymore about Goodbodys?
23 212 Q. I don't think so, no. That is alright, thank you.
24 One other question I want to ask you, you have
25 explained to us about the withdrawals and what I
26 want to ask you is did you after the first
27 investment make any additions to the fund, any
28 further lodgments?
29 A. Not a penny.
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1 MS. MACKEY: Not a penny, okay. I have
2 no further questions,
3 Mr. McCarthy, thank you very much. Mr. Rowan may
4 have some questions.
5
6 213 Q. MR. ROWAN: Mr. McCarthy, fairly early
7 on in the interview you
8 mentioned that your initial investment with Guernsey
9 was made by Mr. Traynor and it was the proceeds of
10 the sale of the horse.
11 A. Half the proceeds.
12 214 Q. So half the proceeds I think you indicated
13 represented about £33,000?
14 A. Yes.
15 215 Q. A little later you indicated to us that Chunga's
16 only asset, I think was the way you put it, was
17 loaned to the Garenne Trust and I think you referred
18 to it as £138,000.
19 A. I have a note here the only asset appeared to be a
20 loan of approximately £138,000 to the Garenne Trust
21 and that was done without my knowledge or
22 initiative.
23 216 Q. I think my question has to be how did £33,000 get to
24 be £138,000 if you did not make any further
25 deposits, as you indicated to Ms. Mackey?
26 A. I think there was more in Chunga than my £33,000.
27 217 Q. Can you give me some explanation of that?
28 A. I don't know. I have sworn and I will swear again
29 that I never gave another penny, I cannot explain it
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1 to you and I might have got it all baw ways, but I
2 certainly never gave one shilling or one penny extra
3 for investment to Guernsey or to Guinness & Mahon.
4 I can't explain it.
5 t—1
CO
Q. Presumably, Mr. McCarthy, your investment was
6 growing in value over a number of years?
7 A. I would say so.
8 219 Q. So it would have been expected to have seen an
9 increase therefore in the value of it and that might
10 be a partial explanation?
11 A. Yes.
12 220 Q. Were there any other people involved in Chunga other
13 than yourself?
14 A. I don't know, Chunga has only been coming into my
15 mind in very recent times. I thought, maybe very
16 stupidly, that Credit Suisse had an account for me
17 taking care of the £33,000 that was invested and
18 Chunga is a name that has been haunting my mind but
19 I don't know of anybody that has any money in Chunga
20 except myself, but there may have been, I don't
21 know.
22 221 Q. The document from which you were able to ascertain
23 that £138,000, may we please have a copy of that
24 document specifically?
25 A. I am very stupid now and I should be able to tell
26 you where it came from, but I am sure it is there.
27 222 Q. May we please have a copy of it?
28 A. Yes.
29 223 Q. Thank you. You explained to us that in the early
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1 1990's Credit Suisse became disenchanted with the
2 management of your portfolio of investments,
3 disenchanted, presumably, with the way it was being
4 managed and moved to Goodbodys.
5 A. May I comment on that?
6 224 Q. Yes.
7 A. I didn't say, with the greatest of respect to you,
8 that they had become disenchanted, but it could be
9 an explanation, it is a possible explanation but
10 they didn't tell me they were doing it until it was
11 done and they never came to me and said, 'they are
12 not doing very well, we better go somewhere else.
13 We have gone to Goodbodys.' They did go to
14 Goodbodys without telling me, but I don't remember
15 them saying, 'your investments are not being looked
16 after properly.' I am inferring that they wouldn't
17 move, like you probably are, with the greatest of
18 respect, but they would hardly move if they were
19 selling them.
20 225 Q. Disenchanted was my interpretation of what I thought
21 was going on. You did not say that. It was really
22 the period up to that point that I was interested in
23 because you had an interest in Chunga and you also
24 had an interest in Garenne and over the period
25 College Trustees were managing the value of those
26 funds. I would like to understand a bit more about
27 that process, if I may. For instance, you obtained
28 from them periodic statements of your investment at
29 your request.
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1 A. Maybe not always at my request.
2 226 Q. But you obtained periodic statements?
3 A. Yes.
4 227 Q. Those statements would have shown you a portfolio of
5 investments which might have included money on
6 deposit?
7 A. I don't know and there is no point in me saying I do
8 when I don't know what they included. It is too
9 long ago, I can't remember.
10 228 Q. Mr. McCarthy, might there have been some money on
11 deposit?
12 A. You mean cash?
13 229 Q. Money on deposit, yes, a deposit account?
14 A. Anybody in the room could say yes or no, I honestly
15 don't remember.
16 230 Q. Might there have been details of some equities in
17 gilts which you mentioned?
18 A. I would imagine so, yes.
19 231 Q. Might there have been a holding of shares in
20 non-publicly quoted companies?
21 A. I wouldn't think so.
22 232 Q. Might there have been balances held in other
23 currencies?
24 A. I can't remember, but I don't think so.
25 233 Q. Essentially what you can remember is that there were
26 investments, inequities or gilts?
27 A. I am not saying that is the full extent but that is
2 8 what I can remember.
29 234 Q. If you can remember that, may I enquire did you have
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1 periodic discussions with College Trustees about
2 what equities or gilts your holdings should be held
3 in?
4 A. I never met College Trustees and I never had any
5 discussions with College Trustees.
6 235 Q. Let me ask you a more open question then; who was it
7
8 A.
who decided what your fund should be invested in?
I would say the people in Guinness & Mahon.
9 236 Q. The people in Guinness & Mahon?
10 A. Yes .
11 237 Q. Guinness & Mahon where?
12 A. In Dublin.
13 238 Q. In Dublin?
14 A. That is my impression.
15 239 Q. So the people in Guinness & Mahon Dublin decided
16 what investments would be bought or sold?
17 A. To the best of my recollection.
18 240 Q. You were perfectly comfortable with this
19 arrangement, it worked well from your point of view?
20 A. I wasn't focusing my whole mind on this investment,
21 maybe I should have been but I had a lot of things,
22 I took on far too much in those times. To ask me
23 was I satisfied or was I not satisfied -- I mean I
24 am 27 years out of it, I can't really remember.
25 241 Q. I appreciate that a lot of detail slips from one's
26 mind, but I am sort of asking you
27 .... (INTERJECTION) .
28 A. I am not trying to be difficult.
29 242 Q. No, no, I appreciate that. I am sort of asking you
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1 for impressions that you have because quite clearly
2 you had a sizeable sum of money with Guinness &
3 Mahon and if that had been diminishing in value,
4 presumably you would have observed that?
5 A. As you know much better than I would know, markets
6 go up and down and have gone up and down over the
7 years, so I would be aware of that and that would
8 have a consequence on the value of any portfolio.
9 243 Q. It was likely that some shares did well and some
10 shares did not do so well in the ordinary course of
11 equity investment?
12 A. Yes.
13 244 Q. If there were investment gains made on occasion, how
14 were those dealt with from a taxation point of view?
15 A. They weren't taken out of the fund because they went
16 up. The only reason that I looked for any cash was
17 around the Christmas time and that is a general
18 statement. It wasn't triggered off by a fund going
19 up or down.
20 245 Q. I am conscious, Mr. McCarthy, that it is past
21 1 o'clock and I know we all need to get some
22 refreshment. Just one final question; did you make
23 any returns to the Revenue Commissioners in respect
24 of any interest that you may have earned over the
25 years on this fund that you had in Guernsey?
26 A. The Revenue are aware, fully aware of the whole
27 situation. The quick answer is that I didn't.
28 246 Q. You did not make any returns but you have since been
29 dealing with the Revenue?
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2 247 Q. On the matter?
3 A. Yes.
4 MR. ROWAN: Alright. Mr. McCarthy,
5 thank you very much indeed
6 for coming in to answer questions today. The
7 questions and answers will be transcribed and
8 Ms. Cummins will be in touch with you in due course
9 about getting you to come back in to sign a copy of
10 that transcript.
11 A. Right.
12 MR. ROWAN: Ms. Cummins will have a
13 brief conversation with
14 you on your way out about the documents which we
15 have discussed with you this morning and which we
16 hope you will be able to provide us with in due
17 course.
18 MR. 0'GRADY: May I just clarify what
19 you require in that
20 regard, essentially you have told Mr. McCarthy that
21 College Trustees managed his fund, so to that extent
22 ....(INTERJECTION).
23 MS. MACKEY: No, we have not told
24 Mr. McCarthy that College
25 Trustees managed his fund. We have told
26 Mr. McCarthy and yourself the connection between
27 College Trustees and Guinness Mahon Cayman Trust.
28 MR. 0'GRADY: We did identify in the
29 statement that we were
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1 told there were some payments and I am not sure
2 whether it was yourself or Mr. Rowan who said
3 something to that effect or put it to Mr. McCarthy
4 that College Trustees managed his investment.
5 MS. MACKEY: We asked you if College
6 Trustees did. Essentially
7 what we are looking for from Mr. McCarthy,
8 Mr. 0'Grady, are any documents he has in connection
9 with his original investment made in what he
10 understood to be Credit Suisse but which would
11 appear it would seem to be College Trustees.
12 A. Not to my knowledge.
13 MS. MACKEY: Not to you knowledge. In
14 any event, whatever he has
15 in connection with that investment to Credit Suisse,
16 anything he has in connection with the Garenne Trust
17 and any documents which were the basis of that note
18 that he prepared today for our interview and which
19 he has read.
20 MR. 0'GRADY: I suspect in fairness to
21 him that the document may
22 have been, and I am speculating, but may have been
23 prepared from correspondence with the Revenue and
24 not from original documentation.
25 A. Yes.
2 6 248 Q. MS. MACKEY: Presumably the
27 correspondence for the
28 Revenue was prepared from something else.
29 MR. 0'GRADY: There may well be, I
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1 simply do not know.
2 Presumably you do not require our file in relation
3 to correspondence to and from the Revenue?
4 MR. ROWAN: I think our difficulty is
5 that we learned from
6 Mr. McCarthy in response to our questions, we
7 learned some information this morning. That
8 information was available from some other source.
9 If that source was a document and we believe it was
10 applicable to the purpose of our interview today,
11 then we would like a copy of that document. We do
12 not exactly know what the documents are and you will
13 have to ascertain that with your client.
14 MR. 0'GRADY: I would simply like to
15 make the point as well
16 that the connection between College Trustees is not
17 something that Mr. McCarthy would have been aware
18 of.
19 MS. MACKEY: We appreciate that totally
20 and we are not in any way
21 making a criticism of Mr. McCarthy for not providing
22 this information to us, not at all, and we would not
23 like you to think that. We are simply clarifying
24 with you now, now that we have a broader picture, of
25 what it is we would like. Basically what we want is
26 the basis on which he prepared those notes and gave
27 us some information that he has jotted down there
28 today. For example, as Mr. Rowan said earlier, he
29 was able to indicate that the sole asset of Chunga
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1 was a sum of £138,000 and that information came from
2 somewhere.
3 MR. 0'GRADY: It was a loan of
4 £138,000.
5 MS. MACKEY: That information is
6 somewhere that we have not
7 seen yet, so that is the kind of thing that we are
8 looking for. Anything in relation to Garenne,
9 anything in relation to Chunga and anything in
10 relation to the investment with Credit Suisse in
11 Mr. McCarthy's possession or power is basically what
12 we are looking for.
13 MR. ROWAN: I think also we are
14 dealing with
15 Mr. McCarthy's recollection and it is a long time
16 ago and we fully understand that, but we also know
17 from other aspects of our investigation that Credit
18 Suisse became involved at a particular time with
19 Guernsey and the transition from Guinness Mahon
20 Cayman Trust to Credit Suisse and so on all have
21 time scales on them.
22 MR. 0'GRADY: Again you are saying the
23 transition from Guinness
24 Mahon Cayman Trust, that is something of which we
25 are not aware. We have been informed by Guinness &
26 Mahon that there were payments into this account,
27 this Guinness Mahon Cayman Trust account from
28 Chunga. You are inferring that Guinness Mahon
29 Cayman Trust managed the ....(INTERJECTION).
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1 MS. MACKEY: We are not inferring
2 anything.
3 MR. 0'GRADY: When you said the
4 transition from Guinness
5 Mahon Cayman Trust -- I am really trying to
6 ascertain precisely what you require and that is why
7 I am asking this.
8 MS. MACKEY: What we require is
9 precisely what I have
10 said. We can leave aside all inferences or what may
11 have transmogrified into what. We need anything you
12 have on Chunga, anything you have on Garenne, and it
13 is quite specific, and anything you have on the
14 investment with Credit Suisse. Those three aspects,
15 any documents referring or relating to those three
16 aspects.
17 MR. 0'GRADY: Okay, thank you.
18 A. I would just like to thank you for your kindness.
19 MS. MACKEY: Thank you, Mr. McCarthy.
20
21 END OF INTERVIEW
22
23
24
25
26
27
28
29
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SoVJUxtor
2% p ^ V K S t tflOOO
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IN THE COMPANIES ACT, 1963-1999
AND IN THE MATTER PART H OF THE COMPANIES ACT, 1990
AND SECTIONS 8 AND 17
AND IN THE MATTER OF ANSBACHER (CAYMAN) LIMITED
(FORMERLY GUINNESS MAHON CAYMAN TRUST LIMITED, ANSBACHER LIMITED
AND CAYMAN INTERNATIONAL RANK AND TRUST COMPANY LIMITED)
STATEMENT OF DENIS McCARTHY
A. By undated letter r e c e i v e d fay me on 14 April 2000 (die "Inspectors' Letter") addressed to
me and signed by the three inspectors (the "Inspectors") appointed by the High Court to
Ansbacher (Cayman) Limited (the "Company") I have been requested to provide as
unsworn statement inrelationto the matters set out in appendix C ("Appendix C") to the
Inspectors' Letter.
B. I have never to die best of my knowledge knowingly had any dealings with the Company
and had never even heard of the Company until in recent times I saw references to it in die
newspapers.
C. Because I have not, to the best of my knowledge, had any dealings with the Company, I do
not have any books or documents in my custody or power relating to die Company.
D. I have in the past had dealings with Guinness & Mahon (Ireland) Limited (die "Bank").
E. By letter dated 17 November 1999 die Bank indicated to me that I might be a person who
could be affected by the terms of High Court orders dated 13 September 1999 and 11
November 1999 (copies of which I attach). By further letter dated 6 December 1999 the
Bank indicated to me that I might be a person affected by the direction of the Inspectors
contained in a letter dated 24 November 1999 from the Inspectors to fee Bank (copy of
which is attached). As I had never, to the best of my knowledge, had any dealings with the
Company, I passed the said letter dated 17 November 1999 on to ray solicitors, who
telephoned fee Bank to seekan explanation for the Bank's opinion that I might be a person
who could be affected by die terms of High Court orders dated 13 September 1999 and 11
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November 1999. The Bank informed ray solicitors that there was an Ansbacher accountwhich was entitled Re College Trustees in which was listed payments to certain offshore
entities, including payments to a Guernsey incorporated company named Chunga in which
Mr Des Traynor, on behalf of the Bank, had invested some monies belonging to me in 1973.
My solicitors were informed that there were three references to Chunga in the account,
which, the Bank said, appeared to be references to fees n respect of company form ation
services and annual administration fees. The Bank-indicated that the monies involved were
very small and that they were notifying me merely as a precaution.
F. I have requested the Bank to ftirniah me with copies of all documents in their possession
relevant to die matters outlined above. I do not have any documentation relevant to the
payments from the Ansbacher account entitled Re College Trustees in my possession. I
intend to forward any documentation ftirnished t^ die Bank to me in relation to the matters
outlined above to the Inspectors.
G. I am willing to attend before die Inspectors for die purpose of being examined in relation to
any information contained in this statement or in any docnments which I may be in aposition to forward to the inspectors upon receiving a reply from the Bank.
H. Regarding the matters set out in Appendix C, the position is,to the best of my knowledge,
and, subject to my comments in paragraphs^and /above (which comments represent die
totality of my knowledge of die matters upon which I have commented), as follows (in the
same numerical order as the items referred to in the Appendix C) :-
1. I did not cause to be executed a deed of trust or other instrument in the CaymanIslands or elsewhere whereby the Company or some other person associated with it
or acting at its direction was a trustee or managed a trust, nor did I transfer monies
or other assets to any such trust, nor did I cause to be established in the Cayman
Islands a body corporate to which I caused to be assigned money or other assets
which were managed by the Company or some other person associated with it or
acting at its direcdon.
2. I did not avail of die service or of a service of a similar type offered by theCompany to that outlined in paragraph 2 to Appendix C.
O A
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3. I did not avail of die service or of a service of a similar type offered by the
Company to that outlined in paragraph 3 to Appendix C.
4. I did not avail of the service offered by die Company outlined in paragraph 4 to
Appendix C.
5. I did not avail of tbe service offered by die Company outlined in paragraph 5 to
Appendix C.
6. As I did not avail of any services provided by die Company, tbe issue of whether or
not I or someone on my behalf applied under die Exchange Control Acts for
7. I did not avail of the service offered by the Company outlined in paragraph 7 to
Appendix C.
8. No company or trust in which I had a direct or indirect interest or which was
directly or indirectly controlled by me or whose income or part of whose income I
had power to enjoy had any dealings with die Company.
Signed: DENIS MCCARTHY
permission in relation to any such transaction does not arise.
1 ^day of 2000.
M:\Brownem\TOG\McCtrtfay.doc
« r—
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Appendix XV (152) (l)(c)
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BANKERS*
•» .••
P p
ft i
.IT,
ACCOUNT
NAME
CURRENCY
ACCOUNT
DESCRIPTION
GHCT /COLLEGE SUNDRY SUU CO
STtRLlNG
fcXTERNALLEDGER
GUINNESS+I17 College Green Dublin 2 P.O. BotO
ACCOUNT NUMBER
STATEMENT DATE
T ; .D A T £
PA R TICU LA RS VA LUE: DA TE DEBIT CREDI T
1,1)00.Qljj
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Appendix XV (152) (1) (d)
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fctVMUNCUS <M«T CHttM'M*
1,1, HUill(K1IMM. (Hk»(M»IT LEDGER
7W44
MMMrMMMf H7Ji/B.W4i
•ttrwnf MI lomvil
it
M
•II
• II
It
IS
•t
O 4
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Appendix XV (152) (1) (e)
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X. Definitions.2. B » Proper taw inc ludin g Power to change such
Iw.
3 . T n i t i fox Mia and l a w t M t .
4. Tiuata of laooaa and ca pit al.
5. Powers aa to payaaota to charttlaa.
Si P o m u c b of appoln tamt and id w M M Bt .7. Fowera to exclude and iaclnds Beneflolarias.
B. Payaanta fear t he ba ooflt of atao ra.
of fx u it pro pert y and Powav fox Vfeootaooto d u r g i faea and to pay ( d m .
10. Power to f a n BI^I«1«» and other ae t l t iaa .
11. Power not to interfe re la aanageatnt.
12. m m c to i i t a loans .
13. h w u i to a a ll , laaaa and exchange, tovo ti Mid ( I w proxies.
14 . fo m n r e la t ing to Cha t t e l s .
15. eaaaral proris iona relating to tha exercise
of Powers.16. m m t o w ; the y a w n k m v t e .
17. U a l t t t l M as to twaawi— of Powers.
18. AppolllL—UL of M I k n t l M .
19. Tnd—nl fl cat lco of M tlx iag Truateea.
20. General lad an i ty of Trus tees .
21 . I m i a l o w aa to d iscloaure of lafoxaat ion .
22. Maaa
23. Vewur to eh«t* m m .24. Irrevocability of SattiLwe*.
Bchadulas
1. In i t ia l Sat t lad Proper ty . :2. Pixst aaia Beiteficlariaa.
3. Kxcludad paxaona.
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T H I S D I C L k l t T I O l OF T R U S T is sad* theF**r d«y of I^cmmma one Thousand Nine Bundred
and £>tf*rr
a *
COLLEGE TRUSTEES LZMZRD of St. Julian's Court, St. Julia's
Avenua, St. Pa ar Port, Guernsey (hereinafter called "the
Trustees").1 0 1 T i l l D S S S I K I I I I I f l aa fbUcMat-
1. In thia Settlement itemir the context permits the following
worts have tha fallowing aaaniagai- .
(a) "tha Beneficiaries" asana and Includes all and aay of tha
persons naasd ok described la the aeoood schedule hereto.
Za determining whether or not a past n la cm of tha
Be eflcl arias a« adopted or legitimated person ahall be
treated aa a child of hia adoptive as legltlmetlve parent
aa tha case My ba and of no othax person and n t o n a w
to tba issue.of aagr person ahall inoludi tha children
and raaotar laana at such person through all dagraaai
Ob) "Excluded Persons" aaana «>d'includes all and any of tha
persons naaad oc described la tha third achadwla haratoi<o) "Charity" shall man any trot* foundation, conpaur « •
other hod/ (corporate «f unlnooxporate) established
exclusively far purposesrecognised as charitable fey
. tha lava of tba Island of Jersay and the word "ebaritsble"
ahall ba construsd according yi
(d) "Minor" wherever tba wort shall appear la this Sattlaaant
and only aa far aa It shall appear shall m m any Individual
who has net attained the age of twenty-ana notwithstanding
• that such individual vy by and la accordance with tha law
of his ok bar domicile ba of fall age, and tha obsession
•>*»n aga" "''"'I ba ocnstxusd aooordlaglyi(a) • "hnoa* lncludsa aay individual or any body of persona
oorporafca or un n orporate i
(f). "Tha Trustees" ahall aaan tba Trwstaa or sruataaa for tha
tins being hereof
<g) "Trust Fund" asanat-
(&) tha sua of money mentlooadla tha first icheAile
heretoi
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<11) all M M y , investaents and property paid or cranafarrad to
and aecaptad by tha Trustees aa additions to tha Txuat fundi
and
(111) tba inveataenta and property froa tiaa to tiaa rspraaentlng
such aaoay, inveataeats and additions or any parts thereof,
(h) "9a Trust Period" shall aaan tha period fro* tha data hereof until
whichever of tba following days shall occur first aaoaly i-
(I) tha day cn which shall expire the period of eighty years
after tha execution of this Settlement;
(II) aoch day (if any) aa .the Tim f a nay at their discretion
appoint by deed eaecnted prior to tha day specified la
paragraph (1) of this svfe-elauaai
(ill) the day of expiration of twenty-one years after the death of
tha laat survivor of the Beneficiaries being parsons living
at tha dato hereof wan thou i audi Xeneflciexy aagr not k m
bean a Beneficiary at the tins of tha execution hereof i
(1) "Property" shall aaan n d include any Heal or Personal Property
wharvaoever situate and any rl0ita or Interest legal, equitable or
otherwise in or over such property as aforesaid.
(j) words importing tha naaeoliaa gander ah ll include the feminine
gander.
(k) words la the singular shall tnclwdi tha plural and words la tin
plural shall inolude the singular,this fettle—nt is established mdar and la accordance with the loss of
the Island of Ooanaay and tha rl^ita of all parties and the ooostraction
and affeot of each and every provision hereof shall be nkjtet to tba
exclusive juris iction of and oooa trued and regulated only according to
tha lavs of tha said Island which shall be tha onxi or tha aUalatro-
tion hereof save only that notwithstanding tha foregoing provisioais of
this clause tha True tees a all haws tba power at their discretion to
declare by Instrument la writing or by Deed whichever M y be applicable
according to tha Proper Law of this 8etfTenant (which axprasalon shall
nean tha 1 of' Ouernaey or of such other state or territory as aay have
been fron tiaa to tine declared by the Truatees In aasrolaa of tba powera
conferred by this clause) fron tiaa to tlas executed within tha Trust
period, that this Settlement shall thance forth take effect in accordance
with the law of aoa* other state or territory in any part of Ilia world
(not being a plaoe under the law of which (1) any of tha Trusts, Powers
and Provisions heroin declared and contained would not be oaforosabla or
capable of being exercised and m taking effect or (11) this •ettleaaot
would be capable of being revoked) and tha forun of administration ah ll
thenceforth be the Courts of that state- or territory and tha law of that
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state or territory ahall thancaforth ba applicable to this Sattlaaant
and fvuetheraora tha Truataaa shall have power to sake such conaaquential
altarationa or additions to this SetUeasnt to ensura that tha Trusts,
Powers and Provisions hereof shall (autatla sutandia) be es valid and
affective aa thay are undar tha law of Guernsey which expression herein
shall as an tha law of Guernsey or of auch other stata or territory as
•ay have been froa tiaa to tias dsclared by tba Trustaea in aaarclae of
tha pcMera conferred oy his clause.
the Truataaa ahall stand possessed of tha Trust Fund Ifcon Trust aa to
investsanta or property other than aooey In their abeolute dlscratian
either to pexalt tha sane to reaala aa invested or to sell or convert
into acnsy all or any of such investasnts and Open Trust aa to aonay
with tha like discretion to invest tha s«as in their naaaa or under their
control in asy of tha investaenta hereinafter authorised with power at
tba lika discretion froa tiaa to tias to vary or tranapoae say such
investments for others of a nature hereby authorised.
The Truataaa shall atand poeeeaaed of tha Trust yuad and ahall apply tha
lnooaa tha e roa during tha Trust Period la such Banner and la soch
amounts for the benefit of «jy ons or all of the Banafialarlee as they
Shall la their absolute discretion think fit sad tha Trustees without
prejudice to tha foregoing provision ahall have power to a onsulate such
lnooae as they sea fit for the as-rtana period peradttad by tha Law of tha'
Island of Guernsey and any laoeae accusalatad aa aforeaald ahall fora
part of tha capital of the Trust and at tha eviration of tha Trust
Period QPCM pUBT aa to both capital and laoeae of tha Truet Pund for
all or such one or aora exclusive of tha other or others of tha
Beneficiaries in such shams and proportions If aors thai one sad
ganarally la auch awmar aa tba Truataaa shall then la their Aaolnts
discretion deteraiaa and la default of and Subject to such dsterainatiaa
WON ntar in -equalshares absolutely tax epch of tha Beneficiazi.es aa
shall than ba living ox sxistingi PROVZOB B W bp Beaafioiary nor all
of thaa in ocafelnatloa ahall have any tight of any kind as agalaat tha
Truataaa or tha Truet Pund or any other person or body of persons by
virtue only of being Beneficlaxiea any rule of law, equity or otherwise
to the contrary notwithstanding., in tha-event of tba failure ordetermination of tha Trusts in this clause hereinbefore contained and
subject thereto and to tha provisions of these presents and to tha
Pmers hereby or by lax conferred on tha' Truataaa and to any and every
exercise of such Powers and In the event of no additional Beneficiaries
being sppolntad by the Trustees in exercise of their Powara herein
conferred prior to the eiqpiratiea of the Truet Period the Trustees shall
hold tha Trust Pund upon tha following Ttuatai-
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(a) Mrlng tha Trust Period aa to any In OM of tha Truet Fund accruing
during audi period UPON ntoBT to pay or apply tha aaaa to or far
auch charitable Inatltotlao or institutions or othar charitable
object or lbjeeta a the Trustees shall in tholr absolute
discretion select and In such proportions if sore than one and
generally In such manner as the Trustees shall in their like
discretion determine i
Q>) At the expiration of tha Truat Period OMR fl OR aa to both oapltal
and laccan of the Truat I M for such charitable object or objects
and If aore than one in such shares as the Truataee shall in tholr
absolute discretion determine i and(o) In default of tha exercise of any Power or discretion under this
elanaa and la tha event of the failure or determination of the
other Trusts hereinbefore orwitn nert QPGM TM XT for the Jersey rand
far Pllnd aiildren abeolutely.
notwithstanding tha Truata and Powers hereinbefore daolared aad coata1 nod
tha Trustees ahall have power eaardafela la their abeolute discretion
at any tlas or tlaaa prior to the taraisetion of the * m t Period to pay
or apply any part of tha capital or l aw— of the m a t Pund to or for
auch charitable Institution or inatitotlana or othar diaxltable abject
or objects aa tha Trustees shall la tholr absoluta discretion select and
in such proportions if more than one aad generally suoh Banner as the
Truataea Shall la thair Ilka dlacxation think fit and the receipt lawriting of the Treasurer or othar oftloar of any particular charitable
institution authorised to glee receipts for aonoys paid to that
Institution shall be a aoffloloat discharge to tha Ti as tees for any
pqamt paid to such institution hereunder.
Notwithstanding tha Truata and provisions hereinbefore da ared sad
contained the Truataea auw at tagr tiaa or tlaas ddring the snot Period
if la' thair absoluta discretion they ahall so think fit by " T
Znatrunent or Instruments la writing or oy eed or Deads tfcicharter may
be applicable aooordlag to tha proper 1m of this •ettleaaot rawooabla
during the Trust Period or irrevocable appoint such m» or ether Trusts
Powers and provislo^govoriiod by thalMbf ainyv«rt-*»f-tha-world of
and oonoemtng the Trust Tm/A or any part or parts thereof for thebenefit of the Beneficiaries or any one or more of them exoluelve of
the other or others at such age or tiaa or respective ogee or times
aad in auch shares and proportions aad avbjeet to such taxas and
limitations and with and subject to auch powers of appointment vested .
la any parson or persons and such provisions for maintenance education
or advanceaont or for accumulation of in OM during minority or for tha
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puxpoee of raising s ana or suas of capital or for forfsitura in tha
avant of dssastra, insolvency or bnlmftejr as say ba applicable
according to tha proper law of this Settleasnt and otherwise at tha
discretion of any parson or persons -and with soch discretionary Trusts
and PcMers exercisable by such persona and gaaarally in such nanaar as
tha Truataes nay think fit for tha benefit of such Beneficiaries or any
ana or acre of thea aa sfonssid sad for the pmt|iose of giving effect to
any such appolntaaat by the seat Instrument in writing or Used whichever
•ay bji applicable according to tha proper law of this Sattlaaent revoka
all or any of tha Trusts Powers and provisions herein cxmtial ned with
respect to the Trust Fund or the part or parta' thereof to which audi
appointoasnt ralataa and so that in tha avaat of any audi appoiataant tha
Trnateee shall thanoa orward hold the-Truet Fund or the part or parts
thereof to which such appoint—it relates1 span with and si&ject to the
Truats Pcwsra and provisions so appointed la institution for aqr of the
Trusts Powsra sad provialaas hereof so revoked as aforesaid aid la
priority to the othar Truate towers and provisions hsrala declared aad
contained and. la aay qfpoiatasat under tha foregoing Power tha Truataaa
aay delegate te aay parson or persons all or any of the Powsra and
diacretieaa by this Sattlaaent or by law wriitsd la tha Trustaee.
Notwithstanding the Trusts, Powers sad provisions bsrein declared and
contained tha ttuataea shall have the following Powers emaroisabla
during the Trust Period, that Is to say the Power to eaoluda say persons
or elasa of persona froa the claas of Beneflciarlea hareof aad thePower to Include any persons or claas of parsons In tha claas of
Beaeficiariee hereof and theae -Powersshall be easrcissbla in such a
way as to exclude a person previously inelndsd by tba exercise of these
Powers or -to include a person previously excluded ey ha aaerclaa thereof
without limitation ss to tha audser of tlaes' which a person aay.be so
included sir eaeludsd. aotwithatending anything contained la thia Clause
or la this •ettleaant, la no elrcuuetaaosa ahall any IvnXnrtort Peracn ba
peralttad to be a Bansflclaqr.
Mhere tha Tx us Usee are authorlaed oar required to apply aay laaaas
or capital of the Trust Pund to or for tha benefit of aay person who la
a minor tha Trustees aay in their abeoluta discretion either pqr tba
aaae to him or bar aa his or bar abeoluta property notwithstanding that
he or she is a minor and tha raoslpt of any such alaor Beneficiary if
peralttad by the proper la* of this Ssttleaant shall be a good discharge
' to the Trustees therefor or pay tha aaaa to any paraat or guardian of
such alaor without seeing to the application thareof aad the receipt of
audi paraat or guardian shall be sufficient discharge to tha Trustees
far any laeeat or capital so paid or applied.
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9. thm Truataea ahall ham tha following Powers i-
(a) TO invest or otherwise dlapoaa of or deal with tha Trust Pond and
to exercise their dlaocetloo over the sua aa if they wore ebsolute
henafleial ownera and the following clauses hhall not derogate from
the general Fowars conferred by this clausei
(b) TO oaa tha Tnaat laid in any way whatsoever according to tholr
atoaolute discretion aa thoutft they wore abeolute beoafielal ownera
eid notwithstanding any ruloof law at equity or otherwise to tha
contrary and without prejudloe to the generality of the foregoing
provision ahall have Power to acquire aay property whatsoever even
thou£> such property shall yield no laooaa and even though such
property bo a wasting asset and avea thou t aocb property ahall be
of benefit to one or sore of tha Panaflelarieo hereof only to the
exclusion of the othar Beneflalerlos hexeofi the provlsleas of
this s«b-clause shall apply to say lavas osnt or disposal of or
any ether dealing with any of the Trust Fund aad any restriction or
limitation t Rinsed by any rule of law or equity or-otherwise ahall
accordingly bo inapplicable hereto.
(c) *» borrow aoney or give or enter Into guarantaeo oo the security of
the Trust Pood with power to chsrge any part of tha capital or
laooaa (including any future Inoaasl of tha Trust n od with the
sopayasat of say aoneys .so borrowed or guaranteed aad to pay or
apply the aoney ao raised in say Master la whldi aoney forming part
of the capital of the Trust Fund aay be paid or applied and ao thattha fruataoa shall have power to enter into any joint borrowing
arrangoasats with any parson and whether or not Involving' joint
or several liability and no purchaser laadar or ether person
paying or advancing aoney en a sale aortgage dkarge or other
transaction purporting to be aads by the Trastsos under or for aay
of tha purposes of this Settloaaat shall be concerned to see that
the aoney is wanted or that ao aero than la wanted Is raised or
otherwise as to the propriety of tha transaction or the application
of tha aoney.
(d) Further and without any prejudice to the generality of tba foregoing
provisions the Trustees shall be o g tm l f authorised hereby to
delegate any or oil of their duties or Powers undar this •ottlinintto any person whatsoever without liability for loss and if such
person shall bo acting la the coarse of hla trade, profession or
vocation ha ahall bo ontltlad to proper reauneratlen out of tha
Trust Fund.
(e) Any Trustee heraof who is a corporation shall bo entitled to
remuneration for acting aa a Trustee hereof in accordance with its
scale of charges as published froa tiaa to tiaa if any or la tha
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abaence of audi pdbliahed acala aa aforaaald ahall ha an it ad to
raaaonahla remuneration tor so acting and any Trustee who Is a
profaaaianal person of any description shall ba antltlad to proper
rsauneratlcn for work undertaken in his capacity aa a profaaaianal
parson oat of tha Trust rund (either capital or Inooaa) and any
Trustee 'hereof ahall ba antltlad to proper remuneration for acting
la tha capacity of Trustee hereof out of the Trust find (either
wpital or lacoaa).
(f) 9m Tina Usee shall have Power to pmy aay dutlee and taxes for which
they nay be c o b s liable In any part of the world notwithstanding that
aucta liability aa aforesaid M y not be enforceable throu i tba
Courta of the Island of (hwraaay or of audi other territory as mmj
have becoma tha fopm fear tha adalnlatratlon hereof by virtue of
tha eaarciaa by the gaeuataaa of their towers in that regard uadar
cI s b s o 3 hereof.
(g) the Truateea shall not ba liable in respect of aay purported ewercise
of any dntiss or towers oadar this Crust save only that If they have
noted fraudulently they ahall not ba entitled to tha protection
conferred hereby.
(h) ihe Sruataea aay an ar into1 any venture which they believe tobe of
benefit to tha Trust notwithstanding that ohs' or aore of tba Truataaa
(or if a corporation aay of tha offloara of tba
corporation) are
personally interested In such vantun.
(1) Tbe Trustees hereof aay invest any or all of tha Trust Pund la 'any
sharas, stocks, bonds, debentures of a Ceqpany la which they are
interested directly, or Indirectly, or whidi la interested la thaa
either directly or Indirectly, said tba True ees aay Invest any or
all of tha Ttuat Pund in aay Halt or Investment Trust or Pwd la
which they are lntaraated or which la managed by thaa notwithstanding
say rul* of law or equity or othexwlae to the coatrary.
The Truateee are ewraaaly authorieed hereby to f an any entity or
aasodatlcn incorporated or unincorporated in any part of tba world for
tha parpoaa of Investmsnt or far tha purpoaa of carrying-en trade with
the m a t property and la tba u a i d N o t tha foregoing power theTrustses shall act la auch a manner aa thay ahall sea fit In their
absolute discrstlon.
Motwlthatandlag aay role of law or equity or otharwlae to tha contrary
the Truetses ahall not ba bound to concern theaselves in any way
lAatsoavar la tba management or conduct of tha investment or buslaass of
any such entity or aasodatlcn as aforaaald unleaa aad until tha Truataaa
ahall have notlca of any act of diahonaaty or niafaaaance on tba part of
any of tha managers or parsons la control of any audi entity or
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r*
12.
13.
aasodatlon aa aforesaid.
Ths Trustaoa ahall harm Power at their abaolute discretion to land tha
whole or any part "of the Truat Fund to any persona whether a Beneficiary
or not vsider the Sroat hereby declared with or without security and iqxn
audi tarns as to repayment and lntaraat or intarast free an tha TTustsos
nay in tholr discretion think fit but ao that no auch loan shall be
on tome that repsynsat ahall be poatponod beyond tha Trust Period.
The Trustees Shall have the following additional Powers, namely t-
(1)
(2 )
14.
To sell lease and exchange any property which nay at an
constitute tha wbole or any part of the Trust Fund either at public
auction or by private treaty for such conaideraticn and an such
. terns as tha Truataea daaa adviaable and whether fear the purposesof reinvestment distribution or division and to make such oontxacts
and enter into "such iwrtartaHnga relating to the Truat tad or to
any of it as this True ees in their moon rolled dlacretion ccaisldar
advantagaoos to the Trust whether or net such leases contracts or
on art kin s extend or aay eatand beyond tha Trust Period.
With respect to any property constituting the whole or part of tha
Trust Fund to osorciae all Powers which an Individual owner aijht
aaerotae without being restricted in aay way by tha offlee of
Trustee Including (without hereby Hotting the foregoing'wide Power
or any general Power' herein contained) i-
<a) voting upon or la respect of any aharae so urttrios bond
notss or other evidence of intarast la or dbligatione ofany corporation truat association or pen earn whether car not
affecting the security or the apparent aecudty of the Truat
property or the purthaae or leaae of the assets 'of any such
corporation truat association or oonoasai
(b) giving proxies or Powers of Attorney with or without Powers
of substitution for votlag or eotlag on behalf of tha
Trustaaa as the-ownera of any such property.
Mheie.tho Crust Fund includes any chattels the Trustees shall have power
to lend let or hire any of such chattels to aay persca (whether or not
being a person interestsd hereunder) either gratuitously or for sa«h
consideration and qpen. auch terms aad for such periods es-the-Trustees
aay in thsir 'discretion think fit and Where eny chattels era lentl 1st
or hired to any other person or any other peraon is lawfully permitted
to use and enjoy any chattsls- in specie the Troatsss shall not bo
responsible for say loaa incurred through any damage to the ansa eauaed
by or through any aala car conversion thereof Bade by such person or
otherwise incurred through any neglect or default of each person,
(a) The Trustees ahall exercisa the Powers and discretions vested in
theai as they ahall think aoat obedient for the benefit of all or
s&
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any of the para n* actually or prospectively interested under thisSettlement and nay exercise (or refrain froa exercising) any Power
or dlacration for tha benefit of any one or sore of then without
being obliged to oonaldsr the Internet of tha others or other.
(b) Sriiject to tha previous sob-clause every discretion vested in tha
Truataaa shall ba absolute aid mcontrolled and every Power veeted
in than ahall be exercisable at their absolute and 'im on rolled
discretion and the Truataaa ahall have the ssaa diacratian In
deciding whether or not to exercise aay audi Power.
(c) MO Trustee hereof or director or other officer of aay corporation
which la a Trustee hereof ahall ba liable to account or ny
remuneration or other profit received by his la consequence of his
acting aa or being appointed to be a director or other officer or
servent of say oeapany t m n thou0t his appointmant was procured by
en e ercies by him or by. the True ees of voting rl0ita attached to
aacurltlca in the Truet Pund 6r Ipy an abstention froa asercl aing
auah voting rights.
M . The Truataaa ahall have Power at aay tiaa or tlaae by Xaatxuaant or
Instruments in'writing or Deed or'Deeds aa appllMbla aocordlag to tba
prcper law of this Sett ament revocable daring tba Tkuat Period or
irrevocable to give op or restrict aay Power hereby or by law conferred
en thaa notwithstanding tha fiduciary nature of any such Power.
17. Despite anything contained alaewhatra In thia Settlement no discretion or
Power conferred by this Instrument la writing or Bead aa asy baapplicable according to tbe proper law of this iettlsasnt on tha Trustees
or on aay person shall ba eaerolaabla after tha ejqplraticn of tba trust
Period, sor ahall auch discretion or Power aa aforaaald ba aaarcissd la
any waye aa to infringe aay rale' agalaat pexpetoltiee.
It. (a) Tha Power to appoint aaw or additional Truateee hereof shall saat
hereof Tasatnlnp tha aforaaald Power shall seat la the Parscaal
Bapxaeentatlvaa of tba last True tee hereof.
(b) if amy Trustee hereof shall at aay timadeslre bo withdraw aad be
dia charged froa the Trusts hereof the aald Truatae asy do so by
notice in writing to tha remaining Truataaa or If the only Ttuataa
hereof at the aaterial tiaa is the Truataa who is desirous ofwithdrawing tha aald Trustee ahall appoint caa or BOOT additional
Truataaa la accordance with tba previa one of paragraph (a) of thia
clauae aad ahall than give notioa to the aald additional Trustee
or Truataaa as aforaaald.
(c) hay Trustss hereof who desires to withdraw In aooordaaoa with tba
provisions of paragraph (b) of thia clause shall prior to his
discharge frca the Trust hereof do or cause to ba doaa all such acts
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as are neoaseary for tha proper vesting of tha Truat Fund
la fi* ontinuing or new or additional Truataaa m the eaao aay bo.
(d) M l auch acta aad daodo aa aforaaald ahall bo dona at tha o^oaaa
of tha laooaa oar capital of tha Truat Pond W W 1 D BUT aa outgoing
Trustee who la llabla aa a Truataa hereof or who aay at tha death of
any person be llabla ao a former Trustap hereof, for any taxoa which
•ay be lapceed by the Proper Law or alsswhsre ahall not bo booad to
trana ar the Trust tad unless reasonable security la provided far
indemnifying such outgoing Trustee agalnat such liability.
(0) Oa every change la the Trusteeship a mamorandna Shall be endorsed
«n or permanently annexed to this SettlMamt stating the naaea of
the Tfeustsos for tha Urns being aad shall be signed by the persons
so nanad and any person dealing with the tettleaent shall beentitled to rely upon auch aeaausudHai (ok the lateet of audi
memoranda if MM ttaaa one) as sufficient evldsnoe that the Trustees
aeaed therein a m the duly constituted True ees for tha tiaa being
hereof.
(f) Xa tha ovoat of ao peraaa entitled under tha foregoing paragraphs of
this clause appointing a new Trustee hereof within oae nooth of the
last Trustee hereof peas lag to be a Trustee the Power to appoint one
or aore new Truataea of the Settlement shall veat in the aoet senior
practising Advocate for the tiaa being of the guernsey Bar.
19. Zf a Truataa retiree from the Trust hereof or bocnaaa by reason of
residence or place of lncorporeticn incapable of acting no a True ee
hereof such Ti.ua too shall be raleaaad lpeo facto fsoa all claiaert ea an rt s aotiena proceediaga and accounts of aay kind on tha part of say
parson (whether in oatatonoa. or not) actually or prospectively interested
under the Sattleaaat for or in respect of the Trust Fund or the lnauaa of
tha Trust Fund or the Tiruets of this Settlement or an sot or thing done
or caittad la esacotloa or purported execution of such Trusts other than
aad except only actions i-
(1) arising frca aay fraud or fraudulent breach of Trust la which such
Trustee (or la the caaa of a corporate Trustee any of its officers)
waa a party or of which audi Trustee had knowledge i
(2) to recover frca ouch Trustee Trust property or the proceeds of Trust
property in the possession of such Trustee (or in the caaa of a
corporate Tsuatee any oflta of leers) and converted to his use.ao. In the execution of the Trusts aad Powers hereof no Trustee shall be
liable for any loaa to tha Truat Fund arising la consequence of the
failure depreciation or loss of any investment made la good faith or by
reason of aay act or calssicn mada in good faith or of any other matter
or thing exoept wilful and Individual fraud and "wrongdoing on tha part of
the Trustee whoa it is sought to be aada llabla.
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31. Oh* Trustses ahall net except undar compulsion of law of tha
Island of Guernaay or of tha Proper Law aa defined In olsusa
2 hereof, divulge oc discloss directly or lndlzsctly to aqr
tax or fiscal authority eqy information relating to tha
Trust pund or tha Trust Bead or to tha aaaata or tha .
Beneficiaries thsrsof exempt that relating to this el ues
sad to the third schedule.
22. Thia Settlement shall hs know as Ths Oaraaaa Trust.
23. She nana of this Settlement amt be chsaged by the Trustees at.
their dlaeretlca to audt other aass or naasa aa they oanaldar
fit. 1 aoaorandoa recording each sad every change of aaaeshall be affixed to tha original trust deed.
24. This Settlement shall ba irrevocable.
Jersey (tad for Blind Children
Jersey Oxfasi a w gJersey midlife Pxsaervatioa Trust
"S3BJSSB5BS.
1. egr arses who Is or is
traatad aa resident in the
lslsad.ef Ouemeey for tha
purposes of tsvatloa la
that Island.
•SAL of-
was hereunto affixed In
tha presence of i-
C 5 - *«*re*
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Rage 1.
THE GARENNE TRUST
BALANCE SHEET AS AT 31ST DECEMBER 1985
NOTE
INVESTMENTS AT COST
(Market Value £68,482) 1 82,631
CURRENT ASSETS
) Cash at Bank 79,348
CURRENT LIABILITIES
Creditors 7,711
For SOVEREIGN TRUSTEES LIMITED, TRUSTEES
Direc
Date: ^ L
71,604
£154,235
Trust Capital Account - See Page 2 £154,235
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Appendix XV (152) (2) (a)
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S O L I C I T O R S
30 Herbert Street
Dublin 2 Ireland
TEL + 353 1619 9000
FAX + 353 1 619 9010
DX 2 Dublin
e mail [email protected]
ww w www.mop.ie
MATHESON
ORMSBY
P r e n t i c e
His Honour Judge Sean O 'Leary, Noreen Mackey BLMr Paul Rowan, Michael Cusli SCOffice of the Inspectors Appointed by Order of the High Courtto Ansbacher (Cayman) Limited3rd Floor, Trident HouseBlackrockCo DublinPRIVATE & CONFIDENTIAL
TO BE OPENED BY ADDRESSEES ONLY
mW
Our Ref
TOG/MB
Your Ref
C/M04/NSPM
14 December 2001
Dear Sirs / Madam
OUR CLIENT - DENIS MCCARTHY
We refer to your letter dated 20 Novem ber 2001 to our client care of ourselves.
Regarding your preliminary conclusions, our client is not in a position to adduce evidence affectingone way or another the preliminary conclusion that our client was a client of Ansbacher. We assumethat, in this regard, you have draw n this inference from ledger cards dated 2 0 Nove mb er 1981 and 12
January 1983 in relation to account at Guinness & Mahon entitled GMCT re College B/G accountnumber 32713/03/68 and account in the name of GM CT / College Sundry Sub Co account number63127/02 /16 respectively and other information in your possession to which neither w e nor our clientare privy.
Our client is quite categorical, however, that, if he was a client of Ansbacher, he was at all relevanttimes totally un aware of this fact. He has been absolutely consistent in this regard both in hisinstructions to ourselves, his statement dated 8 June 2000 submitted to you and in his evidence in thecourse of his examination under oath by you on 15 June 2000. His evidence in this regard is as far aswe are aware, the only evidence in your possession which touches upon this issue.
It is of the utmost importance to o ur client that both you and all persons reading y our final report are
not given the impression that our client was aware that he was a client of Ansbacher. Our client'sview is that the words 46 even though he may have believed his trust arrangements were in the Channel
Islands" at best would not convey to the reader the fact that our client was un awa re that he was a clientof Ansbacher and, at worst, could give the impression that you had some doubt, and had reasonablegrounds for having such doubt, as to whether he believed that his trust arrangem ents were in theChannel Islands. For these reasons, we would submit on our client's behalf that your preliminaryconclusions in relation to our client should be amended to read as follows:-
D U B L I N L O N D O N P A L O A L T O
PARTNERS
SirAnihony O'Reilly
(Chairman)Garrett GillMichael IrvineArthur MoranGiaham RichardsAlan GrahamMichael TyrrellFrank NowlanStuari Margetson
Donal Roche
William PrenticeRoderic HnsorJ a m c» HickeyPauline O'DonnvanStanley WatsonRobert HeronLiam QuirkeAndrew Muckian
Patrick Sweet man
Brian BuggyDon McAleeseSimon McAleesePaul Ok-:fieldAndrew DoyleJames ScanlonMichael JacksonChris QuinnTim Scanlon
Deirdre Morris
Helen KellySharon DalyRuih HuuterTonv O'GradyParaie MadiganMichael O'ConnorEdward MillerEmer Hunt
AS S OCI AT E S
Deirdre Dunne
Paula MulloolyN'eil KecnauTony WilliamsPatrick MolloyAnne-Marie BohanKenneth EganTara DoylePatrick SpicerCatherine Galvin 1
Nicola Rooney
Lisa Sexton
1
Frank O'Neill "Greg Lockhart 1
Turlough GalvinTanya HollySinead DuffyGeorge BradySusan O'ReillyCatherine Young
Lisa Broderick
Vanessa ByrneMark VarianTara MacMahonBarry LynchRobert O'SheaPaul FarrellJacqui Cross
CONS UL T ANT S
Anthony Walsh 1
John Ryan1
John Gulliver 1
Bernard Doherty 1
Hilary Prentice
Lorraine Com pton
Kevin McGilligan
LONDO N Third Floor Pinn acle House 23-2 6 St. DunstunN Hill London F.C3 SI IN England m . + 44 20 7618 6750 FAX +4 4 20 7618 6790,