A businessman has filed a complaint to Revenue saying that a hotel partnership backed by State agency the National Asset Management Agency (Nama) used his personal tax number without his “knowledge or consent” after he went bankrupt in Britain.
John Fraher was formerly a one-third partner in the Poppyfield Consortium, developer of the Clonmel Park Hotel, with co-partners Richard Pratt and Jack Ronan. Mr Fraher was adjudicated bankrupt in the UK in December 2013 with debts of some €10.5 million, at which point his assets transferred to a United Kingdom official receiver.
His largest creditor was Nama which was established at the height of the financial crisis to settle soured property loans at domestic banks. After the bankruptcy Nama sought the appointment of an Irish joint trustee in bankruptcy — George Maloney, a consultant with accountants RSM Ireland.
The loans underpinning the Clonmel hotel were in Nama from the time they transferred there in 2010 until the hotel was sold in January 2015.
One month after the sale National Asset Loan Management, a division of Nama, paid €660,000 to the Collector-General in respect of Mr Fraher’s share of the capital gain on the transaction. The tax payment was set out in a letter from the Nama division in February 2015.
However, Mr Fraher said in his Revenue complaint that the Poppyfield Consortium should have been dissolved for general law purposes once he was adjudicated bankrupt 13 months before the sale.
He cited section 33 of the Partnership Act of 1890, which says “every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner”. Although that clause is subject to any agreement between partners, Mr Fraher said there was no such agreement.
The complaint said “various taxation returns were filed with the Revenue Commissioners after the date of bankruptcy” without Mr Fraher being told. It went to cite partnership tax returns for the six years between 2013 and 2018 and VAT returns for the period from 2013 until 2019.
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The complaint said Mr Fraher’s tax reference number “should not have been used” from December 13th, 2013, because of his bankruptcy that day. It went on to say the VAT number “should not have been used for any activity” after what he described as the dissolution date of the partnership.
Mr Fraher said: “I am questioning the integrity of the tax system in relation to the unauthorised use my tax number in relation to dissolved partnership and the consequences of Nama’s involvement in same. I am looking for accountability and I am looking for answers.”
Asked about the complaint, Nama referred to a reply from a parliamentary question in May from then minister for finance Michael McGrath to Independent TD Mattie McGrath.
“Having raised these questions with Nama, I am informed by Nama that it is satisfied it has at all times acted appropriately and in accordance with its statutory remit and obligations in respect of the asset in question,” said Mr McGrath.
The minister went on to say he was legally precluded from disclosing confidential debtor information, including specific details relating to debtors, secured assets or related transactions
Mattie McGrath had asked the minister to provide “an explanation” on certain transactions and explain the arrangement that Nama and National Asset Loan Management had with a company.
Asked about Mr Fraher’s complaint, the Revenue said it was legally precluded from comment on the tax affairs of any business, individual or entity, or on interactions with them.
“As such, Revenue is unable to comment on the specific case you have referred to in your email,” said the Revenue.
“However, please be advised that an individual tax registration number is not automatically rendered void or cancelled in the event of bankruptcy (either in the State or another jurisdiction).”
Mr Pratt when contacted by phone declined to comment on the Revenue complaint for this piece. Mr Ronan did not return a phone message and did not reply to a text message seeking comment for this on the complaint. Mr Maloney was contacted for comment.
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