THE board of a dormant non-trading Aer Lingus subsidiary company did not authorise its use in a property deal in 1987, a jury in a fraud trial has been told at Dublin Circuit Criminal Court.
Mr Brian Wheatley said he was finance and planning manager for the Aer Lingus ancilliary activities division. His job was to monitor and control the performance of Aer Lingus's non-core business activities and he was a member of the board of Cara Marketing Ltd in April 1987.
Cara Marketing was totally dormant and its accounts maintained by the Aer Lingus finance department. Board meetings were only held on an ad-hoc basis.
Mr Wheatley told prosecuting counsel Mr George Birmingham BL, that the use of Cara Marketing in a lease-purchase deal for an apartment block called San Francisco Park in Lanzarotte by Aer Lingus Holidays never came before the board. It would not have been, and could not have been, authorised.
He was giving evidence on the 18th day of the trial at Dublin Circuit Criminal Court, of former ALH executive Mr Peter Keely, of Carrig Avenue, Dun Laoghaire, and solicitor Mr Desmond P. Flynn, of Tritonville Avenue, Sandymount, who have pleaded not guilty to conspiracy to defraud.
Both men deny they conspired together and with Mr Peter Noone, former financial controller of the company, on dates from March 1987 to November 1988 to defraud Aer Lingus Holidays by misappropriating funds to purchase part of the Los Hibiscos apartment complex for their own use and benefit.
Mr Wheatley said he recognised Mr Noone's signature on a contract between Cara Marketing and Capital Leasing but Mr Noone had no authority to sign this document. He would have told Mr Noone previously about Capital Leasing and other companies being suitable for lease-purchase transactions.
Mr Wheatley agreed with Mr Peter Cush SC (for Mr Keely) that an Aer Lingus letter to Captial Leasing, signed by then assistant chief executive - finance, Mr Louis Sleator, indicated the airline was aware of Cara Marketing being used in the San Francisco deal. Witness did not know who else in Aer Lingus was aware of it.
Mr Timothy Shattock, chief executive of Park Aviation, said he was employed by Aer Lingus Holidays in February 1989 as property acquisitions and development manager and remained with the company to January 1990.
He told prosecuting counsel Mr Erwan Mill Arden SC (with Mr Kenneth Mills SC and Mr Birmingham) he travelled to Lanzarotte with Mr Noone to view the ALH properties called San Francisco, Las Vegas and La Penita, and to Malaga to view the Ecudor apartment block.
He remained in Malaga for about two-and-a-half months overseeing the refurbishment. Mr Shattock said he made a short visit back to Dublin and then went to Lanzarotte where he was involved in refurbishing La Penita and looking after the other ALH properties, San Francisco and Las Vegas. He became "aware" of the Los Hibiscos complex and met and spoke with Mr Maurice Harskins regularly. He had no knowledge of Aer Lingus Holidays' ownership of Los Hibiscos or of any Aer Lingus associated company owning it, and would have expected to know of such matters. He also became "aware" of a company called Delmont Investments Ltd about October-November 1989.
Mr Shattock said he knew of an ALH subsidiary called Penamar Compania de Administracion S.A., which had been set-up in Spain as a vehicle to look after ALH interests there and to employ people. Its directors were Mr Malachi Faughnan, Mr Noone, a Spanish lawyer called Mr Jose de la Costa Rosa, and Mr Maurice Harskins.
This company had an account with Banco Santander. He was near the Lanzarotte branch in March 1989 with Mr Noone who spent about an hour in it. Witness did not enter the bank itself.
Mr Shattock told Mr Cush (with Mr Adrian Hardiman SC and Mr Gerry O'Brien BL, for Mr Keely) he was "extremely poorly briefed from the start" by Aer Lingus Holidays. His letter of appointment referred to an "aggressive development plan" but he never saw anything like this.
He remembered a firm called Compania Construciones Olea which was involved in the Malaga refurbishment but it was "news" to him that Delmont Investments paid at least one of the bills for this work. He was told by Mr Noone that "money didn't grow on trees" when he rang Dublin once because Olea was looking for money. "The flow of information in ALH was very poor. They were a tremendous disappointment," said Mr Shattock.
He agreed "most definitely" with Mr Cush that ALH did not refurbish apartments it did not own but he was not aware ALH was involved in refurbishing Los Hibiscos. He was also unaware that the ALH representative in Lanzarotte, Ms Celine McIvor, knew ALH was involved in the refurbishing.
When he first went to Lanzarotte he was shown the properties ALH owned. "It is rather startling I was not made aware of any ALH proprietorial interest in Los Hibiscos," Mr Shattock said.
The trial continues before Judge Kieran O'Connor.
