A well-known businessman was asked but refused to front an operation under which he would be inserted into the Master Meat Packers group of companies as a representative of Mr Larry Goodman, the High Court heard yesterday.

Mr Alex Spain wrote to Mr Sean Mooney of the accountancy firm KPMG, saying: "I greatly regret that I can only conclude that proposal is not on" and set out five reasons for that, including that he would be "working at all times from a false premise", would have a "lack of moral authority" and would be a party to "material deception".

"It appears to me L has to find a way to come upfront and deal with the issue head on," the memo also stated. The reference to `L' was a reference to Mr Goodman, Mr James Salafia SC, for Mr Pascal Phelan, said.

Counsel was continuing his opening of an action by Mr Phelan, in which he alleges there was a conspiracy in April 1987 between his former partner, Jordanian businessman Mr Zakaria El Taher, Mr Goodman and others to secure the removal from the meat trade of Master Meat Packers, founded by Mr Phelan. The court has heard Mr Goodman accepts, for the purpose of the proceedings, that he owned and controlled the group since 1987. Both he and Mr Taher deny allegations of wrongdoing.

Yesterday, Mr Salafia said Mr Goodman was activated by motives of spite against Mr Phelan, because Mr Phelan had set up a business in opposition to Mr Goodman when the latter was in a dominant position in the beef industry.

In March 1988, Mr Phelan was asked by Mr Taher to let a financial person into the business, Mr David Coyle. From then on, there was a direct conduit from Mr Coyle to Mr Goodman, counsel said.

He said Mr Goodman had in July 1988 given indemnities to Mr Zakaria Taher and his son Nasser against any charges they might incur as a result of claims by Mr Phelan and Master Meat Packers. This occurred at a time when Mr Phelan believed he still had Mr Taher as his partner. In July 1988, Mr Phelan moved to invoke the deadlock provisions of their joint venture agreement. Mr Phelan offered to buy Mr Taher's share in the business for £2.5 million.

Counsel said the offer of July 15th 1988 from Mr Phelan led to a counter offer from Master Meats Anstalt - the Tahers' company - to buy Mr Phelan's shareholding for £2.7 million. Mr Salafia said Mr Laurence Crowley of Stokes Kennedy Crowley was brought in 1988 to try and break the deadlock. Mr Crowley informed the then Minister for Industry and Commerce, Mr Albert Reynolds, of fundamental differences between the shareholders of Master Meats which were threatening the survival of the businesses and referred to the offers of both sides to purchase each other's shareholdings.

Mr Salafia said Mr Goodman's involvement in Master Meat Packers was disguised because a sale to him would not be permitted under the mergers and monopolies legislation. He was saying the Minister should have been told of Mr Goodman's involvement. Counsel said the Minister was told Master Meats Anstalt would not dispose of the companies to persons unacceptable to the Minister and these would be maintained as going concerns. This undertaking was ultimately breached because Mr Goodman ended up with the "jewel in the crown" and persons "not unknown to Mr Goodman" became the owners of the Master Meat Packers plants.

The hearing resumes on Tuesday.