A FINANCIAL expert was warned of “dire consequences” for himself by an official of Anglo Irish Bank if he provided evidence for a businessman in proceedings alleging fraudulent misrepresentation and concealment by Anglo and another company relating to an investment fund for two hotels in New York, it has been claimed at the Commercial Court.
Anglo has denied the claims of intimidation of Tom Barry, a former head of corporate banking with Allied Irish Banks, made in proceedings brought against it by businessman Gerard McCaughey.
It is alleged an Anglo official told Mr Barry a substantial judgment obtained by the bank against him over property dealings he had in London was currently in the “bottom drawer” but, if Mr Barry submitted an expert witness statement for Mr McCaughey, it was likely the judgment would come out and Mr Barry’s name “would be appearing in the papers tomorrow”.
At the Commercial Court Mr Justice Peter Kelly described the claims as very serious. The judge said the alleged conduct was also arguably a contempt of court.
The judge has adjourned the proceedings to January 11th to allow Anglo and a named official respond to the matter.
Mr McCaughey, with addresses at Sandymount, Dublin and Manhattan Beach, California, is among 24 investors suing Anglo in relation to the hotels investment fund. His action is being treated as a test or “pathfinder” case.
In an affidavit, Thomas Norris, solicitor for Mr McCaughey, said the application for an extension arose because Mr Barry said late last month he would not submit the witness statement.
Mr Norris said Mr Barry was selected earlier this year as an expert and prepared an initial draft report at the end of March 2010.
However, on November 26th, Mr Barry said he was not willing to provide a witness statement.
Mr Barry apologised profusely but said he felt he had no choice, Mr Norris said. Mr Barry had said Anglo had obtained a substantial judgment against him over property dealings in London and, having made inquiries informally with people he knew in Anglo, was told submitting a witness statement and attending court would have “dire consequences” for him.
Mr Barry believed if he gave evidence there would be severe financial impact upon him and Anglo would proceed to enforce its judgment and also publicly seek to embarrass him, Mr Norris said. Mr Barry was finding the matter extremely difficult and stressful and Mr McCaughey had to find another expert and was also concerned Anglo may seek to influence other witnesses.
Anglo, in an affidavit by a senior manager, Con Tiernan, said the making of such serious allegations was wholly inappropriate and improper and no steps were set out to substantiate them. To the best of his knowledge no Anglo employee had engaged in such intimidation.
Mr Tiernan said Mr Barry contacted Donal O’Connor of Anglo last March to say he was considering acting as an expert witness for Mr McCaughey. A lending executive who had dealt with Mr Barry later informed him Anglo was continuing to pursue its action against him over loans held by him in the UK. It was made clear the acceptance by Mr Barry of any role in the McCaughey proceedings would have no bearing on the position being adopted by the bank in the proceedings against Mr Barry, Mr Tiernan said.
Mr McCaughey’s action is against Anglo and Mainland Ventures Corporation (MVC), Delaware-based and wholly owned by Anglo, over investments in the Anglo Irish New York Hotel Fund, a private equity investment in which 50 high net worth Irish based individuals invested an average $1 million (€763,000) each in 2006.
