SOLICITOR JOHN Caldwell, who was investigated by the Mahon tribunal into planning corruption, was a “silent partner” in Custom House Capital and his stake was bought out in 2007 using €2 million of cash from client accounts, Central Bank inspectors found.
The inspectors discovered that this cash was transferred from CHC client accounts to Mr Caldwell’s account in Barclays Bank on the Isle of Man through a Fortis Bank account in Luxembourg.
The cash was transferred through 11 transactions between December 2007 and December 2009 to buy out Mr Caldwell’s 25 per cent stake. The Luxembourg account was held jointly by CHC chief executive Harry Cassidy and board member John Mulholland.
The inspectors found details of the transfers on the computer hard drive of CHC head of finance Paul Lavery. They were not on the firm’s shared computer server.
The Mahon tribunal found in 2004 that Isle of Man resident Mr Caldwell was a beneficial owner of lands at Carrickmines, Dublin, which were rezoned in controversial circumstances in the 1990s.
The tribunal investigated claims that bribes were paid for council rezoning votes and is expected to publish a report on this and other matters later this year.
The Central Bank was unaware of Mr Caldwell’s role in CHC until it received the inspectors’ report this week. The inspectors found a discrepancy between information provided by CHC to the Central Bank on who owned the firm and information given to them by Mr Cassidy and Mr Mulholland.
Mr Cassidy told the inspectors last month that Mr Caldwell’s shares in CHC were held in trust on his behalf by Mr Mulholland.
He said that when it emerged that Mr Mulholland had transferred a further 5 per cent of the company to Mr Caldwell, bringing his interest to 25 per cent, it “caused a significant divide in his relationship with Mr Mulholland”.
“John Caldwell was a, inverted commas, silent partner in CHC for a number of years since when we set it up,” Mr Cassidy said.
He said the firm had jointly agreed with Mr Caldwell to buy him out in 2007 as the company was “significantly valuable” and they wanted to control it.
“We weren’t comfortable; I particularly wasn’t comfortable with him because of the problems that he was having and what impact that might have on our reputation if that became evident that he was involved,” said Mr Cassidy.
He said Mr Mulholland was a friend of Mr Caldwell’s and was involved in some of his companies.
“He is not a friend of mine,” said Mr Cassidy of Mr Caldwell. “He is a contact of John’s. I never knew him before I set up with CHC – knew of him, didn’t trust him.”
During talks on a deal over his shareholding, Mr Cassidy said he had “a very significant row” with Mr Caldwell over what they each believed the firm was worth. The row was such that “he got up and walked out of the meeting and refused to negotiate with me any further”.
Asked whether CHC paid tax on the transfers, Mr Cassidy said: “I presume they came from fees that would have been covered in our fee income. I would have to check.”
