A man who invested €1.1 million in property investments promoted by Wexford accountant Alan Hynes ended up bankrupt with net debts of approximately €17 million, a disciplinary tribunal heard today.
Ambrose O'Brien of Kilcloon, Co Meath, said he signed powers of attorney giving Mr Hynes the right to take out bank loans on his behalf as part of the investments he made, the tribunal heard. He said he had also, at one stage, signed 20 to 30 documents in a car park in Brittas, Co Wicklow.
Mr O'Brien said he had been "tied in" on a joint and several basis with bank loans associated with a site on Cunningham Road, Dalkey, but hadn't realised this until notices came in for him from Zurich Bank.
Alan Cormack BL, for Mr Hynes, said his client “absolutely rejected” any suggestion that Mr O’Brien had been tied into the loans using powers of attorney signed by Mr O’Brien.
Mr O'Brien was giving evidence on day seven of the resumed sittings of a disciplinary tribunal. The Chartered Accountants Regulatory Board (Carp) is investigating a number of complaints against the former director of Tuskar Asset Management (in liquidation), a property investment business into which investors put millions of euro. It is alleged that Mr Hynes may be liable to disciplinary action for the breaching of the code of ethics of Chartered Accountants Ireland.
Mr O’Brien said that at no stage was it ever suggested to him by Mr Hynes that he take independent legal, financial or investment advice.
Asked by Brian Farren BL, for Carb, what the consequences were for him of getting involved with Mr Hynes’ investment schemes, Mr O’Brien said he had been made a bankrupt on November 5th, 2012, with debts of more than euro 17 million.
Asked about his knowledge in relation to the financing of the various investment schemes in put money into, Mr O’Brien said he wasn’t too sure of them at the time.
“There were powers of attorney going around,” he said. They would be “emailed to me, or faxed to me, or sent to me” and it was always the case that they had to be signed and sent back within a day or two. “There was no explanation as to the seriousness of it, that you were signing your life away.”
Mr O'Brien said he first met Mr Hynes in the Shelbourne Hotel, Dublin, along with a friend, in mid 2004. He had €800,000 after selling a house in Rathmines, Dublin, and wanted to invest it.
A week later he was contacted by Mr Hynes about an apartment development in Castle Park, Dalkey, Co Dublin. “I thought it sounded good.” He invested €300,000 in return for a one-third share of the development. Ms Hynes wife, Noreen, was another investor.
In early 2004, he invested a further €100,000 in a proposed development in Maynooth, Co Kildare. He said he saw a brochure about the Dalkey investment but little else by way of documentation.
Asked to describe his relationship with Mr Hynes at this stage, Mr O’Brien said: “I trusted him. He seemed a pleasant man to talk to.”
In late 2004 he had to lodge €400,000 with the Bank of Scotland Ireland as he was not considered a high net worth individual. He got this money back in January 2007, when the Dalkey project had reached a late stage.
In mid-2006 he was approached by Mr Hynes, who had become his accountant, about an apartment project, the Laurels, in Dundrum, Dublin. He borrowed €200,000 from a friend, Brian Horgan, to invest in this. His friend invested €100,000.
He said he saw a brochure but little else by way of documentation. “It was a great site in the middle of Dundrum. You felt you couldn’t go wrong with it.”
In 2006 Mr Hynes told Mr O’Brien that the Maynooth site was being sold at no profit, and the money being put into a new venture, Tuskar Asset Management (TAM), which was to develop a site called the Iceland site in Dun Laoghaire. “I just got an email saying all this was happening.”
In March 2007, Mr O'Brien invested further funds into TAM, having gone to a well-attended meeting in the Stillorgan Park Hotel, Dublin. "Colm Sugrue was the main man there that day, promoting it. There was a good crowd."
Mr O’Brien put €400,000 into the new venture, in return for shares, and subsequently a further €100,000. He had at this stage had his €400,000 released by Bank of Scotland Ireland, and had repaid the money he’d borrowed from Mr Horgan. He had also taken out € 300,000 by remortgaging a house in Rathmines on the advice of Mr Hynes, he said.
He said he invested money in a development project on Cunningham Road on the basis of taking equity out of the Dalkey project, as suggested by Mr Hynes. “I said he was the man. He knows what he is doing.”
He said Mr Hynes suggested he take €1.1 million in equity out of the Castle Park project, in invest in the Cunningham Road development. “That later turned out to be €2.6 million.” Mr O’Brien said he hadn’t seen that figure until he was signing related documentation. “But I decided fair enough.”
The tribunal continues.
