Dublin publican Frank Gleeson is being investigated for apparent "profligate and unauthorised personal expenditure" as part of his role as chief executive of the Mercantile Group, the Commercial Court has been told.
Personal expenditure of €123,000 on Mr Gleeson’s credit card appeared to involve “holidays to city destinations in the UK, Europe and the United States” while there was also an undisclosed practice of taking cash from tills, and charging food and drink bills to the group.
The last practice involved expenditure of €12,000 in November and December 2016, the court was told.
The claim was made by shareholder Mark O’Meara in an affidavit in a case where Mr Gleeson is claiming shareholder oppression against the other shareholders in the Mercantile Group, just one year after the entity was formed by way of merger.
Mr Gleeson merged his businesses with those of the Capital Bars Group, with investment by US investors Maurice Regan and Michael Breslin, to form a group that includes the Mercantile Hotel, Whelan's, Cafe en Seine and The George.
Gardening leave
However, just a year after the formation of the expanded group, the shareholders are involved in a bitter court battle and Mr Gleeson, the managing director, has been placed on gardening leave.
Some of the allegedly unauthorised expenditure “included €12,000 on clothes, shoes and general shopping, €5,000 on dry cleaning, €3,000 on gym membership, €12,000 in personal furniture and €22,000 on holiday trips to Mr Gleeson’s second rented holiday home in the south of France,” Mr O’Meara said.
He also said that despite a non-compete agreement between the shareholders, it was suspected that Mr Gleeson had travelled to France to procure the rights to a competing business franchise, Paul, and charged his expenses while doing so to Mercantile.
Mr Gleeson, in an affidavit, said the expenditure on his credit card was sent monthly to head office and that no issue was raised. This was “because they did not consider the expenditure to be impermissible,” he said.
A US company, EMI MR, which is associated with the Breslin family, is seeking a judgment order for €4.6 million against Mr Gleeson while he, in turn, has taken a separate shareholder oppression case against Ardan Advisory Ltd, parent company of the Mercantile group.
Mr Gleeson claims the summary judgment application is part of the shareholder oppression campaign. The group denies there is any shareholder oppression and EMI MR has said it is not a shareholder in the Mercantile group.
‘Perjured’
In response to Mr Gleeson in the shareholder oppression case, Mr O’Meara has said Mr Gleeson “has perjured himself and has done so hopelessly and ineffectually”.
He has said Mr Gleeson's claim that former Anglo Irish Bank chief executive David Drumm was suggested for the position of finance director of the group is "a deliberate and malicious falsehood".
When the case came before the Commercial Court Monday, it was agreed that a hearing on whether the case seeking the judgment order should be subject to a stay, pending the resolution of the shareholder oppression case, would take place on May 11th.
Rossa Fanning SC, for Mr Gleeson, said “trumped-up” allegations against Mr Gleeson appeared to be shaping up towards a dismissal of his client, something that could lead to separate proceedings.
Aidan Redmond SC, who acts for both EMI-MR and for Ardan Advisory and its subsidiaries, said Mr Gleeson had not submitted any defence to the summary judgment application other than to make “wild allegations”.
