The former chairman of Bank of Scotland (Ireland), Mr Phil Flynn, has said he travelled to Bulgaria to set up financial services businesses.
He said one idea was to replicate the Chesterton Finance operation in Bulgaria. Another more long-term project was to set up a mortgage firm there.
Mr Flynn resigned as chairman of Bank of Scotland (Ireland) after it emerged that he was a director of Chesterton, a Co Cork-based lending firm at the centre of a Garda money-laundering inquiry that has led to the seizure of almost €3 million in cash.
Mr Flynn said he and the principal behind Chesterton, Mr Ted Cunningham, travelled to Bulgaria with a former director of Bank of Scotland (Ireland), Mr Denis O'Connell, and an Irish-based business consultant who was in custody yesterday. The woman has worked as a consultant with a well-known international firm that assists in international business deals and has good contacts in Bulgaria, Mr Flynn said. A legal adviser based in Germany formed part of the group.
Mr O'Connell told the Examiner newspaper on Thursday that he had travelled to Bulgaria, but was "100 per cent innocent and had nothing to hide on the matter". He had travelled there "for the purpose of investigating potential property opportunities".
The Examiner quoted him as saying he had been asked by Mr Flynn to "carry out preliminary checks on Chesterton Finance as part of his assessment to become involved with the company".
Mr Flynn told The Irish Times he had been travelling to Bulgaria since the 1970s and had been working on possible business deals there since 2002. "I just like the place."
He said he had canvassed a lot of people here about doing business in Bulgaria. "People said they would be interested, but that I should go and see what's there and come back."
Mr Flynn said he had his first contact with Chesterton in late 2003 and his first meeting with Mr Cunningham was in early 2004. Mr O'Connell had a look at Chesterton on Mr Flynn's behalf, Mr Flynn said. More recently Mr Flynn had signed a form to become a director of Chesterton and took shares, he said, though these had not been registered in the Companies Registration Office.
Mr Flynn said the Garda had his Chesterton files. He had been to Bulgaria in 2004 and intended going back.
He was interested in the possibility of joint ventures in Bulgaria and "carried a brief for a number of business people". He said there were business opportunities in Bulgaria and "huge Irish investments there".
While in Bulgaria two bank accounts were opened with Corporate Commercial Bank in Sofia and €1,000 lodged in each account. Mr Flynn said Corporate Commercial was chosen because of its excellent reputation in Bulgaria.
Since returning to Ireland, a further €55,000 has been sent to Bulgaria and is held in a solicitor's clients' account.
This money was to make up the share capital for three firms to be set up in Bulgaria in relation to the lending and mortgage company projects, he said.
The mortgage firm would be a more long-term venture as it would require partners and the securing of a licence in Bulgaria.
Two Bulgarian businessmen had talks in Ireland with Mr Cunningham in November 2004 and talked about possible investments here and in Bulgaria.
