AN ACCOUNTANT who denies he sought to make secret profits from a deal involving the €11.5 million purchase of a development site in Sligo has claimed former EU commissioner Ray MacSharry and others approved a sale and sub-sale arrangement for the site which was allegedly not disclosed to some investors.
Accountant Kenneth McMoreland is seeking to be indemnified by Mr MacSharry snr and others against any damages that may be awarded against him in proceedings arising from dealings relating to the Saehan site which was purchased in 2006 by Foresthaze Developments Ltd, a company of which Mr MacSharry snr was chairman.
It is alleged the Saehan site was bought in trust for €9.85 million in April 2006 and later bought by Foresthaze for €11.5 million in October 2006. However, it is alleged the banks were told the price of the land was €11.5 million, in an effort to get more funds.
At the Commercial Court yesterday, Mr Justice Peter Kelly granted an application by Damian Keaney, for Mr McMoreland, to join Mr MacSharry and six others as third parties to proceedings initiated last January by three investors over the site.
The seven are: Ray MacSharry snr, Alcantar, Pearse Road, Sligo; Ray MacSharry jnr, Weston House, Johnstown, Naas, Co Kildare; Marc MacSharry, Fatima, Pearse Road, Sligo; Gerard Healy c/o Kevinsfort Ltd, Castle Street, Sligo; Damien Torsney, Merrion Road, Ballsbridge, Dublin 4; and Edward Donaghy and Jacqueline Donaghy, Castletown, Drumcliffe, Co Sligo.
The application comes after three investors – Arthur Grady, Kieran Grady, John Grady, and their company, TJ Grady Ltd – initiated proceedings last January over the Saehan site alleging a gain from the sub-sale was retained by Mr McMoreland and Jack (Jackie) McMahon, a quantity surveyor.
The Gradys claim they suffered losses of more than €2.4 million because of allegedly fraudulent claims by Mr McMoreland, an accountant and tax specialist, formerly of Gilroy Gannon accountants, and Mr McMahon concerning the purchase by Foresthaze of the Saehan site.
In separate defences, the defendants have denied the claims.
The Grady proceedings are against Mr McMoreland, Mailcoach Road, Sligo; others practicising as Gilroy Gannon accountants, Stephen Street, Sligo; Mr McMahon, Creggconell, Rosses Point, Co Sligo, and Foresthaze, Millbrook, Riverside, Sligo.
The Gradys are claiming damages, including exemplary damages, against Mr McMoreland and Mr McMahon and also want both men to indemnify them against any claims made under guarantees in favour of Foresthaze provided by them to Allied Irish Banks.
In his defence, Mr McMoreland claims the Saehan site was bought in trust in April 2006 for €9.85 million and sold six months later for €11.5 million to Foresthaze.
Mr McMoreland does not deny the Gradys were unaware of the sale and sub-sale arrangement but rejects claims he is guilty of any fraudulent misrepresentation or other wrongdoing in that regard.
If the court decided there was fraudulent misrepresentation, Mr McMoreland is entitled to a contriubution from the seven, it is claimed.
Mr McMoreland claims the promoters of the Saehan development were Ray MacSharry snr, Marc MacSharry, himself and Mr McMahon and they, plus the other third parties, agreed to represent to banks the contract price for the site was €11.5 million so as to get more funds.
While there was a “notional” net gain of some €1.216 million from the sub-sale of the site to Foresthaze, Mr McMoreland denies he realised that gain and pleads the net uplift was credited to Foresthaze.
The Revenue had accepted the gain was of the investors in the project, he said.
The promoters had agreed the gain would be left in Foresthaze for working capital, allocated to each investor proportionately via a loan note from Foresthaze and the promoters would not derive any benefit from the gain, he claims.
It was agreed in discussions involving the promoters and a number of investors on November 17th, 2006, it might create “unnecessary conflict” between shareholders to go into detail about this arrangement so he had described the gain as a discount that had suffered Capital Gains Tax, with the effect additional funds would be available for the project, Mr McMoreland also claims.
Mr McMoreland claims Ray MacSharry snr and Ray MacSharry jnr/Celtic Foods had in April 2006 advanced €100,000 each towards the Saehan project while Gerald Healy/Kevinsfort Ltd had advanced €200,000 and Damien Torsney €100,000.
He claims a contract to purchase the Saehan site for €9.85 million was entered into between Saehan and a solicitor acting in trust for himself and Mr McMahon in April 2006 because Foresthaze had yet to be incorporated and the identity of the persons to make up the consortium to acquire the site had yet to be confirmed.
Foresthaze has indicated it will take no active part in the proceedings and will abide by any court order. The case has been adjourned to June 28th.
