A former Swedish professional tennis player, who was a director of a Shannon-based company, has disappeared owing monies to the company, it has been alleged in proceedings before the Master of the High Court.
The company, Phoenix Shannon plc, which specialised in dental products, is now in liquidation. It collapsed in 1996 with a deficit of more than $12.3 million.
The cross-examination of another director, Mr Brian Boland, of Ballyclough, Co Limerick, continued before Master Harry Hill yesterday.
Mr Boland was a director from 1992 and held the positions of operations director and chief financial officer.
He and the Swedish director, Mr Ola Johansson, were suspended in 1996 following a review of the company's finances ordered by the board. Mr Johansson has since vanished.
Following his suspension, Mr Boland took High Court proceedings against the company, and the court ordered his reinstatement pending the outcome of proceedings.
Yesterday, Mr John Gleeson, for the liquidator, Mr George Moloney, questioned Mr Boland about a visit he made to the Philippines in January 1995 to buy gold. Counsel referred to a letter written by Mr Boland to a bank in Manila opening an account on behalf of Phoenix Shannon.
Mr Boland said Mr John Fitzgerald had been sourcing gold for the company and had sourced people in Australia. In opening the Manila bank account, they were demonstrating that Phoenix Shannon had the capacity to pay.
Mr Boland said the idea had been to buy 25 kg of gold every two weeks. It was agreed that initially they would buy and pay for 75 kg as an act of good faith. About $850,000 dollars went to the Manila account.
Mr Gleeson said the payment was recorded as the purchase of raw materials from Mr Trevor T. Towler, but there was a Bank of Ireland statement of March 9th, 1995 which recorded $849,000 coming back to the company from the Philippines.
Mr Boland said Phoenix Shannon did purchase gold. They had gone over to source supplies and had drawn up a contract. However, the transfer of the monies was not to be made until the company was assured the product was correct.
Mr Boland said he went to Manila to ensure the transaction ran smoothly. He was informed there that they would require an export licence.
Mr Boland said the company physically never got the gold, but the substance of the transaction was that the purchase and sale took place.
He added that another person had received the gold on the company's behalf. It was not passed on to Phoenix Shannon, as it could not leave the Philippines.
Because he would not release the monies unless they got the export licence, the company got the money back, Mr Boland said.
Mr Gleeson asked about an entry in the company's sales book of March 9th, 1995 for $848,853. He said the company never got the gold and had cancelled and set at naught the transaction and yet it was recorded as a sale.
Mr Boland said the Shannon company never physically got the gold.
Mr Gleeson asked: "So something you never paid for and never got, you sold?" Mr Boland replied: "That is correct."
On March 31st, 1995, an invoice was issued by Phoenix Shannon to De Gussman Inc (in the Philippines) for the sale of 75 kg of gold to De Gussman for $849,000, Mr Gleeson said.
He asked if this had simply been the cancellation of the transaction for the purchase and the money coming back to Shannon. Mr Boland agreed but added that in his view there had been a sale by his company.
Mr Boland did not accept Mr Gleeson's claim that this was a strange way of recording a transaction and that it was really a fiction. The company had got the gold in the Philippines, he said. He agreed the money never left the Manila bank.
Who in the company which audited the Phoenix Shannon accounts decided this was been a bona-fide transaction, counsel asked. Mr Boland said it never came up as a live issue.
The hearing continues.