Record Number: 1999 /163 Cos

THE HIGH COURT

IN THE MATTER OF THE COMPANIES ACTS 1963 to 1990
AND IN THE MATTER OF PART II OF THE COMPANIES ACT 1990 AND SECTIONS 8 AND 17
AND IN THE MATTER OF ANSBACHER (CAYMAN) LIMITED
(formerly GUINNESS MAHON CAYMAN TRUST LIMITED,
ANSBACHER LIMITED and CAYMAN INTERNATIONAL BANK AND TRUST COMPANY
LIMITED)

R E P O R T OF T H E I N S P E C T O R S

A P P O I N T E D TO E N Q U I R E I N T O T H E

A F F A I R S OF A N S B A C H E R (CAYMAN)

LIMITED

Published by Order of the Court made on 24 June 2002

V O L U M E [ 1 3 ] : A P P E N D I X X V ( 1 4 3 ) TO X V ( 1 5 2 )
 ISBN 0-7557-1355-9

© Government of Ireland 2002

Appendix XV (143) Blue Jeans Limited & JB Agencies
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to
Blue Jeans Limited & J B Agencies.

a) Transcript of evidence of Mr James Sweeney dated 27 June 2000.

b) Guinness and Mahon extract of nominal ledger balance listing dated 30

September 1986.

c) Letter of 12 January 1988 from Blue Jeans Ltd to Guinness and Mahon.

d) Internal Guinness & Mahon Ltd Credit Memo of 4 September 1986.

e) Internal Guinness & Mahon Ltd Credit Memo of 14 October 1986.

f) Internal Guinness & Mahon Ltd Credit Memo of 8 January 1987.

g) Internal Guinness & Mahon Ltd Credit Memo of 10 March 1987.

h) Internal Guinness & Mahon Ltd Credit Memo of 16 July 1987.

i) Internal Guinness & Mahon Ltd Credit Memo of 11 August 1987.

j) Internal Guinness & Mahon Ltd Credit Memo of 5 February 1988.

k) Internal Guinness & Mahon Ltd Credit Memo of 8 March 1988.

1) Internal Guinness & Mahon Ltd Credit Memo of 30 August 1988.

m) Facsimile of 26 June 1990 from Blue Jeans Ltd to JB Agencies.

2. Correspondence received from or on behalf of Blue Jeans Limited & JB Agencies

Limited.

a) Letter of 22 January 2002 from Ivor Fitzpatick & Co Solicitors to Mary

Cummins, Solicitor to the Inspectors.
Appendix XV (143) (1) (a)
PRIVATE EXAMINATION OF MR. JAMES SWEENEY

UNDER OATH

ON TUESDAY, 27TH JUNE 2000

I hereby certify the

following to be a true and

accurate transcript of my

shorthand notes in the

above named interview.

Stenographer
 PRESENT

The Inspectors: MR. JUSTICE COSTELLO

MR. ROWAN FCA

MS. MACKEY BL

Solicitor to the Inspectors MS. M. CUMMINS

Interviewee: MR. JAMES SWEENEY

 I N D E X

WITNESS EXAMINATION

MR. J. SWEENEY MS. MACKEY

MR. ROWAN

MR. JUSTICE COSTELLO

 1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,

2 22ND JUNE 2000:

4 MR. JUSTICE COSTELLO: Good morning Mr. Sweeney.

5 MR. SWEENEY: Morning.

6 MR. JUSTICE COSTELLO: Let me introduce myself, I

7 am Declan Costello and on

8 my right is Ms. Mackey and on my left is Mr. Rowan.

9 As you know we are the Inspectors who have been

10 appointed by The High Court.

11

12 The interview which we are going to have today will

13 be taken down and transcribed and we will ask you

14 later to come in to sign the transcript when you

15 have had a read of it.

16

17 However, your evidence will be taken under oath.

18 I will ask our solicitor now, Ms. Cummins, to

19 administer the oath to you.

20

21

22

23

24

25

26

27

28

29

4
 1 MR. JAMES SWEENEY, HAVING BEEN SWORN, WAS EXAMINED

2 AS FOLLOWS:

4 MR. JUSTICE COSTELLO: Mr. Sweeney, I am going to

5 ask Ms. Mackey to ask you

6 some questions first.

7 A. Yes.

9 MR. JAMES SWEENEY WAS EXAMINED AS FOLLOWS BY

10 MS. MACKEY:

11

12 1 Q. MS. MACKEY: Mr. Sweeney, just for the

13 record, before we start to

14 look at your statement, could you just give me a

15 brief history of your own career. Have you been in

16 business all your life?

17 A. I have worked for different companies before I went

18 into business on my own.

19 2 Q. Yes?

20 A. I was in the pharmaceutical industry. I was in the

21 heavy machinery equipment.

22 3 Q. Yes?

23 A. And I was in the leather industry.

24 4 Q. Right. You are currently, I think, a Director of

25 J.B Agencies?

26 A. Correct, that is us.

27 5 Q. Is that correct?

28 A. Yes.

29 6 Q. Will you tell me a little bit about J.B Agencies?

5
 1 When did you join it?

2 A. Well, I started the company.

3 7 Q. I see?

4 A. From the leather business.

5 8 Q. Yes?

6 A. It was an off-shoot of an introduction to the

7 clothing trade and I first started there as an agent

8 for Wallys International UK Limited selling leisure

9 wear.

10 9 Q. Yes?

11 A. And from there we -- the agency end of the business

12 was quite unprofitable, if nothing to say very hard

13 to survive in. We were working on a commission

14 basis.

15 10 Q. Yes?

16 A. We sold; got a commission; if the principals were

17 paid the goods were delivered etc. etc. It

18 transpired, that along that route, I had made

19 acquaintances with Wallaert, who was the owner

20 of Wallys and he was situated in Belgium but we

21 were buying out of the English company, which is a

22 guy called Cohen.

23 11 Q. Yes?

24 A. Now, as it transpired, as I say, the goods were

25 delivered. Payment was very slow, hence Wallys

26 slowed down the delivery. The commission became

27 smaller and I -- only I was living at home and

28 unmarried at the time, I couldn't have survived it.

29 It was 5% commission.
 1 12 Q. Right?

2 A. So, I put these propositions to the English

3 guy, Cohen, and he said he could do nothing about it

4 and he put the proposition to Wallaert and he said

5 -- Wallaert put the proposition to me that I could

6 become a wholesaler.

7 13 Q. Yes?

8 A. But wholesaling means that you should have some

9 financial backing.

10 14 Q. Yes?

11 A. And I had no financial backing at all. So, Wallaert

12 said he would put me into a situation whereby we

13 could deal direct from Belgium. We could -- he

14 would put up a marketing company that would look

15 after the marketing expertise in Ireland and

16 financially back the borrowings that would be

17 required by J.B Agencies to buy from him.

18 15 Q. Right?

19 A. And this would be all based on orders placed in

20 advance. So, in other words sales six months in

21 advance.

22 16 Q. Right?

23 A. So, if you got a £1,000 order he would know that we

24 would require £1,000 to buy it.

25 17 Q. When did you put all this in place? When did J.B

26 Agencies...(INTERJECTION)?

27 A. Start?

28 18 Q. Yes?

29 A. The early 1970's.

 1 19 Q. Yes?

2 A. The exact dates I am not quite sure.

3 20 Q. Is it an incorporated company?

4 A. Incorporated means what? Limited like?

5 21 Q. Is it J.B Agencies Company Limited?

6 A. J.B Agencies Limited, yes, yes.

7 22 Q. Yes?

8 A. It is incorporated.

9 23 Q. Yes?

10 A. Yes, fully.

11 24 Q. What does the J.B stand for?

12 A. It is a nickname. I was just called that at school.

13 25 Q. It is your own nickname?

14 A. Yes.

15 26 Q. J.B Agencies?

16 A. Yes.

17 27 Q. I see. Your full name is James Brian, is that

18 right?

19 A. No, James Patrick.

20 28 Q. James Patrick?

21 A. J.B was a nickname. J.P. didn't rhyme.

22 29 Q. Pardon?

23 A. J.P. didn't rhyme, James Patrick.

24 30 Q. J.P. did not rhyme. I see?

25 A. So, the guy called me J.B.

26 31 Q. I see. The company began then in the early 1970's?

27 A. Yes, yes.

28 32 Q. You traded up until?

29 A. We are still trading.

8
 1 33 Q. You are still trading?

2 A. Yes, yes.

3 34 Q. You are currently a Director of J.B Agencies, is

4 that right?

5 A. Yes, yes.

6 35 Q. Who are the shareholders in J.B?

7 A. I am one shareholder and Terry Kennedy is another.

8 36 Q. Just the two of you?

9 A. Yes.

10 37 Q. Yes?

11 A. Yes.

12 38 Q. Do you hold equal shares?

13 A. No, I have 60%. He has 40%.

14 39 Q. Right. Are you the two Directors as well?

15 A. Yes.

16 40 Q. Right. There are no other Directors?

17 A. No.

18 41 Q. I see. Do you have a copy of the statement that you

19 provided to us with you (Exhibit 1)?

20 A. I ... (INTERJECTION) .

21 42 Q. We will give you a copy if you have not?

22 A. No, I don't have actually, not with me.

23 43 Q. We will give you a copy here now because I want to

24 refer to it (Same Handed)(Exhibit 1).

25 A. Thank you.

26 44 Q. This is the statement you sent us in in answer to

27 the letter that we sent you?

28 A. Correct, yes.

29 45 Q. Seeking information about "Ansbacher", the company

9
 1 that we are investigating?

2 A. Yes .

3 46 Q. You say at paragraph two there that:

4 "J.B Agencies Ltd opened an account

with Guinness & Mahon Ltd and operated
5 this business account from 1984 to 1992
approximately."
6

7 I want to ask you about your relationship with

8 Guinness & Mahon and how that began? I understand

9 that your bankers were Ulster Bank or Northern Bank,

10 or both?

11 A. Both.

12 47 Q. Both?

13 A. Well, Northern Bank and then Ulster Bank, yes.

14 48 Q. I see. How did you first come into contact with

15 Guinness & Mahon in the 1980's?

16 A. We were introduced to Guinness & Mahon by

17 Blue Jeans.

18 49 Q. I see. Yes?

19 A. Who were the people who were going to make the

20 guarantees available to us to trade.

21 50 Q. Right. May be I could just stop you there. If you

22 were introduced to Guinness & Mahon by Blue Jeans

23 may be, before we get on to your relationship with

24 Guinness & Mahon, this would be a good moment to ask

25 you about Blue Jeans. Who were Blue Jeans?

26 A. It was a marketing company of Wallaert's.

27 51 Q. Yes?

28 A. And they were responsible for marketing the leisure

29 wear business on behalf of their owners and they

10
 1 introduced us to markets in Italy, Holland, Germany.

2 52 Q. Right. When you say they were "a marketing company

3 of Wallaert's" were they a subsidiary of Wallaert's?

4 A. I am not quite sure. I don't know.

5 53 Q. And...(INTERJECTION)?

6 A. Just Wallaert said, "Here is a proposition. Here is

7 my marketing company." Well, now, whether he owned

8 it or whether he didn't own it.

9 54 Q. Right?

10 A. Or whether it was owned by Cohen, I don't know.

11 55 Q. Right?

12 A. I don't know who owned Blue Jeans.

13 56 Q. I see. Who did you deal with in Blue Jeans?

14 A. I didn't deal with anybody as such because

15 Blue Jeans basically gave us marketing.

16 57 Q. Right?

17 A. Display equipment, ads, negotiated the back-to-back

18 revenue to get us...(INTERJECTION).

19 58 Q. Their business was marketing?

20 A. Marketing, yes, yes. Like there was no dealing with

21 them.

22 59 Q. When I...(INTERJECTION)?

23 A. Like if we put an order down with

24 Wallys...(INTERJECTION).

25 60 Q. When I say "dealing" who was the person that you

26 spoke to or wrote to?

27 A. We didn't. We dealt with Wallaert. We didn't deal

28 with Blue Jeans as such.

29 61 Q. You have just told me Blue Jeans introduced you

11
 1 to Guinness & Mahon. So, somebody from

2 Blue Jeans ... (INTERJECTION)?

3 A. Well, they didn't introduce us. What was done was

4 we placed an order, say for next winter, with

5 Wallaert.

6 62 Q. Yes?

7 A. The value of that was £500,000, right?

8 63 Q. Yes?

9 A. An instruction came from Blue Jeans to their bankers

10 in Dublin, which was Guinness & Mahon, to make

11 available a Letter of Credit for the purchase of

12 that £500,000 worth of gear.

13 64 Q. Right?

14 A. Now, as such we -- our dealings with Blue Jeans was

15 -- there was no dealings at all.

16 65 Q. I asked you how you first came into contact with

17 Guinness & Mahon and you told me that you

18 were introduced by Blue Jeans?

19 A. Blue Jeans, yes, that is their bankers in Dublin.

20 66 Q. Let us just go back again then to your

21 first contact with Guinness & Mahon. Who said to

22 you, "Mr. Sweeney, you should go down to

23 Guinness & Mahon"?

24 A. Blue Jeans.

25 67 Q. Who in Blue Jeans?

26 A. They didn't talk to me direct. We dealt with

27 Wallaert.

28 68 Q. Yes. What I am trying to find out is what caused

29 you personally to go to Guinness & Mahon?

12
 1 A. Blue Jeans because that was their bankers. They

2 said, "The money will be available to you in Dublin

3 in a bank called Guinness & Mahon".

4 69 Q. Someone in Blue Jeans said this to you Mr. Sweeney?

5 A. They didn't say it to me. They wrote.

6 70 Q. Who wrote to you?

7 A. Well, you have one of their...(INTERJECTION).

8 71 Q. I am asking you a question: Who wrote to you?

9 A. Well, they didn't actually write to me. They wrote

10 to...(INTERJECTION).

11 72 Q. However, who did they write to?

12 A. They wrote to the bank.

13 73 Q. The bank. Did the bank contact you and say, "Come

14 in and see us"? Was that the first contact you had

15 with Guinness & Mahon? I am trying to establish

16 here Mr. Sweeney what caused you first to establish

17 a relationship with Guinness & Mahon?

18 A. Blue Jeans.

19 74 Q. You answer me each time "Blue Jeans"?

20 A. Blue Jeans, yes, yes.

21 75 Q. I want to know how that came about?

22 A. Well, I am probably -- I am obviously not describing

23 myself well. When we transferred from agent to

24 wholesaler.

25 76 Q. Yes?

26 A. We needed financial backing. I told Wallaert I did

27 not have the means to finance a wholesale company.

28 77 Q. Yes. Can I just stop you there Mr. Sweeney. You

29 speak of Wallaert and you speak of Blue Jeans?

13
 1 A. Yes.

2 78 Q. There was a person in each case. I want a name of

3 the person that you spoke to and who spoke to you?

4 Who in Wallaert said this to you?

5 A. Wallaert himself.

6 79 Q. What is his name?

7 A. Roland Wallaert.

8 80 Q. Ronan?

9 A. Roland Wallaert.

10 81 Q. Roland Wallaert?

11 A. Yes.

12 82 Q. How do you spell Wallaert?

13 A. W-a-l-l-a-e-r-t.

14 83 Q. Thanks. Mr. Wallaert told you; continue?

15 A. He said, Mr. Wallaert, said, "The marketing end of

16 the business will be handled by Blue Jeans. The

17 finance will be put in operation." They will

18 name the bank. "You will have your finance made

19 available to you in a bank called Guinness & Mahon

20 in Dublin".

21 84 Q. Right?

22 A. Right.

23 85 Q. Mr. Wallaert told you all this?

24 A. Through Blue Jeans though.

25 86 Q. He told you?

26 A. Yes, yes.

27 87 Q. Yes?

28 A. But he said that end of the business was not his.

29 His end of the business was manufacturing.

14
 1 88 Q. Yes. However, nevertheless he was the one who told

2 you?

3 A. Blue Jeans's end was marketing but yet he was

4 involved somewhere along the line.

5 89 Q. I see. On foot of what Wallaert told you you went

6 to Guinness & Mahon, is that right?

7 A. We were advised in Guinness & Mahon that we had

8 available letters of credit.

9 90 Q. Wait now. You went to Guinness & Mahon, is that

10 right?

11 A. To know if there were letters of credit available.

12 91 Q. Who did you contact in Guinness & Mahon?

13 A. I don't honestly know. This was very -- we were in

14 Guinness & Mahon may be once or twice a year.

15 92 Q. I want to get back to your first contact. I want to

16 know (A) who introduced you and?

17 A. Who I talked to in Guinness & Mahon.

18 93 Q. And it was Mr. Wallaert, and to whom he

19 introduced you?

20 A. In Guinness & Mahon?

21 94 Q. Yes?

22 A. I don't know.

23 95 Q. Were you asked to go to see Mr. Keane?

24 A. Mr. Keane?

25 96 Q. Yes?

26 A. I could have been, I don't know.

27 97 Q. You do not remember?

28 A. No. Well, I don't know the name. It doesn't mean

29 anything to me.

15
 1 98 Q. Yes. Who did you meet in Guinness & Mahon? Who did

2 you know over the years there?

3 A. I honestly don't know anybody in Guinness & Mahon

4 because, I mean to say, all I was interested in was

5 that the money was there for us to buy our orders

6 for the next season.

7 99 Q. Yes?

8 A. And like if the money wasn't there they would either

9 sent a letter -- we would get a telex or a fax from

10 Blue Jeans to say that the money was in place.

11 Now, who in Guinness & Mahon was really irrelevant

12 because we would have to pay Guinness & Mahon after

13 we sold the goods, collect the money and pay them

14 and...(INTERJECTION).

15 100 Q. I understand you...(INTERJECTION).

16 MR. JUSTICE COSTELLO: I just want to interrupt

17 you for a moment. You are

18 going a little fast Mr. Sweeney for the

19 stenographer?

20 A. I beg your pardon.

21 MR. JUSTICE COSTELLO: Would you mind going a

22 little slower please in

23 your answers?

24 A. Certainly, yes, certainly.

25 MR. JUSTICE COSTELLO: Yes.

26 101 Q. MS. MACKEY: I understand you to say

27 here in your statement

28 (Exhibit 1), if you would just look at the end of

29 paragraph two Mr. Sweeney:

16
 1 "J.B Agencies Ltd opened an account
with Guinness & Mahon Ltd"?
2

3 A. Yes.

4 102 Q. For the purposes of today you are J.B Agencies. You

5 are the principal shareholder. Was it you who

6 opened the account or was it your fellow Director?

7 A. I am not quite sure. I am not. I am honestly not

8 quite sure. I really am. I am not trying to be

9 evasive on that. I honestly don't know which of us

10 opened it.

11 103 Q. Very good?

12 A. But one of us opened the account because there was

13 an account opened.

14 104 Q. Yes?

15 A. I have said that.

16 105 Q. So...(INTERJECTION)?

17 A. So, I am not denying that we opened an account.

18 106 Q. Yes. You opened an account?

19 A. So, which one of us opened it, I don't know.

20 107 Q. Very good?

21 A. Mostly the business end of it would probably be, the

22 financial end would probably have been, him.

23 108 Q. Yes. I would like to just ask you to look at a

24 document Mr. Sweeney; it is page 26. (Exhibit 2) is

25 that your signature at the bottom of that letter Mr.

26 Sweeney?

27 A. It is, yes.

28 109 Q. Yes. You will see that that is a letter then

29 written by you to:

17
 1 "Dear Martin."

3 At the top we see:

4 "Attn. Mr. M. Keane"?

6 A. Yes, yes.

7 110 Q. A letter dated the 13th January 1984?

8 A. Right.

9 111 Q. I asked you a moment ago if you knew Mr. Keane and

10 the name did not seem to be familiar to you.

11 However, here you are writing to him addressing him

12 as:

13 "Dear Martin"

14

15 does that bring anything back to you?

16 A. Not really.

17 112 Q. You do not recollect who Mr. Keane is?

18 A. Well, if you would ask me to identify him in a

19 line up I couldn't.

20 113 Q. Do you remember dealing with Mr. Keane now?

21 A. Do I? Well, I can say that that is obviously a

22 meeting we had. I am not denying that and obviously

23 this was just put in writing to facilitate what he

24 required from us to get our L/C.

25 114 Q. Very good. You can just put that to one side for

26 the moment now?

27 A. Yes, Okay.

28 115 Q. And we will just gp on with what I want to ask you?

29 A. Yes.

18
 1 116 Q. Did you meet with Mr. Desmond Traynor when you were

2 in Guinness & Mahon?

3 A. I honestly don't know.

4 117 Q. You do not remember meeting Mr. Traynor?

5 A. No.

6 118 Q. Did you meet Mr. Collery?

7 A. I honestly don't know.

8 119 Q. You do not know?

9 A. No.

10 120 Q. At the time that you began your relationship with

11 Guinness & Mahon who were your financial advisors?

12 A. You mean our accountants?

13 121 Q. Yes?

14 A. I think Simpson Xavier.

15 122 Q. Who were your advisors before them? Who were you

16 accountants before them?

17 A. Frank Kavanagh & Company Limited.

18 123 Q. Frank Kavanagh & Company. Did you have s solicitor

19 at that period?

20 A. The company solicitor, yes.

21 124 Q. Who was that?

22 A. Richard Dennehy.

23 125 Q. Richard Dennehy?

24 A. Still is the company solicitor on some factors.

25 126 Q. I want to just move on down your statement, (Exhibit

26 1) in that same paragraph 2 you talk about Guinness

27 & Mahon granting a Letter of Credit to you,

28 "...and this letter of credit was

guaranteed by Blue Jeans Ltd, one of
29 J.B Agencies suppliers."

19
 2 You have just told me that this was a marketing

3 company?

4 A. Well, yes, but it was also a supplier of marketing

5 expertise. I mean to say we would regard, in the

6 sales field, the marketing end as important as the

7 goods. As the supplier we had to pay for it.

8 127 Q. I see.

9 "In this regard we enclose herewith a

copy of this Letter of Credit
10 facilities. I can confirm that his is
the only account that we have with
11 Guinness & Mahon and we did not
operate any deposit account with
12 Guinness & Mahon Limited?

13

14 A. We had a current account with Guinness & Mahon.

15 128 Q. Right. I would like you to look at some

16 documents. Page 29 Mary please (Exhibit 3) (Same

17 Handed). This is a document, an internal document,

18 from Guinness & Mahon. It is one that you furnished

19 to us yourself Mr. Sweeney. It is application for a

20 Letter of Credit facilities, the one to which you

21 have referred?

22 A. Yes.

23 129 Q. It is dated 8th February 1984. If we look on down

24 we see that you are looking for an extension of your

25 Letter of Credit facility for a year. The source of

26 repayments is cash flow. Then we move on down and

27 we see:

28 "Security."

29

20
 1 Do you see?

2 A. Yes.

3 130 Q.

4 "Funds presently on deposit £90,000."

6 What does that refer to Mr. Sweeney?

7 A. That must refer to between Blue Jeans and them

8 because they were guaranteeing us our money.

9 131 Q. It does not say anything about Blue Jeans. The name

10 of the applicant is J.B Agencies Limited. The

11 security is expressed to be

12
"Funds presently on deposit £90,000.
13 Joint & several guarantees held..."

14

15 Something,

16 "...life policies to come."

17

18 They appear to be the security given by

19 J.B Agencies?

20 A. Well, I am afraid I honestly don't know what it

21 means then,

22 "Funds presently on deposit £90,000."

23

24 I don't know. I would assume that was all

25 Blue Jeans's department.

26 132 Q. However, as I understand your evidence, Blue Jeans

27 simply gave a guarantee?

28 A. Yes.

29 133 Q. This is not referring to a guarantee. It refers to

21
 1

2 "Joint & several guarantees"

4 down below. However, this refers to,

5
"Funds presently on deposit"?
6

7 A. Yes, but where is it on deposit?

8 134 Q. With Guinness & Mahon, we presume. I do not know.

9 Where is it?

10 A. It may be on deposit with Blue Jeans. I don't know

11 either.

12 135 Q. Are you saying that these funds on deposit are not

13 funds belonging to J.B Agencies?

14 A. No, we never had but not to my knowledge had we a

15 deposit account with them. We did not. We had a

16 trading account that covered our L/C purchases.

17 136 Q. I see. I would like you to look at some more

18 documents. Mary page 28 please (Same Handed)

19 (Exhibit 4). This is another application for a

20 Letter of Credit facility and for a VAT guarantee.

21 I do not think the date appears on it but we see

22 down at the bottom that it does. The 27th, I think,

23 September 1984?

24 A. Yes, I see that, yes.

25 137 Q. It seems to be a later one than the previous one?

26 A. Yes .

27 138 Q. Again, if we look at security there we see:

28 "Joint & Several guarantees of

Directors already held. Negative
29 Pledge. Adequately secured to the
extent of £110,000.00"?
 1

2 A. Yes .

3 139 Q. What do you think that refers to Mr. Sweeney?

4 A. Blue Jeans's end of the organisation.

5 140 Q. Pardon?

6 A. Blue Jeans.

7 141 Q. You know it is not sufficient for you really to

8 answer me by saying "Blue Jeans's end of the

9 organisation". This is security. Blue Jeans

10 apparently gave a guarantee, is what you are telling

11 us. There is no reference...(INTERJECTION)?

12 A. Blue Jeans gave us the ability to borrow from

13 Guinness & Mahon.

14 142 Q. Right?

15 A. Yes, that is...(INTERJECTION).

16 143 Q. How did they give you that ability? What did they

17 do?

18 A. I don't know the workings of what way Blue Jeans did

19 it. I was told that we would get the facilities to

20 borrow from Guinness & Mahon the amount of money

21 required for our purchases for the season in

22 advance. Now, what we had to do for our end was to

23 give personal guarantees, give a lean on our debts

24 and open insurance policies.

25 144 Q. Yes?

26 A. The other end of the situation was theirs because

27 Guinness & Mahon was their backer, not ours. We

28 didn't pick Guinness & Mahon. They picked

29 Guinness & Mahon.

 1 145 Q. I see?

2 A. Sure they have me down there as Brian Sweeney.

3 146 Q. Is that a mistake, yes?

4 A. Well, I am J.B.

5 147 Q. Yes?

6 A. A nickname, as I told you.

7 148 Q. Yes?

8 A. My name is James Patrick.

9 149 Q. Yes?

10 A. So, I mean to say does that mean everything in that

11 document is correct?

12 150 Q. Can I ask you to look at a document you provided to

13 us? It is page 27 Mary please (Same handed)

14 (Exhibit 5). This is a document which you gave us

15 in your bundle of documents. It appears to be your

16 resident call deposit account with Guinness & Mahon,

17 is that correct?

18 A. What does resident call mean?

19 151 Q. This is your account Mr. Sweeney. I am reading

20 what is on the top of it. You provided this to us.

21 It is your account, your J.B account, with

22 Guinness & Mahon?

23 A. That is what it says anyhow. I don't know what

24 resident call means anyhow.

25 152 Q. What I want to ask you is why you have not given us

26 the entire of that page. We simply have a half

27 page?

28 A. I gave you everything that Guinness & Mahon gave me

29 because we have nothing else.

24
 1 153 Q. Right?

2 A. This -- I gave you everything that I had.

3 154 Q. I see?

4 A. That document was given to us by Guinness & Mahon,

5 this whole thing.

6 155 Q. You see that there is only half the page there. We

7 do not see the balance in that account at all. The

8 page is cut off half way down?

9 A. Well, I didn't do that.

10 156 Q. You do not have the other half?

11 A. No, I do not.

12 157 Q. Do you have any document relating to your accounts

13 with Guinness & Mahon other than those that

14 Guinness & Mahon provided to you?

15 A. No, no. The only things we would have had with

16 Guinness & Mahon was paying them back the L/C that

17 we borrowed from them.

18 158 Q. Did you not keep copies of your documents and your

19 letters?

20 A. We would have had through the normal accountancy

21 procedure, of course.

22 159 Q. Where are they now?

23 A. Well, you are going back to 1984.

24 160 Q. Yes?

25 A. We would have -- they would be kept for the period

26 or time required. That is a long time ago.

27 161 Q. Yes?

28 A. Like we produced anything that you required of us in

29 that letter that you sent to us.

25
 1 162 Q. You produced to us everything Guinness & Mahon had

2 given you, I am asking you?

3 A. We produced everything that we had, that we had.

4 163 Q. You produced everything that you had?

5 A. We have. We have nothing.

6 164 Q. I see. So we have everything that you have?

7 A. You have everything, yes.

8 165 Q. Were those documents that you had the only

9 documents that Guinness & Mahon gave you or were

10 there other documents?

11 A. Well, I gave you the L/C copy. No, I think that is

12 in that folder as well, isn't it? They are the only

13 documents we had, yes.

14 166 Q. What I am asking you is: The documents that you

15 had, were they all the documents that you got

16 from Guinness & Mahon?

17 A. Correct, they were all we had, yes.

18 167 Q. In other words you had no documents of your own

19 retained at all?

20 A. Retained to?

21 168 Q. At all?

22 A. No, nothing.

23 169 Q. You did not keep any?

24 A. No. Well, when the trading year is over you start

25 another afresh, you go out and you sell. Our job is

26 selling, not retaining documents. We -- anything

27 that was required to be kept, the accountants would

28 tell us and we would fall in line with what they

29 say, and anything that is required by law is in

26
 1 J.B Agencies.

2 170 Q. Would your accountants have copies of those

3 documents still?

4 A. I don't know about that.

5 171 Q. Would you ask them?

6 A. Would I ask them?

7 172 Q. Yes?

8 A. Well, if you can let me know what you want me to

9 ask the accountants.

10 173 Q. Yes?

11 A. I will certainly do that without any hesitation.

12 174 Q. That would be great if you would ask your

13 accountants?

14 A. No problem.

15 175 Q. If you would your accountants then if they would

16 provide you with any documents they have?

17 A. Can you write that down for me so when I leave

18 here...(INTERJECTION).

19 176 Q. We will?

20 A. I will know exactly what you want.

21 177 Q. We will. It will be in the transcript as well?

22 A. Okay.

23 178 Q. However, I will say it now anyway: We would ask you

24 to ask your accountants to provide us with any

25 documents you have in relation to your accounts with

26 Guinness & Mahon, to any borrowings that you had

27 with Guinness & Mahon?

28 A. Yes.

29 179 Q. And any copies of any correspondence in relation to

27
 1 those borrowings?

2 A. Yes, sure.

3 180 Q. Or any securities that were put in place?

4 A. Certainly.

5 181 Q. Thank you very much. Could I show you another

6 document? It is page 44 Mary please (Same Handed).

7 It is again one of the documents that you provided

8 to us. This is a fax to Terry Kennedy, who is your

9 fellow Director and shareholder. It appears to be

10 from one of the Directors of Blue Jeans Limited, is

11 that correct (Exhibit 6)?

12 A. Yes.

13 182 Q. Did you know Mr. Nichols?

14 A. No.

15 183 Q. Had you personally any contact with him?

16 A. Not really, no.

17 184 Q. When you said "not really" what do you mean? Did

18 you or did you not?

19 A. Well, a fax comes to J.B Agencies. That is the kind

20 of...(INTERJECTION).

21 185 Q. The fax came to Terry Kennedy?

22 A. Well, he is my partner.

23 186 Q. However, did you have any contact with Mr. Nichols?

24 A. No, no.

25 187 Q. Did you ever speak to him on the telephone?

26 A. I could have. I may have spoken to him on the

27 telephone, yes.

28 188 Q. What would you have been speaking to him about?

29 A. "Is our Letter of Credit alright, our guarantee

28
 1 alright?," may be, if I spoke to him. I don't

2 know. That is a long time ago. I don't know.

3 189 Q. In fact you would occasionally have had contact with

4 Mr. Nichols or Blue Jeans about your financial

5 affairs in spite of what you said earlier?

6 A. Only insofar as the facility -- if and for -- if I

7 were to go down that road, that the L/C wasn't going

8 to be there, would be in contact with Blue Jeans.

9 Most of our contact would be with Wallaert.

10 190 Q. Yes. However, you were in a position where you

11 could contact Blue Jeans direct?

12 A. Yes.

13 191 Q. When you did contact them was it always Mr. Nichols

14 or was it somebody else?

15 A. I don't honestly know. I mean to say you would ring

16 Blue Jeans, if one did ring Blue Jeans, which I

17 don't think we did very often to be honest with you.

18 It was Wallaert, as I say.

19 192 Q. Yes?

20 A. Wallaert was mostly our connecting point to see

21 where your Letter of Credit guarantee was.

22 193 Q. Yes. This fax to Mr. Kennedy (Exhibit 6) is a

23 confirmation that they were willing to guarantee

24 Letter of Credit facilities up a maximum of

25 Stg£475,000.

26 A. Yes.

27 194 Q. Mr. Nichols goes on to say:

28 "We can provide collateral in the form

of cash deposits in support of any such
29 guarantee"?

29
 1

2 A. Yes .

3 195 Q. What do you understand that to mean?

4 A. Well, it means that, basically what it means is

5 that, we have given Wally orders to the value of

6 £475,000.

7 196 Q. Yes?

8 A. They were willing to make that money available to us

9 for borrowing and they were putting the money aside

10 to please their backers, which are Guinness & Mahon,

11 in support of the guarantee.

12 197 Q. This fax here (Exhibit 6) was provided to you to

13 provide to Guinness & Mahon, is that correct?

14 A. No, that was telling us that the L/C facility has

15 been Okayed. In other words all our trading, our

16 purchasing, was brought forward to the value of

17 £475,000 and we could -- we knew we were going to

18 get the goods.

19 198 Q. Was this letter for your information or for the

20 information of Guinness & Mahon?

21 A. For ours. It was sent to us.

22 199 Q. Why would they be telling you that they could

23 provide collateral? Was that not something they

24 would have to tell the bank?

25 A. Well, if they didn't sell -- if we didn't know we

26 had the collateral that meant that we weren't going

27 to get the goods. We were out of business. I

28 presume they told the bank as well because they made

29 the L/C facility available to the bank. They

 1 guaranteed the L/C facility.

2 200 Q. When I was asking you earlier about the security

3 mentioned in a couple of the letters of facility and

4 there was a figure mentioned, you said, "That was

5 Blue Jeans's business. That was Blue Jeans's end of

6 things. It must have referred to Blue Jeans"?

7 A. Yes .

8 201 Q. £90,000 and is £110,000?

9 A. Yes .

10 202 Q. What I understood from what you were saying was that

11 Blue Jeans and Guinness & Mahon had some arrangement

12 whereby Guinness & Mahon would be aware of what ever

13 Blue Jeans was using to support their guarantees.

14 However, that was not your affair, is that what you

15 intended to say to me?

16 A. Yes. The guarantee was between Blue Jeans's bank

17 and Guinness & Mahon in Dublin.

18 203 Q. Right?

19 A. Yes, and -- yes.

20 204 Q. Then I wonder, and I ask you again, why were

21 Blue Jeans telling you that they could provide cash

22 deposits to support the guarantee? The guarantee

23 they are talking about here is the guarantee to

24 Guinness & Mahon, is it?

25 A. Well, yes. That is what I presume that is too, yes.

26 205 Q. Yes?

27 A. Very simply because we were anxious to know whether

28 our purchases were going to be -- were we going to

29 get the money from Guinness & Mahon in Dublin.

31
 1 206 Q. I mean you would get the money from Guinness & Mahon

2 once Guinness & Mahon had the Letter of Credit, is

3 is not right?

4 A. But we wouldn't. They weren't opened at this stage.

5 207 Q. Yes?

6 A. And we wanted to know why they weren't opened.

7 208 Q. I see?

8 A. So, obviously we made enquires. They sent us the

9 fax (Exhibit 6) to say that the guarantee of the L/C

10 facility was made available.

11 209 Q. They were confirming that they were willing to

12 guarantee one?

13 A. Yes.

14 210 Q. Not that it was...(INTERJECTION)?

15 A. Yes, and it wasn't always that they were willing

16 either. If the orders didn't justify the amount of

17 borrowings that we were looking for off Wallaert.

18 211 Q. Yes?

19 A. They wouldn't give -- grant us. We would have to

20 have the orders down.

21 212 Q. I see?

22 A. And they had -- yes.

23 213 Q. In fact these Letters of Credit were not automatic?

24 A. No.

25 214 Q. This was not a set up that Wallaert had established

26 for you whereby you would certainly get your

27 borrowings from Guinness & Mahon and that these

28 would be put in place? You had to satisfy

29 Blue Jeans first of all?

32
 1 A. I had to satisfy Wallaert.

2 215 Q. Yes?

3 A. That the orders were in place.

4 216 Q. Yes?

5 A. And he would scrutinize some of the orders because

6 he had previous experience.

7 217 Q. Yes?

8 A. Of supplying the retail trade in Ireland and not

9 getting paid.

10 218 Q. Yes?

11 A. So, now he had one account in Ireland, which was me,

12 but he also didn't want to end up not getting paid.

13 219 Q. Mr. Wallaert's company, I think you said, was in

14 Belgium, is that right?

15 A. Yes.

16 220 Q. Blue jeans is based in Guernsey?

17 A. Yes.

18 221 Q. They operated their marketing from there, is that

19 correct?

20 A. Yes.

21 222 Q. For Mr. Wallaert?

22 A. Yes, and other companies.

23 223 Q. And other companies?

24 A. And other companies he may have been involved. I

25 don't know whether he was involved with Italian

26 companies that they lead us to, that we dealt with.

27 224 Q. Yes?

28 A. And German companies and Dutch companies.

29 225 Q. I see. Was it always marketing for clothing

33
 1 companies?

2 A. Well, we were only involved in the clothing. So, I

3 don't know did they market anything else.

4 226 Q. Yes. Did you ever visit Blue Jeans in Guernsey?

5 A. No, no.

6 227 Q. You did not?

7 A. No, I didn't. Not to my recollection, no.

8 228 Q. You would recollect, I think, would you not?

9 A. No, I wouldn't, not that far back. I wouldn't

10 recollect twenty years ago, ten years ago. No, I

11 wouldn't.

12 229 Q. Did you ever visit Guernsey?

13 A. Not to my recollection. We could have had. I am

14 not saying that we did or we didn't. I don't

15 remember ever visiting Guernsey, no.

16 230 Q. Did Mr. Kennedy ever visit Guernsey?

17 A. Not to my knowledge.

18 231 Q. When did your relationship with Guinness & Mahon

19 come to an end?

20 A. It came to an end when the products that were

21 marketed through Blue Jeans became to expensive.

22 232 Q. What products were they?

23 A. Well, I can name you names. Do you want to know the

24 names?

25 233 Q. Did they not do the marketing for all your products?

26 A. They did the marketing for all the products under

27 the guise of Wallaert and that.

28 234 Q. Right?

29 A. But those products, namely the source in Italy,

34
 1 became too expensive.

2 235 Q. Yes?

3 A. The commission we had to pay Blue Jeans along with

4 the price of the garments -- just they were too

5 dear.

6 236 Q. Right yes?

7 A. So, we moved along to another company, which we

8 traded out of Denmark, and we didn't have to pay

9 commission.

10 237 Q. Did you move away from Wallaerts at that time?

11 A. We did, yes.

12 238 Q. I see. You moved away from Wallaert and Blue Jeans?

13 A. Well, once we moved away from Wallaert we moved away

14 from Blue Jeans.

15 239 Q. When did this happen?

16 A. I am not -- dates. They are all the dates like -- I

17 mean to say the last time that we paid would be ten

18 years ago.

19 240 Q. Ten years ago?

20 A. So, approximately. To the best of my knowledge now.

21 241 Q. In the early 1990's?

22 A. Yes, to the best of my knowledge, yes.

23 242 Q. Would it be around 1995?

24 A. We stopped trading with Blue Jeans?

25 243 Q. Yes?

26 A. Well, the last payment is in our accounts. So, I

27 mean to say it is easy enough to check that. The

28 last -- that would be in our accounts, yes.

29 244 Q. Have we got these accounts?

35
 1 A. Well, did you ask for my accounts? You didn't.

2 245 Q. Have you got accounts with Blue Jeans still? I

3 mean have you got copies of your accounts with

4 Blue Jeans?

5 A. Have I got copies of my accounts? I presume my

6 accountant has.

7 246 Q. With Blue Jeans?

8 A. With Blue Jeans?

9 247 Q. Yes?

10 A. Well, would there be payments to Blue Jeans do you

11 mean?

12 248 Q. Any correspondence or accounts or statements?

13 A. You have requested that already, haven't you?

14 249 Q. If I have not I am requesting it now, anything to

15 do with Blue Jeans?

16 A. Okay.

17 250 Q. You have them, have you?

18 A. I don't have anything of that sort.

19 251 Q. Your accountant has?

20 A. He may have.

21 252 Q. I see. When you finished your relationship

22 with Wallaert and with Blue Jeans you then had to

23 close the account which you had opened with

24 Guinness & Mahon. In fact you had two accounts, you

25 had a current account and a resident deposit

26 account, is that not correct, that are referred to

27 in the letter of facility. You had to close those.

28 How did you go about doing that?

29 A. Just didn't apply for a L/C again.

 1 253 Q. There was more than an L/C Mr. Sweeney. You had an

2 account in there, in the bank?

3 A. We had a current account.

4 254 Q. Yes. What did you do to close that?

5 A. Well, they wouldn't renew our L/C. We moved to --

6 we got the facility from the Ulster Bank.

7 255 Q. Yes. However, did you close down your account or

8 is it still there in Guinness & Mahon?

9 A. No, we have nothing in Guinness & Mahon.

10 256 Q. So, you closed down your account?

11 A. I presume so, yes.

12 257 Q. Yes. However, you must remember?

13 A. Closing down an account?

14 258 Q. Yes?

15 A. I don't.

16 259 Q. In a bank that was not your own bank and that you

17 had a quite specific relationship with?

18 A. I didn't. We didn't have that much of a

19 relationship with them. All they did was guarantee

20 our L/C's.

21 260 Q. They gave you large borrowings?

22 A. They didn't give us anything that they weren't

23 covered ten times over for. They didn't give us

24 anything.

25 261 Q. However, you had a quite specific relationship with

26 Guinness & Mahon?

27 A. Well, as close a relationship as you can have with

28 any banker.

29 262 Q. Any way do you recollect closing down your accounts?

37
 1 A. No, I don't, no.

2 263 Q. You do not?

3 A. No.

4 264 Q. We are going to take a break for ten minutes. We

5 will offer you a cup of tea or coffee and we will be

6 back to you then?

7 A. Yes. I would like a cup of tea. Thank you.

8 265 Q. We would ask you to stay here?

9 A. Okay.

10

11 END OF EXAMINATION OF MR. JAMES SWEENEY BY

12 MS. MACKEY:

13

14 SHORT ADJOURNMENT

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

38
 1 MR. JUSTICE COSTELLO: Mr. Sweeney, we will

2 resume our interview then.

3 Mr. Rowan would like to ask you some questions.

5 MR. JAMES SWEENEY WAS EXAMINED AS FOLLOWS BY

6 MR. ROWAN:

8 266 Q. MR. ROWAN: Mr. Sweeney, good morning.

9 A. Good morning.

10 267 Q. I would like to understand a little bit more

11 clearly the mechanism of dealing with Mr. Wallaert.

12 Mr. Wallaert was in Belgium and his company was

13 called Wallaert, was it?

14 A. No, no. His company was called Wallys.

15 268 Q. How do you spell that?

16 A. W-a-l-l-y-s.

17 269 Q. Wallys was...(INTERJECTION)?

18 A. There was a number of Wallys. There was Wallys

19 International UK Limited.

20 270 Q. That was the point. There was a Wallys in Belgium?

21 A. A Wallys in Switzerland; Wallys in Germany; Wallys

22 in Holland; a Wallys in Belgium, head office, and

23 Wallys in Tunisia.

24 271 Q. Right. These companies were all controlled by

25 Mr. Wallaert?

26 A. Yes.

27 272 Q. The Wallys in the United Kingdom, for instance what

28 was its role in the United Kingdom because that was

29 where you were dealing with when you were an agent?

39
 1 A. Correct. What was whose role, Belgium's?

2 273 Q. No. The UK Wallys?

3 A. With me?

4 274 Q. Yes, with you and others?

5 A. Well, I was working -- that is where I was

6 introduced to Wallaert or to Wallys.

7 275 Q. Yes?

8 A. At a show in the UK.

9 276 Q. Yes?

10 A. And I became an agent.

11 277 Q. Yes?

12 A. They supplied the Irish market.

13 278 Q. Yes?

14 A. I sold for them as a commission agent.

15 279 Q. Yes?

16 A. They collected the accounts.

17 280 Q. Yes?

18 A. They supplied the goods and generally speaking from

19 a business point of view, both from my side and

20 their side, it was an unsatisfactory arrangement

21 because payments were slow and sometimes not at all,

22 and the goods being delivered where not 100%

23 delivered. So, therefore, my commission was reduced

24 by the percentage of the goods not delivered. So,

25 it was a situation that had -- I couldn't sustain a

26 livelihood out of it anyhow on 5% commission.

27 281 Q. From your prospective whatever profit was in this

28 transaction of getting the goods from the supplier

29 to the customer in Ireland, too much of the profit

40
 1 was going to Wallys and the commission that you

2 earned was not sufficient. You could not make

3 anything out of it?

4 A. Well, that wasn't the supplier. Wallys UK wasn't

5 the supplier. They were the distributor of Wallys

6 Belgium's jeans in the UK for Ireland and England.

7 I couldn't go direct to Belgium.

8 282 Q. I understand that?

9 A. Yes.

10 283 Q. Alright. We know that Wally UK was a distributor?

11 A. Yes.

12 284 Q. Wallys in Belgium, what was its role if that role

13 was different?

14 A. Manufacturing.

15 285 Q. Wallys in Belgium manufactured?

16 A. Yes, they made everything.

17 286 Q. They made everything?

18 A. Yes.

19 287 Q. All made in Belgium?

20 A. All made in Belgium and Tunisia.

21 288 Q. And in Tunisia?

22 A. Yes.

23 289 Q. Right?

24 A. They dyed, they weaved, they knitted and they sewed

25 and they designed.

26 290 Q. Yes?

27 A. And then the marketing was done through Blue Jeans.

28 291 Q. Yes. When you became unhappy with your agency

29 commission you said to Mr. Cohen, I think you said

41
 1 his name was?

2 A. Cohen, correct, yes.

3 292 Q. Yes. Was he the UK...(INTERJECTION)?

4 A. He is the Managing Director of the UK.

5 293 Q. Of Wallys UK?

6 A. Yes .

7 294 Q. Right. You said to him, "Look, this cannot go on.

8 I need a better deal than this"?

9 A. Well, something to that effect but basically

10 speaking he was unhappy with me perpetually at him.

11 295 Q. Yes?

12 A. He was at the situation where he couldn't supply the

13 goods to me, and I later found out why, but if I

14 ordered 1,000 pieces I might get 750 pieces. So,

15 that meant the cost of selling 1,000 pieces was

16 there. They had been incurred. I wouldn't get the

17 commission on 1,000 pieces because they weren't

18 delivered. You had to pay commission on 750 pieces.

19 So, it was -- I was chasing my tail all the time.

20 So, I continuously gave him a hard time because it

21 wasn't a great idea, I now thought, going out on my

22 own. So, one day he said to me, "Look, Sweeney,"

23 he said, "There is the man that owns this

24 organisation. Go and talk to him. I have had

25 enough of you." So, I went up to this man I didn't

26 know.

27 296 Q. You met him in England?

28 A. He was at the show in England.

29 297 Q. I see?
 1 A. We all had to go over for the shows.

2 298 Q. Yes?

3 A. They paid our fare over.

4 299 Q. Yes?

5 A. And we stood on the stands and looked after the

6 Irish people.

7 300 Q. Yes?

8 A. The Irish customers there.

9 301 Q. I understand, yes. All their agent from around

10 these Islands would have been there at the show?

11 A. Yes .

12 302 Q. And whenever they saw their retail customers coming

13 in?

14 A. At the fair.

15 303 Q. They would have dealt with them?

16 A. At the fair.

17 304 Q. Yes?

18 A. Yes. So, I went up to this fellow, Mr. Wallaert I

19 was told was his name, and I said, "Mr. Wallaert, my

20 name is Sweeney. I sell your goods in Ireland and I

21 am not satisfied with delivery." He said, "I know

22 who you are and I know where you are from. I would

23 like you to deal direct with me." That basically

24 was the start of that. That was his opening

25 conversation and I said, "Mr. Wallaert, I can't

26 deal direct with you, financially I am not capable."

27 So, from there sprung, he said, "Look, we will

28 talk," and so we did talk.

29 305 Q. Because at that stage, of course, you were living

 1 at home?

2 A. Yes.

3 306 Q. And finding it difficult to make ends meet?

4 A. Very much so after being in a salaried position with

5 a car and all that type of stuff.

6 307 Q. Yes?

7 A. Yes.

8 308 Q. Yes. The conversation with him, you said to him,

9 "Look, I can't fund any of this sort of thing"?

10 A. Well, it didn't get...(INTERJECTION).

11 309 Q. Did he say, "Come and see me in Belgium or I will

12 come to Ireland and see you"? What happened then?

13 A. From memory we went to Belgium I think. We went to

14 see him in the factory.

15 310 Q. When you say "we"?

16 A. Myself and Terry Kennedy.

17 311 Q. However, was he also an agent of Wallys?

18 A. No, he was working for me at that stage.

19 312 Q. I see?

20 A. Yes, and I think we went to Belgium. As far as I

21 can recollect we went to Belgium, right?

22 313 Q. Yes?

23 A. And he outlined a programme. He knew the potential

24 of the market from my sales and he knew also the

25 credit risk he was incurring by supplying all these

26 people.

27 314 Q. Because up to that point, of course, the goods had

28 been coming straight through to the retailer in

29 Ireland, is that not right?

44
 1 A. Yes, yes, and they were invoicing and they were

2 trying to collect the money.

3 315 Q. Yes?

4 A. And between bad debts, slow payments.

5 316 Q. Yes?

6 A. Returns they had...(INTERJECTION).

7 317 Q. They had a lot of admin to do?

8 A. Well, a lot of admin and a lot of non-payment for

9 goods.

10 318 Q. Yes?

11 A. And out of sight out of mind and the last guy to be

12 paid was the supplier from the UK.

13 319 Q. Right?

14 A. That invoice went on the bottom of the pile.

15 320 Q. Right?

16 A. So, his proposal was that we deal direct and I

17 become one customer in Ireland, J.B Agencies,

18 instead of 350 over the country. Anything that I

19 bought, he knew what it would cost and he knew my

20 exposure debt wise.

21 321 Q. Yes?

22 A. And he said he would, through this, organise the

23 finance and keep control on my market, and keep an

24 eye on the progress, and if we progressed well and

25 good and he would introduce us to other markets,

26 which he did do.

27 322 Q. I wonder why he did not in the alternative just set

28 up Wallys Ireland?

29 A. Well, that is a question. Well, I suppose I can

 1 hazard a guess.

2 323 Q. Yes?

3 A. Because he closed down Wallys UK nine months later.

4 324 Q. I see?

5 A. Because of discrepancies appearing both in stock and

6 in other -- but I didn't know that at the time.

7 325 Q. Yes?

8 A. So...(INTERJECTION).

9 326 Q. The difference, of course, between J.B Agencies

10 acting as a distributor in Ireland because that is

11 effectively what you then became, rather than an

12 agent you became a distributor?

13 A. Correct.

14 327 Q. Was that you who took over for him all of this

15 administration so he was only dealing with one

16 customer in Ireland, namely yourself?

17 A. Correct.

18 328 Q. The problem being, of course, that you did not have

19 the funds to support this business?

20 A. Correct, yes.

21 329 Q. When it came to the question of financial support

22 how did he deal with that with you, can you remember

23 that?

24 A. Well, basically the orders had to be on the table

25 first like. We sold six months in advance.

26 330 Q. Yes?

27 A. So, we at the moment now would be selling for

28 next spring.

29 331 Q. Yes?

46
 1 A. So, therefore, what would arrive on his table would

2 be orders in the tune of say £500,000/£600,000 worth

3 of goods.

4 332 Q. Yes?

5 A. There is nothing made. There is nothing made up.

6 There is nothing supplied. He would evaluate that

7 and on the basis of that, and the number of accounts

8 involved, he orchestrated the finance through his

9 marketing company.

10 333 Q. Right. Just let me understand the order taking

11 process and I am thinking really now -- it may have

12 changed a little today but go back if you would to

13 the late 1980's and describe how it was you secured

14 the orders?

15 A. You went into a shop with your basket full

16 of...(INTERJECTION).

17 334 Q. You did not go to the show any more?

18 A. We went -- we did go to the shows, yes, yes.

19 335 Q. You would have shown some goods at the show?

20 A. What they would do at the shows would be -- people

21 would look, go around all the suppliers at the

22 shows.

23 336 Q. Yes?

24 A. And sort of check prices...(INTERJECTION).

25 337 Q. Form a view. Yes?

26 A. Check colours.

27 338 Q. Yes?

28 A. Check materials, check fabrics.

29 339 Q. Yes?
 1 A. And if at the end of that period of discovery they

2 still wanted to see you they would said, "Call," or

3 as we got a bit more sophisticated they now called

4 to us in our showrooms in Capel Street.

5 340 Q. I see?

6 A. Because we have different showrooms for the

7 different products we carried.

8 341 Q. However, your sales team would have gone around the

9 various retailers?

10 A. Retailers.

11 342 Q. And, of course...(INTERJECTION)?

12 A. Well, there wasn't a sales team it was myself and

13 Terry, that was it.

14 343 Q. I see. Right. However, ten or twenty years ago, of

15 course, there were many more independent retailers?

16 A. Yes, yes, there were.

17 344 Q. Is that not right?

18 A. That is correct.

19 345 Q. There had been a big change?

20 A. Yes, yes, all dwindling out.

21 346 Q. In the whole clothing distributing scene?

22 A. Yes.

23 347 Q. Much more direct now the big boys direct from

24 the manufacture?

25 A. Correct, yes, yes.

26 348 Q. Okay. In a sense you would have shown the samples

27 to individual retailers, the owner of the retail

28 shop?

29 A. Yes.

48
 1 349 Q. Or the buyer if there was a different person?

2 A. Right, right.

3 350 Q. Those samples came from Wallys in Belgium?

4 A. Yes.

5 351 Q. They sent you the goods, the sample goods?

6 A. Yes, the sample range, yes.

7 352 Q. Yes. Did you have any input into that sample range?

8 A. To a degree. To a degree say for argument sake this

9 make and style. Like there were some outlandish

10 colours that I would say they wouldn't sell in

11 Ireland.

12 353 Q. Yes?

13 A. "That fabric probably wouldn't sell in Ireland," and

14 to that degree but he was very much his own man

15 like. He was dealing with a very large number of

16 markets and ours would have been a very small one.

17 354 Q. Alright?

18 A. So, if we didn't get what was suitable for the other

19 markets he would particularly at that stage make

20 something specific for us.

21 355 Q. Yes, I see. You had a say, "Well, I don't like that

22 but I like this."

23 A. Yes.

24 356 Q. "So, we will have these number of garments over

25 these colours"?

26 A. Yes.

27 357 Q. "And these sizes"?

28 A. Yes.

29 358 Q. You would send those orders all off once you had

49
 1 done your selling?

2 A. Seven or eight weeks around the country.

3 359 Q. Yes?

4 A. You would collate the orders and send him a main

5 order.

6 360 Q. Okay. He would look at that and he would say, "That

7 is worth a quarter of a million pounds"?

8 A. Yes.

9 361 Q. What happened then?

10 A. Well, that if -- then if he approved to

11 accept that order the guarantee was placed with

12 Guinness & Mahon.

13 362 Q. He accepted your quarter of a million pound order

14 across all those styles?

15 A. Yes, one of the companies, whichever one it was,

16 yes.

17 363 Q. Yes. At that point, of course, they were either

18 being made in Belgium or in Tunisia?

19 A. Yes, and also they could have been Italian gear.

20 They could have been -- there was other companies

21 involved.

22 364 Q. That he owned?

23 A. Well, I don't know whether he owned them or not but

24 they were going through the marketing company.

25 365 Q. Yes, I see. He was sourcing goods?

26 A. Well, the market... (INTERJECTION) .

27 366 Q. In other places?

28 A. Yes, yes, yes, yes.

29 367 Q. Did he source goods, for instance, in the Far East

50
 1 at any stage?

2 A. I don't know. I don't know whether he made there or

3 not. I don't know.

4 368 Q. Yes?

5 A. But when you say "sourced goods" he did his own

6 manufacturing but he might have fabrics he might

7 have brought, but he had his own weaving mills as

8 well.

9 369 Q. However, you will know that increasingly it has

10 become too expensive to manufacture garments in

11 Western Europe?

12 A. That is why he is closed. He is closed. He

13 is gone.

14 370 Q. Yes. Things moved down to Portugal for instance?

15 A. China.

16 371 Q. And to China?

17 A. Yes.

18 372 Q. And to Hong Kong?

19 A. Yes.

20 373 Q. And to Taiwan and so on?

21 A. Yes.

22 374 Q. And then to other countries, Korea, and so on?

23 A. Yes.

24 375 Q. Effectively Mr. Sweeney the orders were placed with

25 Wallys in Belgium and he sourced the goods?

26 A. Yes.

27 376 Q. Okay. The goods, when they came in, would have come

28 directly from where they were manufactured into your

29 warehouse?

51
 1 A. Yes.

2 377 Q. They would not have come via Belgium, would they?

3 A. They could have had.

4 378 Q. Yes?

5 A. Well, at that time we were in the EU.

6 379 Q. Yes?

7 A. And we had to pay duty on the stuff coming in

8 from Belgium.

9 380 Q. Yes?

10 A. Yes, they would have come in from Belgium.

11 381 Q. Would they?

12 A. Yes.

13 382 Q. Alright. They would come into you and then you

14 would have distributed them out?

15 A. Break them down and distribute them out.

16 383 Q. Okay. However, going back to the order process,

17 whenever he accepted your big order he then said to

18 you, "Go and see Guinness & Mahon and get them to

19 raise a Letter of Credit"?

20 A. No, no. The Letter of Credit facility was made

21 available through Guinness & Mahon. We had no

22 input into the opening of the Letter of Credit.

23 384 Q. He instructed the Letter of Credit?

24 A. But it was instructed through Blue Jeans the

25 marketing company.

26 385 Q. Yes. I just want to understand, the instruction

27 came from Mr. Wallaert?

28 A. Well, yes. If he didn't approve of that order you

29 could forget it like. Blue Jeans couldn't just

52
 1 initiate a carte blanche L/C for us.

2 386 Q. Just to be a little careful, was it Mr. Wallaert or

3 one of his managers who rang, or sent a letter, or a

4 telex, or whatever, to Guinness & Mahon and said,

5 "Please issue a Letter of Credit on behalf of J.B

6 Agencies"?

7 A. The internal workings of that I am not quite sure on

8 like. My interest was, as you can imagine, getting

9 the orders and getting L/C approval. The mechanism

10 of how that worked really was of no concern to me.

11 I encouraged...(INTERJECTION).

12 387 Q. However, you needed to know it was happening?

13 A. I needed to know that it had happened.

14 388 Q. Yes?

15 A. Not it was happening.

16 389 Q. Yes, and if there was a screw up...(INTERJECTION)?

17 A. It had happened.

18 390 Q. Yes. If there was a screw up you rang somebody?

19 A. I rang Wallaert.

20 391 Q. You rang Wallaert?

21 A. Yes.

22 392 Q. In Belgium?

23 A. Yes.

24 393 Q. Right, and said, "Look...(INTERJECTION)?

25 A. "What is happening my L/C?"

26 394 Q. Yes, fine. When the L/C was issued on behalf of

27 J.B Agencies did there have to be any sort of

28 administration back and forward between J.B and

29 Guinness & Mahon? Did you have to sign things or

53
 1 anything of that sort?

2 A. For payments going out of the Country we had to sign

3 some documents. I don't know what they were we had

4 to sign.

5 395 Q. You would drop into Guinness and Mahon every so

6 often, would you?

7 A. No, no. No, we wouldn't. The documents would

8 appear down in Capel Street.

9 396 Q. Right. They would send them down?

10 A. Yes, we signed them.

11 397 Q. You would sign them and send them back?

12 A. Yes, we were selling like. I mean to say we were on

13 the road selling the goods.

14 398 Q. Yes?

15 A. That is it like. Administration is irrelevant

16 really.

17 399 Q. Yes?

18 A. Sales and payments.

19 400 Q. A necessary evil?

20 A. Yes, well, yes.

21 401 Q. In essence, therefore, the Letter of Credit was

22 raised in the name of J.B Agencies?

23 A. Yes.

24 402 Q. And that was sent, the Letter of Credit, where?

25 A. It was opened in favour of whoever we brought from.

26 403 Q. That was?

27 A. Wallys.

28 404 Q. Wallys?

29 A. Or it could be Pop 84 or it could be Panmem. It

54
 1 could be, who is the other crowd, Stratos. It could

2 be -- these were all companies that we dealt with.

3 405 Q. Yes. However, you said to me, I think a little

4 earlier in this part of our interview, that the bulk

5 of the goods were manufactured either in Belgium or

6 in Tunisia by companies which Wallys owned?

7 A. With companies that he was associated with, yes.

8 406 Q. Yes?

9 A. Well, as far as I am concerned he owned them, yes.

10 407 Q. Alright. Then looking at the mechanism,

11 Guinness & Mahon were asked to raise a

12 Letter of Credit?

13 A. Yes.

14 408 Q. Which they sent to Wallys if the goods were coming

15 from Wallys?

16 A. Yes, yes.

17 409 Q. The Letter of Credit was in favour of?

18 A. Whatever company the goods were coming from.

19 410 Q. Absolutely?

20 A. Yes.

21 411 Q. Meanwhile Wallys instructed Blue Jeans to guarantee

22 that Letter of Credit?

23 A. Yes.

24 412 Q. Is that right?

25 A. Well, that is the mechanism as I understand it, yes.

26 413 Q. Why would they do that? I mean is that not a very

27 circular thing, raising expense all the way around?

28 Why did you not deal directly with Wallys without

29 the need for a Letter of Credit?

55
 1 A. That is... (INTERJECTION) .

2 414 Q. Because they knew your customers, they knew whether

3 you had a sporting chance of getting paid because

4 you told them who they were. Why would they have

5 gone through this unnecessary loop of Blue Jeans in

6 Guernsey?

7 A. Well, if you are trying to ask me a question that

8 really should be addressed to Mr. Wallaert I will

9 try and answer it on his behalf but my answer

10 first of all is I don't know.

11 415 Q. Yes?

12 A. I can't think for Mr. Wallaert nor can I answer

13 for him but...(INTERJECTION).

14 416 Q. Yes. I am looking for a bit of a surmise because

15 it is a clumsy way of doing things when you

16 think about it?

17 A. Well, we are still doing it with companies we are

18 buying from in Holland and we are paying -- no, we

19 are buying in Germany and we are paying commission

20 to a marketing company in Holland, who

21 said...(INTERJECTION).

22 417 Q. However, they will not be guaranteeing payment to

23 your bankers?

24 A. No, they weren't, no.

25 418 Q. You see that is the essential difference in all of

26 this. That is the strange element of it, as it

27 seems to me at least?

28 A. Well, that is a strength element, I suppose, that

29 Mr. Wallaert made me a distributor overnight from

56
 1 a 5% commission agent and I had never met him.

2 419 Q. He was hoping to make a profit out of it?

3 A. Yes .

4 420 Q. I mean that is fair enough?

5 A. Well, he was making a profit out of Blue Jeans as

6 well.

7 421 Q. Alright?

8 A. If you like every garment that I sold they were

9 getting commission on and the principals were still

10 invoicing us with the cost of the goods. So, every

11 garment that they guaranteed us on they got

12 commission to Guernsey and Belgium was paid for the

13 garment. So, it is not that very strange at all.

14 422 Q. Alright. Let us explore then the role of Blue Jeans

15 because you explained that Blue Jeans was providing

16 a marketing service?

17 A. Yes .

18 423 Q. This word "marketing" can mean a whole lot of

19 different things?

20 A. Yes, right.

21 424 Q. Can you describe the services, describe them as

22 precisely as you can, that you believed Blue Jeans

23 provided J.B Agencies in the 1980's? What services

24 did they provide?

25 A. Well, to the best of my recollection we started

26 trade fairs here when I think the Futura Fair opened

27 up. I think we were told we would show. To my

28 recollection, "Could we afford to show?" They said,

29 "We will show".

 1 425 Q. Yes?

2 A. They did some advertising.

3 426 Q. Yes?

4 A. We had an add in the cinema.

5 427 Q. Yes?

6 A. They sent us a loop and they paid for cinema time.

7 428 Q. Yes?

8 A. Bags, in-store display units, and generally speaking

9 kept an eye on our sales to see that we were meeting

10 target expectations. Wallys did the manufacturing.

11 They did the marketing. That is as I understand the

12 marketing end to be.

13 429 Q. Okay. When there was a decision to have a show here

14 which company issued the instruction to the show

15 organizers for instance in respect of paying for the

16 stand?

17 A. J.B.

18 430 Q. Right. You incurred all of these costs?

19 A. Well, I incurred them provided they were going to

20 help me along the way.

21 431 Q. Of course, yes?

22 A. Yes.

23 432 Q. I mean you would have discussed it beforehand?

24 A. Yes, yes.

25 433 Q. And decided what you were going to do?

26 A. Yes.

27 434 Q. However, you went out and did it?

28 A. Yes, yes.

29 435 Q. You accumulated all of these costs once you paid

58
 1 them. How did you get paid by Blue Jeans for those?

2 A. Blue Jeans could have sent me a cheque or else I

3 would -- they would -- I would issue a credit note

4 to Wallaert.

5 436 Q. Yes?

6 A. Or some form of transaction anyhow. I wasn't -- I

7 didn't lose out on it anyhow. He recovered the

8 costs or credit notes or something similar

9 like that.

10 437 Q. Alright. It could easily have been either I

11 suppose, you issue a cheque or may be a credit note?

12 A. Yes, yes, yes.

13 438 Q. Because when you sold the goods, or was it before

14 you sold the goods that, you paid a per item

15 commission?

16 A. No, no. When we sold. I think the invoices were

17 raised on us when they were supplied, when the goods

18 were supplied, and we invoiced out the goods.

19 439 Q. When you invoiced out the goods?

20 A. Yes.

21 440 Q. However, before you had been paid for them?

22 A. Yes, yes, but, of course, we didn't pay for them

23 either until we got paid for them.

24 441 Q. Yes. The suppliers invoice, did that come from the

25 individual companies or did it come from Blue Jeans?

26 A. It came from the individual companies. It was a

27 Blue Jeans invoice, their own commission invoices.

28 442 Q. Blue Jeans were aware that those suppliers invoices

29 had been issued?

59
 1 A. Very much so, yes. They knew...(INTERJECTION).

2 443 Q. And at that...(INTERJECTION)?

3 A. They knew, Blue Jeans, exactly the quantity of goods

4 we got.

5 444 Q. Yes?

6 A. And how we distributed or broke them down was

7 irrelevant.

8 445 Q. Yes?

9 A. We could break them down in 150 over 500 accounts.

10 446 Q. Yes?

11 A. But at the end of the day it still amounted to

12 X amount of garments.

13 447 Q. Okay?

14 A. And once that tallied at the end of the year and the

15 commission, or the royalties, owed on that were

16 agreed.

17 448 Q. Yes?

18 A. They weren't that fussy now over credit limits or

19 things like that.

20 449 Q. Yes. Blue Jeans issued a commission invoice to you?

21 A. Yes.

22 450 Q. Of how much?

23 A. It was... (INTERJECTION) .

24 451 Q. Give a percentage?

25 A. It wasn't a percentage. It was a charge per

26 garment. It was between 0.75p and £1 a garment.

27 452 Q. Would that have been approximately a number of

28 per cent?

29 A. It would. It could have been around 10/12% or may

60
 1 be 15%.

2 453 Q. That was in addition to the cost...(INTERJECTION)?

3 A. To the cost of the goods.

4 454 Q. Of the garment?

5 A. Yes.

6 455 Q. Okay. The effect of this was that Blue Jeans got

7 this 10% or 15% per cent per garment charge and

8 against that they picked up some of the cost of

9 this marketing?

10 A. Marketing, yes.

11 456 Q. Alright. Point of sale materials?

12 A. End of store, yes.

13 457 Q. Yes?

14 A. Point of sale material, yes.

15 458 Q. Shows?

16 A. Yes.

17 459 Q. Advertising?

18 A. Yes.

19 460 Q. Newspaper advertising, TV advertising?

20 A. No, no. Not TV, no, no. That was too expensive.

21 They did occasionally take a sheet in a paper for a

22 local retailer who had done up a store or something.

23 461 Q. Yes?

24 A. And, "Congratulates to Joe O'Brien of Edenderry," or

25 something like that, you know.

26 462 Q. Yes?

27 A. "Compliments of J.B Agencies," and we would do

28 these, a number of these, and they would approve a

29 percentage of them.

61
 1 463 Q. Every so often there would be the income they were

2 deriving from these charges and the expenses that

3 you had created as a result of the marketing costs?

4 A. Well, the expenses weren't huge. They didn't --

5 they weren't that carte blanche now, I mean to say,

6 with their marketing end but they did help but it

7 was expensive.

8 464 Q. Right. You were dealing all the time, am I right,

9 with Guernsey and Blue Jeans?

10 A. That was were Blue Jeans was stationed, yes.

11 465 Q. Yes, and...(INTERJECTION)?

12 A. We didn't deal as such. As I said like my dealings

13 would be with mostly the manufacturing side of the

14 business, where the goods came from. This was

15 payment. There was no dealings. They just told you

16 that was the bill and you paid it.

17 466 Q. Mr. Wallaert had created this somewhat unusual beast

18 in Blue Jeans?

19 A. To my knowledge, yes.

20 467 Q. Which was stuck in the middle of all of this?

21 A. Yes.

22 468 Q. Adding to the cost of the garment?

23 A. Adding to my cost before that.

24 469 Q. Yes?

25 A. But I still netted 20% vis-a-vis 5% as an agent.

26 Quite a total difference.

27 470 Q. Yes?

28 A. And I was guaranteed the difference.

29 471 Q. However, in effect you were doing all the work for

62
 1 Blue Jeans, were you not?

2 A. I was doing all the work anyhow, not for Wallaert.

3 I was doing all the work anyhow and getting 5% of

4 what was delivered.

5 472 Q. Yes.

6 A. And Wallaert delivered all my goods.

7 473 Q. Yes?

8 A. I got a 100% deliveries.

9 474 Q. Yes?

10 A. So, therefore the work, the effort in selling,

11 justified the return.

12 475 Q. Yes?

13 A. I was doing the same for the UK and I was getting

14 75/65% of my deliveries.

15 476 Q. Blue Jeans, of course, were also providing this

16 rather crucial facility of guaranteeing the Letter

17 of Credit?

18 A. Very much so. Without that we couldn't have

19 functioned. We would still be an agent and out of

20 business.

21 477 Q. Right. Mr. Wallaert had effective control of

22 Blue Jeans?

23 A. To my knowledge -- that I can't swear but it

24 seemed to be that when he nodded they bounced.

25 478 Q. You talked to him a great deal?

26 A. Yes.

27 479 Q. And they did things?

28 A. Yes.

29 480 Q. He must have had some influence over all of it?

63
 1 A. That is what I said to you, to my knowledge he must

2 have had, yes, but it wasn't a thing he would

3 discuss with me.

4 4 31
i Q. Eventually you said that in the early 1990's this

5 arrangement became uneconomic?

6 A. Yes .

7 482 Q. Can you just outline a little bit more about that?

8 A. Well, as you just yourself said the cost of garments

9 in Europe went up astronomically and we couldn't

10 justify retailing them. I couldn't sell them. So,

11 we had to either close down or look for another

12 market, another source, another supplier and we came

13 across one in Cologne, who was sourcing stuff from

14 China. So, we moved out of goods out of Europe

15 basically to goods sourced in China through a

16 company through Denmark, who we are dealing with

17 today.

18 483 Q. However, by that stage, of course, J.B Agencies had

19 become established as a business?

20 A. It was. We had been dealing in the retail for

21 25 years, yes.

22 4 34
i Q. Yes?

23 A. Yes .

24 4 35
i Q. Obviously, you had built up some financial strength

25 at that stage?

26 A. Well, yes. Some strength, yes.

27 4 36
i Q. Sufficient to allow you to not require the guarantee

28 for the Letter of Credit because that was no longer

29 something, you said, was available?

64
 1 A. Yes. Well, it was available but no matter -- you

2 could have all the guarantees in the world if the

3 garments were too dear.

4 487 Q. Yes. I think what you are trying to distinguish is

5 not so much about the garments, what I am trying to

6 say is that once you stopped dealing with Wallys and

7 Mr. Wallaert then the facility to have the guarantee

8 for the Letter of Credit, which Blue Jeans provided,

9 that was gone?

10 A. Well, we have a trading relationship now with our

11 bank so we had a cash flow that was reliable.

12 488 Q. Yes?

13 A. And we opened L/C's direct with our suppliers.

14 489 Q. Yes?

15 A. And other facilities that are out of Ireland, we do

16 business on that basis now.

17 490 Q. When you finished with Wallys and Mr. Wallaert you

18 then had no need for Guinness & Mahon's services?

19 A. We never needed Guinness & Mahon at any stage.

20 Guinness & Mahon was -- we were -- was part and

21 parcel of the Blue Jeans set up. We were dealing

22 with the Northern Bank and the Ulster Bank. They

23 wouldn't give us the funds. I need, yes -- we did

24 not require them.

25 491 Q. However, you might have continued to deal with

26 Guinness & Mahon. I mean they provided the Letter

27 of Credit. They knew you and all of that?

28 A. Well, we didn't start our business with them. We

29 were trading all along with the Ulster Bank and we

65
 1 were quite happy with them and they made the

2 facilities available to us.

3 492 Q. Yes, of course. The relationship

4 between...(INTERJECTION)?

5 A. It wasn't really a relationship with

6 Guinness & Mahon. I mean we didn't see the guys.

7 We didn't -- we would go in on our bended knees to

8 see if our L/C facility was available and if it was

9 available they were lovely chaps and if it wasn't we

10 were out of business. It was a simple as that.

11 493 Q. Yes. I suppose that the relationship would have

12 improved over the years as you became more

13 established?

14 A. Not really, not really. The relationship was in

15 Ulster Bank, who saw our cash flow, our monies in,

16 our monies out, our monies over to Guinness & Mahon

17 to pay them. They saw that we were trading

18 reasonably well and weren't, you know -- we were

19 running the company reasonably well. That is where

20 we built a relationship.

21 4 94 Q. However, Guinness & Mahon did give you advice about

22 your business?

23 A. Not that I am aware of.

24 495 Q. A little earlier I think we passed over to you a

25 letter and perhaps we can pass page 26 over again.

26 This was the letter that you had a little

27 difficulty recalling having this meeting of

28 around January 1984 (Exhibit 6)?

29 A. Yes.

66
 1 496 Q. Where you are writing to Mr. M. Keane of

2 Guinness & Mahon and you are saying, "Dear Martin."

3 You obviously knew him well enough to call him by

4 his first name?

5 A. Well, obviously.

6 497 Q. Yes.

7 "Many thanks to your self and Barry..."

9 Who is Barry

10 A. I do not know.

11 498 Q.

12 "...for the informative meeting."

13

14 In other words he provided you with some valuable

15 information?

16 A. Well...(INTERJECTION).

17 499 Q. Would you agree with that? I mean that is what you

18 are saying in the letter?

19 A. Alright, I will have to agree with what I say in the

20 letter, yes.

21 500 Q.

22 "The following points were well

received..."
23

24 He offered you some guidance?

25 A. Yes, alright, yes.

26 501 Q.

27 "...and we will implement same as soon

as possible."
28

29 He was acting as an adviser and you were prepared to

67
 1 take his advice?

2 A. Yes.

3 502 Q. These were people that you did not know very well

4 Mr. Sweeney?

5 A. Yes.

6 503 Q. I mean that seems to contradict a little your

7 observation that you really did not have a

8 relationship with them?

9 A. Well, I don't know how you term a relationship with

10 a bank. We were conforming to what they required.

11 504 Q. You were taking advice from them?

12 A. Yes. So, that is what they told us to do so we did

13 it.

14 505 Q. However, Ulster Bank would not tell you to do that.

15 Let us look at what they are saying:

16 "1. Increase Directors salaries for

the last year to £10,000 per annum and
17 enter into accounts."

18

19 A. Yes.

20 506 Q. This was a suggestion of a retrospective change to

21 your accounts. This is pretty hairy advice. Why

22 would they be saying that to you when you did not

23 have a relationship with them?

24 A. Well, it depends on what you term as a relationship.

25 Your term of relationship and mine obviously are

26 different. I listened...(INTERJECTION).

27 507 Q. You described...(INTERJECTION)?

28 A. I listened to advice. They obviously told me to do

29 this and I did it.

68
 1 508 Q. Did you ask...(INTERJECTION)?

2 A. If that is a relationship...(INTERJECTION).

3 509 Q. Did you ask for this advice?

4 A. No.

5 510 Q. They volunteered it?

6 A. Well, they obviously told us at a meeting. That is

7 what it says there.

8 511 Q. Yes. I am afraid Mr. Sweeney I feel that your

9 comments about this letter are not as clear as they

10 might be. I mean this letter I hope has helped to

11 refresh your mind. I mean I would like to

12 understand what prompted this sort of meeting?

13 A. What prompted this sort of meeting? I don't

14 honestly know.

15 512 Q. Did you request the meeting?

16 A. I don't know. Maybe they wouldn't give us the L/C

17 on the basis of our salaries. Maybe it is to do

18 with that.

19 513 Q. Let us go on down this letter then. They have told

20 you to increase the Directors salaries for last

21 year?

22 A. Yes.

23 514 Q. They said secondly:

24 "Increase Directors salaries for this

year"?
25

26 A. Yes.

27 515 Q.

28 "On our projected cash flow

forecast..."
29

69
 1 In other words you took along to him some

2 projections?

3 A. Obviously, what he required, yes.

4 516 Q. Yes.

5 "... it was your opinion that we

required no more than a Letter of
6 Credit facility for £150,000."

8 He said, "You have got some funds in the business

9 which would allow you to meet some of these bills"?

10 A. Bills, yes.

11 517 Q. Without the need for a Letter of Credit facility?

12 A. Yes.

13 518 Q. In other words you were sitting with funds on

14 credit. That is what that means, would you agree?

15 A. Well, I would take -- I don't honestly know. I

16 presume so. I don't know.

17 519 Q. He was getting your accounts?

18 A. Of course he was getting our accounts. Sure they

19 had a lien on our accounts.

20 520 Q. Who did?

21 A. Guinness & Mahon.

22 521 Q. Did Ulster Bank have a lien on your accounts?

23 A. No, Guinness & Mahon had.

24 522 Q. However, not Ulster Bank?

25 A. It was they who were giving us the L/C.

26 523 Q. However, the L/C was being guaranteed by Blue Jeans?

27 A. Well, they also had a lien on our accounts.

28 524 Q. Who did?

29 A. Guinness & Mahon, plus the guarantee. So far as I

70
 1 recollect with that guarantee they still had a lien

2 on our accounts. He...(INTERJECTION).

3 525 Q. Sorry to interrupt you. What exactly is a lien?

4 A. Well, that is...(INTERJECTION).

5 526 Q. In your mind?

6 A. In my mind?

7 527 Q. Yes?

8 A. Well, they saw our A list of debtors and we were

9 owed say -- for argument sake if we borrowed

10 £150,000 we were owed £200,000.

11 528 Q. Yes?

12 A. They would regard themselves as a preferential

13 creditor.

14 529 Q. How come?

15 A. I don't know how come but that is -- we sign over

16 our debts to them.

17 530 Q. You signed over your debts. Was this some sort of

18 invoicing?

19 A. Our -- yes, our debtors, yes.

20 531 Q. I.e. the money...(INTERJECTION)?

21 A. It was a form of a guarantee.

22 532 Q. The money you were expecting to come?

23 A. Yes.

24 533 Q. From your customers?

25 A. Yes, yes.

26 534 Q. You signed these over to Guinness & Mahon, a formal

27 document?

28 A. Well, that is to my knowledge, yes, yes.

29 535 Q. You did not actually...(INTERJECTION)?

71
 1 A. I didn't go into these things in as intricately as

2 that now to be honest with you.

3 536 Q. No, no. I am not trying to confuse you. I am

4 merely trying to understand the relationship?

5 A. But Guinness & Mahon had more security than the

6 Bank of England to give us a loan of that L/C, both

7 from Blue Jeans and from us.

8 537 Q. Yes?

9 A. Plus insurance policies, plus personal guarantees,

10 plus a lien on our debts.

11 538 Q. And you had no relationship with them?

12 A. No. So, therefore, why would they have a

13 relationship with us when I was tied up in a little

14 ball that you couldn't move if anything went wrong?

15 539 Q. I just find it...(INTERJECTION)?

16 A. Do you call that a relationship? I would not. I

17 would call that prison.

18 540 Q. A relationship is something where there is no

19 arrangements of that sort between the parties, where

20 merely you are using them to provide a facility.

21 They do that at the behest of someone else because

22 that is where all of this discussion started. You

23 said that Blue Jeans had the relationship with

24 Guinness & Mahon. Now you are telling us that, in

25 fact, they had some sort of invoice discounting

26 arrangement or some sort of rights over your

27 customer debts, that they...(INTERJECTION)?

28 A. Who had, Guinness & Mahon?

29 541 Q. That you showed them your projections, your cash

72
 1 projections?

2 A. Yes.

3 542 Q. That they saw your accounts?

4 A. Yes.

5 543 Q. Right. I mean that is a different sort of set of

6 ideas from "we had no relationship with them"?

7 A. Is this over the word relationship?

8 544 Q. You tell me what you would call it?

9 A. I would call it a business transaction.

10 545 Q. A business transaction?

11 A. Yes.

12 546 Q. Alright?

13 A. Not a relationship of any sort at all.

14 547 Q. Okay.

15 "Dear Martin"?

16

17 A. Necessity.

18 548 Q. Right. Okay. Going on to point number 4 in this

19 letter:

20 "Your advice on over trading and also

your comments on the effects of being
21 granted a greater L/C facility than our
needs have been noted and absorbed"?
22

23 A. We told...(INTERJECTION).

24 549 Q. They were telling you that you were selling too

25 much?

26 A. Yes.

27 550 Q. You were trading ...(INTERJECTION)?

28 A. We weren't running our company properly, yes.

29 551 Q. That is right?

73
 1 A. Yes. I needed that advice from him.

2 552 Q. Did you?

3 A. Yes.

4 553 Q. Not from your accountants?

5 A. My accountants weren't giving me the money, he was.

6 554 Q. Absolutely?

7 A. So, therefore, he decided to tell us how to run our

8 business.

9 555 Q. Technically...(INTERJECTION)?

10 A. Wallaert wouldn't have made that remark. He

11 wouldn't have been so bold.

12 556 Q. Then point number five:

13 "We will arrange to have funds

transferred from our Northern Bank
14 account to our deposit account in
Guinness & Mahon from time to time"?
15

16 What was he asking you to do there?

17 A. To pay for our L/C. To pay. That is basically to

18 pay for our L/C.

19 557 Q. Yes. He had some sort of a right over your customer

20 debtors ledger, the amounts that you would get in

21 from your customers?

22 A. That is if we defaulted in payment to him.

23 558 Q. However, they would have been put into your

24 Northern Bank account, would they not, your

25 customers...(INTERJECTION)?

26 A. In the event of default, yes, yes.

27 559 Q. In the ordinary course you would lodge those into

28 your Northern Bank account?

29 A. All things, yes, yes.

74
 1 560 Q. However, despite this Guinness & Mahon could claw

2 back some of that money?

3 A. From Northern Bank?

4 561 Q. I do not know?

5 A. No, they couldn't unless we instructed the Bank to

6 pay them but failing that, whatever lien on our

7 debts meant, they still had a guarantee from

8 Blue Jeans, and failing that they still had personal

9 guarantees, and failing that if we dropped dead they

10 had insurance policies. So, I mean to say they

11 weren't going to be out of pocket and then they

12 still turn around and tell you how to run your

13 business.

14 562 Q. Yes. I mean essentially...(INTERJECTION)?

15 A. That is a relationship?

16 563 Q. It is a business arrangement?

17 A. Yes, that is what I call it.

18 564 Q. Yes?

19 A. Very one-sided.

20 565 Q. Yes. How often would you have had meetings with

21 Mr. Keane?

22 A. As little as possible.

23 566 Q. Would it have been once a year?

24 A. Maybe, maybe.

25 567 Q. Twice a year?

26 A. Possibly.

27 568 Q. Every quarter?

28 A. No, no, no, no. Once a year maybe if he decided

29 like. Some of this information would be sent down

75
 1 so we didn't have to see him.

2 569 Q. Yes?

3 A. Or if it was him or whoever that other fellow

4 Barry is.

5 570 Q. Clearly there was a meeting here, was there not?

6 A. Yes, there must have been, yes, yes.

7 571 Q. And...(INTERJECTION)?

8 A. I am not denying that, no.

9 572 Q. No, no. You also said to me earlier that you showed

10 him your list of orders because that was the way he

11 became comfortable?

12 A. No, Wallaerts, Wallys. Wallys would see the orders.

13 573 Q. I thought you said that Mr. Keane saw the orders?

14 A. Did I say that?

15 574 Q. I thought you did when we were talking about the

16 cash flow. Did Mr. Keane see the orders?

17 A. Well, I mean to say he may have. He could have

18 seen the orders but I mean to say there is

19 no...(INTERJECTION).

20 575 Q. Please Mr. Sweeney?

21 A. Okay.

22 576 Q. Did he see the orders or did he not?

23 A. I am not quite sure. I am sorry. I am not trying

24 to be evasive. He could have seen the orders but

25 seen the orders like, "So there is £50,000 worth of

26 orders," I am not quite sure.

27 577 Q. Did Mr. Keane have any connection with Blue Jeans?

28 A. I am not quite sure. I don't think so. Not to my

29 knowledge anyhow. He could have had but I don't

76
 1 think so.

2 578 Q. Did Mr. Keane have communications with Blue Jeans?

3 A. I don't know that.

4 579 Q. However, Guinness & Mahon had communications with

5 Blue Jeans because Blue Jeans were guaranteeing the

6 Letter of Credit?

7 A. Correct.

8 580 Q. I rather assumed your answer to that would have

9 been, "yes"?

10 A. Well, I don't know what communication between

11 Guinness & Mahon and Blue Jeans took place. All I

12 wanted to know was my L/C facility was available.

13 That is my only interest in Guinness & Mahon.

14 581 Q. Just one final point. We asked you could you obtain

15 some more information on the, page 27 Mary, your

16 statement which you provided (Exhibit 5)?

17 A. Yes.

18 582 Q. As you can see?

19 A. Yes, yes.

20 583 Q. It turns out to be half a statement?

21 A. Yes.

22 584 Q. What do you think the balance on that statement

23 (Exhibit 5) might have been?

24 A. I haven't the foggiest notion.

25 585 Q. I mean...(INTERJECTION)?

26 A. 1984, February?

27 586 Q. Yes. I suppose I should ask it in a more general

28 way. What level of deposit did you maintain with

29 Guinness & Mahon?

77
 1 A. To my knowledge to kept -- pay off our

2 Letter of Credit.

3 587 Q. Yes?

4 A. From time to time we transferred money from our

5 bank.

6 588 Q. Yes?

7 A. To pay off our L/C's.

8 589 Q. L/C's would have had a date on them when they had to

9 be met, would they not?

10 A. Yes, yes.

11 590 Q. You would have transferred the money into your

12 account in Guinness & Mahon just before the L/C had

13 to be met?

14 A. Not necessarily so. We could go over that date

15 provided -- or we could pay before that date or like

16 -- they weren't that strict, I don't think so

17 anyhow.

18 591 Q. Did you borrow money from them from time to time?

19 A. We borrowed -- no, we didn't. We got L/C's from

20 them.

21 592 Q. Right. When you had to pay the Letter of Credit,

22 out of which of your Banks did you pay it?

23 A. The bank we were with. Northern Bank was one and

24 then we changed to the Ulster Bank.

25 593 Q. Why did you keep any deposit monies with

26 Guinness & Mahon in that case?

27 A. I wasn't aware we had deposited money with

28 Guinness & Mahon.

29 594 Q. Surely that is what this statement (Exhibit 5), the

78
 1 bit of it that we can read, says, that you had an

2 Irish pound resident call, "D/A" means, deposit

3 account. It says J.B Agencies so you had money on

4 deposit with them?

5 A. Well, may be it was to pay off the L/C.

6 595 Q. However, you said to me that the L/C's were paid by

7 your main Bank, either the Northern or the Ulster?

8 A. Well, it says here (Exhibit 2):

9 "We will arrange to have funds

transferred from our Northern Bank
10 account to our deposit account in
Guinness & Mahon."
11

12 And that was to pay off the L/C's.

13 596 Q. Guinness & Mahon paid the L/C's?

14 A. Of course they did.

15 597 Q. I am sorry. I thought a moment ago you said to me

16 that Northern Bank paid the L/C's?

17 A. We paid Guinness & Mahon for the L/C's and they paid

18 Blue Jeans.

19 598 Q. Guinness & Mahon paid Blue Jeans?

20 A. Yes .

21 599 Q. Right?

22 A. No, paid Wallaert. Wallaert, sorry. I might be

23 getting all mixed up here. Blue Jeans guaranteed my

24 borrowings. The money was owed to Wallaert.

25 600 Q. Yes?

26 A. Or to one of the companies, right?

27 601 Q. Yes?

28 A. They were paid by the Letter of Credit. We owed the

29 money to Guinness & Mahon.

79
 1 602 Q. Yes?

2 A. That money was paid to Guinness & Mahon out of our

3 trading account, which was either Ulster Bank or

4 Northern Bank.

5 603 Q. Yes?

6 A. Now...(INTERJECTION).

7 604 Q. You might have transferred that money over?

8 A. To a deposit account or whatever to pay off the L/C.

9 605 Q. Just before the Letter of Credit was due?

10 A. Well, just before or just afterwards. I am not

11 quite sure on those details.

12 606 Q. Yes. However. Guinness & Mahon would have given you

13 an overdraft facility for a time?

14 A. They may have done so, I am not quite sure.

15 607 Q. Did you have an overdraft arrangement with

16 Guinness & Mahon?

17 A. I don't know. I am not quite sure.

18 608 Q. Is it a possibility?

19 A. I doubt it otherwise he would have put it in black

20 and white but it is a possibility.

21 609 Q. I appreciate this is some years ago and I appreciate

22 that one cannot remember everything in detail.

23 However, I did think as a general bit of information

24 you would have recalled whether you did have a

25 borrowing arrangement?

26 A. I am nearly 100% that we did not but then again I

27 can't trust my memory back to 1984 but I am nearly

28 sure we did not.

29 610 Q. Yes?

80
 1 A. Our borrowing arrangements were with our Bank there

2 we were trading with.

3 611 Q. However, you can see, can you not, that if

4 Guinness & Mahon were to pay a Letter of Credit

5 before you transferred the money in from

6 Northern Bank, they would have been running a risk?

7 A. Exposed.

8 612 Q. Exposed?

9 A. So, therefore, we must have paid it in before they

10 were exposed.

11 613 Q. I was hoping for a bit more clarity than that?

12 A. There isn't any more clarity on it. I mean to say

13 it is either the L/C's -- we always got L/C for

14 90 days. So, therefore, that would give us 90 days

15 to collect our accounts.

16 614 Q. Okay. What was your policy for keeping money on

17 deposit with Guinness & Mahon?

18 A. To pay off the L/C.

19 615 Q. Yes. Would that have meant that you would have kept

20 £1,000 in the account, £10,000 in the account,

21 £100,000 in the account?

22 A. I don't know. I don't honestly know.

23 616 Q. Right?

24 A. Because all we would know is what we owed them,

25 would be in our accounts as a debt and that was for

26 us to see. That was the same for our suppliers.

27 So, I mean to say that...(INTERJECTION).

28 617 Q. Anyway you have agreed to try and find this?

29 A. Yes, yes.
 1 618 Q. The other half of this statement (Exhibit 5)?

2 A. If you let me know what you want me to try and get

3 you I will do my utmost to get all the information

4 that is required and what is available.

5 619 Q. Thank you Mr. Sweeney.

6 A. How are you going to let me know that as a matter of

7 interest?

8 620 Q. First of all we will have a conversation with you

9 afterwards?

10 A. With me?

11 621 Q. Yes.

12 MS. MACKEY: We will put it in writing,

13 I think.

14 MR. ROWAN: I think we will follow it

15 up with a letter?

16 A. Okay, right.

17 622 Q. Thank you.

18

19 END OF EXAMINATION OF MR. JAMES SWEENEY BY MR. ROWAN

20

21

22

23

24

25

26

27

28

29

82
 1 MR. JAMES SWEENEY WAS EXAMINED, AS FOLLOWS, BY

2 MR. JUSTICE COSTELLO:

4 623 Q. MR. JUSTICE COSTELLO: Mr. Sweeney, just a

5 few questions to clarify

6 the situation. Would you pass him page 31 please

7 (Same Handed). I want to refer you to a letter of

8 the 24th January 1986 from Guinness & Mahon to the

9 Secretary of your company. Do you see this (Exhibit

10 7) :

11 "Further to recent negotiations, we

have pleasure in confirming that we are
12 prepared to place at your disposal a
facility."
13

14 This is a facility letter. You have seen that, have

15 you not?

16 A. Probably, yes, Okay. I can't recall if I seen them

17 but I must have had.

18 624 Q. Why? Have you a doubt about it?

19 A. Well, it is 1986.

20 625 Q. No. You gave it to us?

21 A. I know but I didn't read everything in that folder.

22 626 Q. Did you not?

23 A. Not really, no.

24 627 Q. Did you not read the documents that Guinness & Mahon

25 gave you?

26 A. Most of them, yes, but...(INTERJECTION).

27 628 Q. Most of them?

28 A. Most of them.

29 629 Q. Then you would have read this?

83
 1 A. Yes, yes, Sir. Right, I read it.

2 630 Q. Then why did you deny a moment ago that you had not

3 read it?

4 A. I didn't deny, Sir. I said I don't recall.

5 631 Q. Would you please be careful with your answers to my

6 questions.

7 A. Sorry, I beg your pardon.

8 632 Q. Listen: I am asking you questions and you are under

9 oath and I am requiring you to be careful in your

10 answers. Will you be careful?

11 A. Yes.

12 633 Q. Very well. Do you recall this letter (Exhibit 7)?

13 A. Yes, to the best of my knowledge, yes.

14 634 Q. Yes. Did you get other letters such as that?

15 A. I can't recall.

16 635 Q. You cannot recall. This is a letter which says the

17 amount of the loan to you was £179,000, is

18 that right?

19 A. Correct.

20 636 Q. It is:

21 "Purpose - the funds are being placed

at your disposal to finance your
22 spring/summer purchases mainly from
your Italian suppliers"?
23

24 A. Yes.

25 637 Q. Who were you Italian suppliers?

26 A. Who were they?

27 638 Q. Yes?

28 A. Pop 84.

29 639 Q. Yes?

84
 1 A. Pooh.

2 640 Q. Yes?

3 A. Stratos, Wampum.

4 641 Q. Yes?

5 A. That is four or five.

6 642 Q. From Italy?

7 A. Yes.

8 643 Q. Yes. The drawdown then was:

9 "We have agreed to an exposure on your

behalf in the form of Letters of
10 Credit."

11

12 This, in fact, was a facility letter referring to

13 your Letters of Credit?

14 A. Yes.

15 644 Q. This was from Guinness & Mahon to you, from

16 Mr. O'Dwyer. Had you met Mr. O'Dwyer before?

17 A. I don't recall.

18 645 Q. You do not recall. Would you just turn to

19 another letter now, on September 1986? It is

20 number 36 (Same Handed) (Exhibit 8). This is

21 another letter that you supplied us with. This is

22 to Martin. That is Martin Keane, is it not?

23 A. Yes, that is right.

24 646 Q.

25 "As agreed during our telephone

conversation to day I enclose herewith
26 up to date figures."

27

28 You had been on the phone with him?

29 A. Yes.

85
 1 647 Q. Is that right?

2 A. Yes.

3 648 Q. Yes.

4 "Our auditors have promised draft

accounts."
5

6 Mr. Keane was looking for draft accounts?

7 A. Correct.

8 649 Q. Yes.

9 "Once again my sincere apologies for

making a "Nuisance" of myself to you.
10 I appreciate very much your..."

11

12 This is a letter to Martin Keane about the

13 Letters of Credit in September 1986?

14 A. Correct.

15 650 Q. Would you turn to another letter, page 39

16 (Same Handed)? This is another letter to Mr. Keane

17 on the 2nd March 1987 (Exhibit 9)?

18 A. Correct, yes.

19 651 Q. It is:

20 "Dear Martin, regarding our recent

meeting and subsequent telephone
21 conversation I wish to confirm that our
requirements for Spring/Summer 1987 are
22 as follows ..."

23

24 And they are set out:

25 "...all in favour of Pantrem and

C.S.P.A."?
26

27 A. Yes, yes.

28 652 Q. Who is Pantrem?

29 A. Pop 84.

86
 1 653 Q. Pop 84. Italian?

2 A. Yes.

3 654 Q. Who was C.S.P.A?

4 A. That is just Company Limited in Italian.

5 655 Q. Sorry?

6 A. That is Company Limited in Italian, that is as far

7 as I recall. It is not Pantrem and C.S.P.A. It is

8 Pantrem C.S.P.A. ...(INTERJECTION).

9 656 Q. However, that is what the letter says?

10 A. Well, the letter is incorrect.

11 657 Q. I see. Very well. It was to Pantrem?

12 A. Yes.

13 658 Q. Pantrem seemed to have been -- this was a

14 substantial amount of business you seemed to do with

15 the Italian suppliers. Used you approach them

16 direct or how did you place the orders?

17 A. We placed the orders the same way as we place them

18 on everything else, forward orders.

19 659 Q. Yes?

20 A. We sold six months in advance and placed the orders

21 with them and...(INTERJECTION).

22 660 Q. How would you decide to place the orders with these

23 Italian firms? Was this as a result of seeing their

24 products.

25 A. Yes, yes, yes.

26 661 Q. Where? How would you see their products?

27 A. We would see them at fairs.

28 662 Q. At fairs?

29 A. Yes.

87
 1 663 Q. I see. Were these Italian companies associated in

2 any way with Wallys?

3 A. Well, this is -- I think they were but directly or

4 indirectly I am not quite sure.

5 664 Q. You are not quite sure?

6 A. I am not sure.

7 665 Q. You dealt directly with them?

8 A. I dealt directly with them.

9 666 Q. I just want to understand this: You dealt directly

10 with these Italian firms?

11 A. Yes .

12 667 Q. They would then get paid by you by means of this

13 Letter of Credit and you would pay Guinness & Mahon

14 then subsequently. Where did Blue Jeans come into

15 that?

16 A. They got a commission on our sales because they

17 introduced us to Pantrem.

18 668 Q. There must be some agreement somewhere by which you

19 agreeD to give them a commission on your sales?

20 A. For marketing the product in Ireland.

21 669 Q. Is there an agreement?

22 A. An agreement? A verbal agreement? You have the

23 letter of agreement actually. It

24 is...(INTERJECTION).

25 670 Q. No. I want to know was there an agreement by which

26 you gave commission to Blue Jeans, as I

27 understand 15%?

28 A. Well, now. That was an approximate percentage that

29 I gave.
 1 671 Q. What was the agreement?

2 A. The agreement, as I said, was a pound to 0.75p

3 per garment.

4 672 Q. Yes?

5 A. It was royalties or commission.

6 673 Q. Was that agreement in writing?

7 A. Yes, there is a letter to that effect.

8 674 Q. Was that agreement in writing?

9 A. Yes, Sir.

10 675 Q. Yes. Was it in the documents you gave us?

11 A. Yes, Sir, it was.

12 676 Q. A letter saying that you...(INTERJECTION)?

13 A. From Blue Jeans, yes.

14 677 Q. Saying what?

15 A. Saying precisely that.

16 678 Q. That they were giving...(INTERJECTION)?

17 A. They would charge for their services

18 at...(INTERJECTION).

19 679 Q. At £1 per...(INTERJECTION)?

20 A. £1 per garment, yes.

21 680 Q. Can you show it to us in these documents?

22 A. Well, if it is there but I submitted it to you

23 people anyhow.

24 681 Q. We will leave it for the moment. You can get it

25 later to us?

26 A. Yes.

27 682 Q. Because I have not found it Mr. Sweeney?

28 A. Well, it was submitted.

29 683 Q. Yes, I see. Very well. It may be there but I have

89
 1 not found it and we can check it out?

2 A. Alright.

3 684 Q. If you were getting the goods and paying the Italian

4 suppliers, they then sent them direct to you

5 from Italy?

6 A. Yes.

7 685 Q. How would you then account to Blue Jeans for the

8 commission that you owed them?

9 A. Well, they would know the L/C facility backing that

10 they had to give us.

11 686 Q. Yes?

12 A. They would know the amount of garments we bought.

13 687 Q. Yes?

14 A. They would know the percentage commission or what

15 they were due.

16 688 Q. What would you do?

17 A. Pay them.

18 689 Q. How would you do that?

19 A. On -- when we would get paid.

20 690 Q. Yes?

21 A. As we issued invoices.

22 691 Q. Yes?

23 A. We would issue -- invoices would be issued to us

24 from Blue Jeans.

25 692 Q. Yes?

26 A. They had to see all these other invoices.

27 693 Q. Sorry? Sorry, just take it slowly a moment?

28 A. We would send out 1,000 garments. We would invoice

29 the customers. Copies of those invoices went to

90
 1 Blue Jeans. Blue Jeans then issued us an invoice on

2 the strength of our invoicing and we had to pay

3 them.

4 694 Q. All your business throughout these years, every

5 invoice that you sent to a customer in Ireland a

6 copy of it was sent to Blue Jeans?

7 A. Practically, yes.

8 695 Q. Were the customers in Ireland invoiced from your

9 company or from Blue Jeans?

10 A. From J.B Agencies.

11 696 Q. Yes. How was this shown in your accounts? How was

12 this transaction shown in your accounts?

13 A. Which transaction?

14 697 Q. The transaction that you were paying them 15%

15 commission?

16 A. Well, it was shown as royalties and commission paid

17 to Blue Jeans.

18 698 Q. I see. They would be in your accounts?

19 A. They are in the accounts, yes.

20 699 Q. Yes. Very well?

21 A. Yes.

22 700 Q. You can get those for us, I suppose,

23 without...(INTERJECTION)?

24 A. You just let me know what you want.

25 701 Q. Very well?

26 A. And if they are available, Sir, I shall get them for

27 you.

28 702 Q. Very well. I referred you to the letter of the

29 5th September 1986 (Exhibit 8). I will just refer

91
 1 you to the letter dated 2nd March 1987 at page 39

2 (Exhibit 9)?

3 A. Yes, I have that.

4 703 Q. To Mr. Keane?

5 A. Yes .

6 704 Q. Again:

7
"Regarding our recent meeting and
8 subsequent telephone conversation."
Q
j

10
It looks as if you had fairly regular meetings with

11 Mr. Keane?

12 A. Sorry, as you can see that meeting was attended by

13 Mr. Kennedy.

14 705 Q. Yes. Mr. Kennedy then?

15 A. And...(INTERJECTION).

16 706 Q. Mr. Kennedy or yourself?

17 A. No, Mr. Kennedy.

18 707 Q. No, sorry. Frequent meetings either by Mr. Kennedy

19 or yourself?

20 A. Well, I was at some of the meetings but this, the

21 financial end, was more Mr. Kennedy's end but, yes,

22 I met Martin Keane at one or two meetings earlier

23 on, or one meeting. This one here (INDICATING).

24 708 Q. I am sorry?

25 A. The 13th January letter (Exhibit 2).

26 709 Q. I am sorry Mr. Sweeney. Are you telling us now that

27 you only meet him once?

28 A. Sir, I am honestly telling you I don't know how

29 many times I met Martin Keane.

92
 1 710 Q. Does this correspondence not show you that you meet

2 him fairly regularly?

3 A. Not fairly regular, no, Sir, it does not.

4 711 Q. It does not?

5 A. No.

6 712 Q. I see?

7 A. No, it does not.

8 713 Q. You are not able to assist us beyond what is shown

9 in the letters as to the times you would have seen

10 him?

11 A. The frequency I meet Martin Keane?

12 714 Q. Yes?

13 A. I did say that we may have meet him once a year.

14 715 Q. Yes?

15 A. For... (INTERJECTION) .

16 716 Q. "We," who is "we"?

17 A. Terry Kennedy and myself.

18 717 Q. The two of you would go?

19 A. Or Terry Kennedy on his own.

20 718 Q. On his own?

21 A. Yes.

22 719 Q. Very well. These documents that you have given us,

23 I think you have agreed that it is highly likely

24 that you would have read them, would I be correct in

25 saying that nowhere in the records in the letters to

26 you, a letter of facility to you, or in the records

27 that Guinness & Mahon has kept, is there any

28 reference to the fact that there is a letter of

29 facility that was guaranteed by Blue Jeans?

93
 1 A. To Guinness & Mahon from Blue Jeans.

2 720 Q. In any of the documents that you have given us would

3 I be correct in saying that there is no reference

4 anywhere to the fact that the Letters of Credit that

5 you obtained were guaranteed by Blue Jeans?

6 A. Well, I thought the letter I attached with my

7 statement said that.

8 721 Q. Which letter are you referring to?

9 A. I put in my statement a full attachment.

10 722 Q. The letter written to you?

11 A. It wasn't actually written to me. You gave it to me

12 earlier on.

13 723 Q. Yes .

14 A. I think there it is there.

15 724 Q. Page 44 (Exhibit 6)?

16 A. Is that it there? That one there? Does that not

17 say that?

18 725 Q. Yes, it does. That is a letter to you?

19 A. It is Terry Kennedy actually but J.B Agencies.

20 726 Q. Yes. Am I correct in saying that that letter to you

21 is the only reference in all of the documents that

22 Guinness & Mahon supplied to you, which refers to

23 the fact that the loan was guaranteed by Blue Jeans?

24 A. To my recollection, yes, Sir.

25 727 Q. Yes. Do you know why this letter was written, this

26 memo was written?

27 A. There may have been a delay in a guarantee and we

28 were anxious to make sure that we got it or else we

29 were out of business. That is -- may be it was

94
 1 urgency on our side.

2 728 Q. Are you suggesting that the Letters of Guarantee

3 depended on the action of Blue Jeans?

4 A. Mr. Wallaert.

5 729 Q. Yes. Mr. Wallaert?

6 A. Mr. Wallaert, yes.

7 730 Q. On the letters I have shown you, do they not

8 indicate that you were in touch personally, or

9 Mr. Kennedy was in touch personally, with

10 Martin Keane about the Letter of Credit?

11 A. We were, yes, but this still -- we wouldn't have got

12 facilities off Guinness & Mahon on what we were

13 willing -- what we were capable of putting up.

14 731 Q. For security?

15 A. Yes.

16 732 Q. The position then is that you negotiated the

17 Letters of Credit but you accept that you would not

18 have been able to get the Letters of Credit but for

19 this guarantee?

20 A. Yes.

21 733 Q. From Blue Jeans?

22 A. Yes.

23 734 Q. Did you tell Blue Jeans from time to time what

24 amount you were looking for?

25 A. These orders went to Belgium, to Wallaert.

26 735 Q. What orders?

27 A. The orders requiring the spring/summer -- we will

28 say the spring/summer of next year would go out now.

29 736 Q. Yes?

95
 1 A. They would amount to £500,000.

2 737 Q. However, are you saying that all the orders.

3 Including orders to Italy, went to Wallaert?

4 A. No, not all the orders to Italy.

5 738 Q. Yes?

6 A. The...(INTERJECTION).

7 739 Q. Am I correct in saying that the only orders that

8 you sent to the Belgian firm were orders in

9 respect of goods in respect of which the

10 Belgium firm manufactured?

11 A. Correct, yes, yes.

12 740 Q. Therefore, you would have sent -- you would have

13 bought from France and you would have invoiced them

14 directly?

15 A. Yes .

16 741 Q. How did Blue Jeans know what the Letter of Credit

17 was for?

18 A. On the invoices that we would raise on behalf of the

19 companies. They had to get copies.

20 742 Q. Did they get copies of all the invoices that you

21 sent to your Italian suppliers?

22 A. Yes, yes. Sure they were paid royalties and

23 commission on it.

24 743 Q. No, no. That was when the payment was made. As I

25 understand it as soon as you got paid from your

26 Irish supplier you sent on an a copy of the invoice

27 to Blue Jeans?

28 A. Em...(INTERJECTION).

29 744 Q. Sorry, was it Blue Jeans or was it to Belgium?

 1 A. I misunderstood your question, sorry.

2 745 Q. Was the invoice sent to Blue Jeans or to Belgium?

3 A. The financial requirement, the value of the order?

4 746 Q. I am talking about two separate things now. I was

5 asking you about the value of the order and I will

6 come back to that. As I understand it you said that

7 when you invoiced your Irish suppliers and they paid

8 you then and that you sent on a copy of this. I am

9 asking you did you send it on to Blue Jeans or did

10 you send it on to Belgium, to Wallys?

11 A. To my best recollection I think Belgium.

12 747 Q. Belgium?

13 A. I could maybe have sent it to Blue Jeans. It is a

14 possibility. I am not denying it could have

15 happened.

16 748 Q. However, you think it may be Belgium?

17 A. Yes, I think so. I think it was Belgium but then

18 again I may be wrong.

19 749 Q. You may be wrong, yes. That was the information

20 that you gave by which Blue Jeans got approximately

21 their 15% commission?

22 A. They got it. We will see from the letter that they

23 got a price per garment.

24 750 Q. Per garment?

25 A. Percentage...(INTERJECTION).

26 751 Q. Percentage?

27 A. I could be wrong mathematically.

28 752 Q. Alright. What I want to come back now to and ask

29 you about is sending on copies of orders which you

 1 had placed with your Italian suppliers. Did you

2 send copies of those orders to Wallys in Belgium?

3 A. To?

4 753 Q. To Wallys in Belgium?

5 A. No, what the purchase...(INTERJECTION).

6 754 Q. Did you send copies?

7 A. A compiled copy of the total of the value of the

8 goods.

9 755 Q. So...(INTERJECTION)?

10 A. And the number of garments.

11 756 Q. You would regularly send to Wallys?

12 A. Yes.

13 757 Q. The amount of orders?

14 A. Purchases.

15 758 Q. Purchases?

16 A. Required, yes.

17 759 Q. You had made?

18 A. Yes.

19 760 Q. Yes. Was it on the basis of that that they then

20 had the information as to the Letters of Credit?

21 A. Correct.

22 761 Q. Yes. Very well Mr. Sweeney. I just want to look at

23 this document that we have looked at already,

24 page 44. It is this memo to Terry Kennedy. This was

25 amongst the documents that you gave us (Exhibit 6)?

26 A. Yes.

27 7 62 Q. This would have been amongst the documents which

28 Guinness & Mahon sent to you?

29 A. Correct, yes.

98
 1 7 63 Q. Do you know how Guinness & Mahon got the memo from

2 Blue Jeans addressed to Mr. Kennedy? How it came

3 into their position?

4 A. I have no idea.

5 764 Q. I see?

6 A. They may have requested it, I don't know, but I have

7 no idea.

8 765 Q. Did you know Mr. A. J. Nichols?

9 A. Not personally, no.

10 766 Q. No, not personally. However, did you know him? Do

11 you know who he was?

12 A. A Director of Blue Jeans, yes.

13 767 Q. Do you know if he was a Director of any other

14 companies?

15 A. No, I am not aware if he was a Director of any other

16 companies.

17 768 Q. Did you know that he was a Director of

18 College Trustees?

19 A. No.

20 769 Q. Have you ever heard of College Trustees?

21 A. No.

22 770 Q. You have not?

23 A. No, Sir.

24 771 Q. You have never heard of the firm College Trustees?

25 A. No, Sir.

26 772 Q. Very well?

27 A. Yes.

28 773 Q. Thank you Mr. Sweeney. We will drop you a line and

29 let you know what documents we would like you to

99
 1 get us. Sit down. It is alright Mr. Sweeney.

2 Ms. Cummins will be in touch with you when the

3 transcript is prepared and we would ask you to

4 come in to sign it then?

5 A. Certainly, certainly.

6 774 Q. Thank you.

8 THE EXAMINATION WAS THEN CONCLUDED

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

100
^ovXoLbor-

N X •Jcwvxcx'^^ 0\
Appendix XV (143) (1) (b)
Appendix XV (143) (1) (c)
 BLUE JEANS LIMITED

PRIVATE

12th January, 1988

The Manager,
Guinness Mahon Ltd.,
17, College Green,
Dublin 2,.
Ireland.

Dear Sirs,
Guinness Mahon Cayman Trust.Limited for
aoooiint of Blue Jeans Limited

Please accept this letter as your .authority, until further notioe

to divulge any information requested of you by the Company's
auditors, Messrs. Linoe, Salisbury, Header & Co., of Avenue House
St. Julian's Avenue, St. Peter Port, Guernsey, concerning the
' company's bank accounts and affairs with your bank.
Yours faithfully,
'for Blue Jeans Limited

BY COURT ADMINISTRATION UMI t Eu

Appendix XV (143) (l)(d)
 Credit Memorandum •
J.B. AGENCIES LIMITED.
Submitted by:
• «
MCK
)C S: Capel Street, Dublin 1. Equity Stake: N O
4

JSINE& / Clothing Importers / Wholesalers C.8. Approval: JWI/No

JCUPATION: Permission Obtained
Data: 1

IIS APPLICATION: N«w Facility /

(Diktats approprbta)
•wjHf^wwaaatjKWuafK

CPE:, L/C AMOUNT: RATE: ... FEE:

!«• Hi
(equivalent In Lire)
• ••M IIIMtHttMK • M*»ttN*IMM*N«<«

•MNMMMMt* (H« |H HI •««•« «•« •••••• «IN«*MlM*HN*HtlMI*W»NH

l»MMIIM*«IM4«l*<NM*«l
• M«HH*MIMH*I **HM««HMHM

If imw or Increawd
1RPOSE/D R AWDOWN:
facilities, b drawdown
/fynce Autumn/Winter purchases from Companies main permitted prior to
pj,^"' • in Italy (Pop. 84)- Totally seasonal requirement. completion of security?

YES/IIOC

REVIEW DATES:
:RM OF FACILITIES:
st J a n u a r y 1987 31.1.87.

JURCE OF REPAYMENT:
'A
If additional or existing
•CUR1TY:
facility, b lacurlty In order?
srsonal guarantee of Directors, Life Policies 150k assigned to us.
iequate security approximate value £ 1501c held. YES/NO

If No, give detatla separately.

stCKGROUND NOTE/
JTLINE OF PROPOSAL:

Company has been a customer for several years and the account has always
•een conducted in order. All Imports are pre-sold at a mark up of 40%
o a wide spread of customers with oniy a few large accounts e.g. Rcches,
tests. Bad debt experience very good.

ilated Facilities/Borrowers: CREDIT COMMITTEE

alance or.Limit, whichever is greater)
Minute. .Z.^k?. Date. J f c J

JLJLB!:H^TL
g Recommended
Appendix XV (143) (1) (e)
 N

Date:

-. 3 APPLICATION: Hnw r.iillii/ / Additional Facility / '-"tar? / r ' p

(Oa/ate as appropriate) . 'Existing facilities overleaf

TYPE: AMOUNT: RATE: FEE: f.^.O

• »H*MM««*«NI«M««n»H<«MHtMMI

PURPOSE/DRAWDOWN: If new or increased

facilities, b drawdown
permitted prbr to
VAT Guarantee completion of security?

YESSW0

TERM OF FACILITIES: REVIEW DATES:

J 30th November, 1986 *>.'*' C.... 30*th Nov.• 1986..

•

SO"^CE OF REPAYMENT:

N/A •
SECURITY": ~ " If additional or existing
facility, ii security in order?
Joint & Several guarantee of directors considered
adequate for £25,000 YES/NO

If No, give details separately.

iA("GROUND NOTE/
Established customers. VAT- guarantee cbvers Winter Imports.
Djli-s IE OF PROPOSAL:
Company has traded very succesfully over the last several
years. . Profits y/e 30.4.86. £100k+

elated Facilities/Borrowers: CREDIT COMMITTEE

Balance or Limit, whichever]* greater)
Minute FJLTLSL...
L/C facility £130,0000 Recommended

BOARD

Minute M l . ? ] . ! !
iosure: £155,000
w u.nitls) Racord.fl h ' / ' = / 2 ** A -.-..-....J
 jL Cadit Mamorandum
j v . J. 0. AGENCIES^lMlTED
Submiltadby: CAW/MCK
Aoonsss: 10, Capel Street, Dublin t Equity Slaks: No.
C. B. Approval: Y as/No
business/ , Permloion Obtained
OCCUPATION; Clothing Importers Data: N/W
I,
4

THBAIfUCATlON: lt*XXUMlf/Addltbnil Faculty/WMMJMbowiartwitAII.JutMn

'Exiitlng ficllltloa ovarlaaf
(Dthlt a tppraprii(t)
.*>• RATS: . FEE: £2.50
AMOUNT: „i25,000
TYPfc. Guarantee
M«
N «
M limmMIMti

K,

tWmiWWMMWmuMK
' W

Ifrimror Incrvand
I POSE/DRAWDOWN: fadlitlat, b drawdown
parmlttad prior to
^Guarantee cocnpfatlon of aacurlty 7
YES/IW

REVIEW DATES:
TERM OF .FACILITIES:

30th April, 1987

30th April, 1987

SOURCE OF REPAYMENT:
N/A
If additional or Milting
SECURITY: facility, fc security ki ordar?

Joint & Several guarantee of directors considered adequate YES/NO

. £25,000
If No~slv< datalla wparalaly.

BACKGROUND NOTE/
OUTLINE OF PROPOSAL: .
Established customer V.A.T. guarantee covers Winter•Import*• Company has traded very
successfully over the last several years. Profits y/e 30.4-86 £10UK*

1/
CREDIT COMMITTEE
Helatad Facilitias/Borrowari:
lalance or Limit, whichevar is greattr) Minut.

A,.UDSHH^I
J Recommendfld
Appendix XV (143) (1) (g)
ADDRESS: 18 C'ipel Street, Dublin 1
Equity Stat"?: NO
BUSINESS/ C.B. Approval: Yes/No
Clothing Importers/ Who ional or 3.
OCCUPATION: Permission Obtained
Date: N/A

THIS APPLICATION: Increase / Extension / RKJKJttfMKXX

(Dnlnte as nppmnrintfi) (It.Jim V>7 .mi 1 ! inn) '

TYPE: . M . ^ ^ ' 9 f .. . C r r " ! : ! . i t . . AMOUNT: £ ) ... RATE: FEE: f,.l,.50..p( ? .r...r T lj | | e

(! nrrr; isc from LHH,')')() -
/(. lini I b.7...M.i.l.l.i.on.).....
(b) Guarantee £30,000 (lncrcnso from £25,000) £300.00

If new or increased
PURPOSE/DRAWDOWN:
facilities, is drawdown
(a) To finance Spring/Summer purchases from main supplier permitted prior to
in Italy. completion of security?

(b) To cover deferred payments of VAT at point of entry. YES/>W®

TERM OF FACILITIES: REVIEW DATES: \

(a) To 30th May, 1987 28th February, 1988

(b) To 28th February, 1988

SOURCE OF REPAYMENT: Main Bankers: Ulster Bank,
^ .. 2/4 Lower O'ConneJI Street.
From cash flow. o / d £ 5 0 k L / c £|25k

SECURITY: If additional or existing

facility, is security in order?
Personal guarantee of directors, L i f e policies £150k assigned to us.
YES / N O
Adequate security value £ ! 9 6 k held
If No, give details separately.
Counter Indemnity re VAT Guarantee to be completed.

BACKGROUND NOTE/
OUTLINE OF PROPOSAL: J. B. Agencies L t d . are in the business of clothing importers and
wholesale retailers. The directors and owners are Jim
Sweeney & Terry Kennedy. Company Mas been a customer for a number of years and the account
has always been conducted in order. All imports are pre-sold at a 40% mark up to a wide spread of
customers with only a few large accounts e.g. Roches, Bests. Bad debt experience very good.
Profits y / e 30.4.86 - £100k+.

Recommended.

Related Facilities/Borrowers: CREDIT COMMITTEE

(Balance or Limit, whichever is greater)
Minute.. ... Date.

A .
v Recommended

BOARD

Minute....
to,pts.l
Total Exposute: £223,921. Date.

New Limit(s) Recorded by: Date flpprovoc^^"'*

Security in order for Drawdown: G.M. & Co. (if over E l m total exposure)

Dale Approved by: . Date:

Appendix XV (143) (1) (h)
 Submitted by:
fSS: 13 Capel Street, Dublin
Equity Stake: NO
BUSINESS/ Clothing Importers / Wholesalers C.B. Approval: Yes/No
OO ATION: Permission Obtained
Date: N/A

THIS A P P L I C A T I O N : Now Facility / PTO - >

(Delete as appropriate) 'Existing facilities overleaf

L e t t e r of Credit £190,700 . P.®r_niH

TYPE: AMOUNT: RATE; FEE

(Italian Lira 369 million)

PURPOSE/DRAWDOWN: If new or increased

To finance late Sjmmer purchases from main supplier in Italy - 90 facilities, is d r a w d o w n
days sight drawings.: permitted prior to
completion of security?

YES/>W5
,-f
f c R M OF FACILITIES: REVIEW DATES:

T o / J 5 t h January 1988 15.01.88

SOURCE OF REPAYMENT: Main Bankers: Ulster Bank

2/4 Lower O'Connell St.
From cash flow. o/d £50k L/c £125k
Secured by general charge.
SECURITY: If additional or existing
Personal guarantee of directors, life policies £150k assigned to us. facility, is security in order?

2nd Fixed and Floating charge over company assets, ranking after 1st YES/I^
charge to Ulster Bank.
Adequate security value £207,700 held. If No, give details separately.

y
•'^Jr

BACJjMiROUND N O T E /
OU1 JE OF PROPOSAL:

J. B. agencies L t d are c l o t h i n g importers and wholesale retailers and have been known to us
for some years. A / C has always been conducted in order and the directors and owners of the
company are Jim Sweeney and Terry Kennedy. The imports are pre-sold at a 40% mark up to a
widerange of customers, the large accounts being Roches, Bests, Smarts, Clery's & Switzers. Bad
debt experience very good. Profits y/e 30.4.86 £10,697 accounts attached.

Recommended.
Related Facilities/Borrowers: CREDIT COMMITTEE
(Balance or L i m i t , whichever is greater)

Current a/c £400 DR Minute UJ3N- Date..J..k:..l:¥.Z

d/a £75 CR
VAT Guarantee £30,000 j L ^ l ^ ^ y ^ ^ l .
Recommended

BOARD _

Minute Date ..!...'.

£220,700
u -l'L ^c U,
New Limit(s) R P r n r H o ,,
 Appendix XV (143) (l)(i)

T ¥
 DDR ESS: 13 c a p e i S t r e e t , Dublin 1.
Equity Stake:
NO
J SIN ESS/ C.B. Approval: >Vfe$/No
Permission Obtained
ccupation- Clothing Importers / Distributors
Date:

HIS APPLICATION: Wi^^^H^/icActcMMaKal^XlKUiiKiX^lncrease /

(Delete as appropriate) '

YPE: .....F/X..Line AMOUNT: ..£.2S0.,0Q.Q RATE: - FEE: ,

If new or increased
PURPOSE/DRAWDOWN:
facilities, is drawdown
Foreign Exchange Dealing. permitted prior to
completion of security?

YES/I^

R E V I E W DATES:
TF""" OF FACILITIES:

15.01.88 (To coincide w i t h expiry of L / C facilities) 15.01.88

SOURCE OF REPAYMENT: Other Bankers: Ulster Bank,

O'Connell St.
Normal trading.
If additional or existing
SECURITY:
facility, is security in order?
Personal guarantee of Directors.
Life Policies for £150k assigned. YES/NO
2nd Fixed & Floating charge over the company's assets, ranking
after Ulster Bank's 1st charge. If No, give details separately.
Security considered adequate for £207,700.

B A ^ G R O U N D NOTE/
Oy*UNE OF PROPOSAL:
L e a e r of Credit facilities of £199,000 are presently in place. Company has been dealing in
Foreign Exchange and requires formal l i m i t . A line of £250,000 (risk £25,000) should be sufficient
and is recommended.

Related Facilities/Borrowers: CREDIT C O M M I T T E E

(Balance or Limit, whichever is greater)
Minute U..I..L Date (.Q...J..:.L1....
L/C's £199,000
VAT Guarantee £ 30,000
/Recommended

BOARD .

g_TouijExpOSUrn: £254,000. - Y TIH/LJ,

..Lhr.i
"'tis) Rccorclfiil by. Da to: Approved
 N

Crtdtt M«moraiuiuni
J B Agencies Limited Submitted by: CAW .
E 18 Capel Street, Dublin 1 Equity Staka: N o

C.B. Approval: Yes/No

J£SS/ clothing Importers/Distributers Ptrmlsilon Obtained
PATION:
Data: N/A

APPU.CAT.ON: ^ ^ ^

Letter of Credit amount: £?.99jS9&. hate: fee: £J..5Q„per..janUla..

(Italian Lire 390 million)
••••Ua»M*H»MtnH<nMMI«MMMIIH«N> *

If new or lncrtsud
POSG/ORAWOOWN: (acilltfai, h drawdown
fiv'^Tce late Spring purchases from main supplier In Italy - permitted prior to
sight drawings. completion or wcurUy7

YES/MX

IM OF FACILITIES: REVIEW DATES:

IS April J988 15 April 1988

Main Bankers: Ulster Bank L t d .

JRCE OF REPAYMENT: 2/4 Lower O'Conneli Street
o / d £50k: L/C £l25k.
3m cash flow. Secured by oeneral charoe.
If additional or exlitlng
JURITV: facility. Is taourlty In order?
rsonal guarantee or directors, life policies £150k assigned to us.
cond Fixed and Floating charge over comparty assets, ranking yes M
ter first charge to Ulster Bank.
1f No, glva dotal)* aaparataly.
let, s security value £220,000 held.
?

vCKGROUNO NOTE/
JTUNE OF PROPOSAL: -
B Agencies Lid. are clothing Importers and wholesale retailers, and have been known to us for
me years. A / C has always been conducted In order and the directors and owners of the company
e Jim Sweeney hnd Terry Kennedy. The imports are presold at a 40% mark-up to a wider range
customers; the large accounts being Roches, Bests,' Smarts, Clerys & Swltiers. Bad debt
perfence very good. Estimated profits year ended 30/4/87 £30,000.

scorn mended.

CREDIT COMMITTEE
elated F«cilillm/8ofro«"irj:
lalanca or Llmli, wltichavar Is paalRf)
Mlnuta W ± 2 , r
jri . Account £ ICR
3p Account £ 74CR
Lbfc^Jli,
Rocommnnded
c->n rvK)

¥
Appendix XV (143) (l)(k)
 BUSINESS/ C B. Approval: Yes/No
OCCUPA TIOM (Dot hing I m p o r t er.s/l ) i s i r i l j u i or s. Ter mission Obtained
• Date: N/A

THIS APPLICATION: Ntiraftw^xt.Y;/,Wk!*i*X!XiJ(KffHfttt.Vx'jmS'**' Extension / IVmIv.S^'X.x

{Dclcln ns n/'priiprinlr) ' Ewt'X «ng tfarj) i x x

VAT Guarantee AMOUNT: .. TEE: P-'T-

TYPE: f? A T F

PURPOSE/DRAWDOWN: If now or increased

facilities, is drawdown
To cover deferred payments of V A T at point of entry. permitted prior to
completion of security?

Y15-7W3 N/A

TERM OF FACILITIES: REVIEW DATES:

E x ' . *sion for 6 months. 31st August, 1988

SOv- JE OF REPAYMENT: U l s t e r Hank, 2/4, Lr. O ' C o n n e l

S t . O / D 5 0 k ; L / C 125k
From Cash Flow
S e c u r e d by g e n e r a l c h a r g e .

SECURITY: If additional or existing

facility, is security in order?
Personal guarantee of Directors. L i f e P o l i c i e s 150k a s s i g n e d t o
us. S e c o n d F i x e d a n d F l o a t i n g C h a r g e o v e r c o m p a n y ' s assets r a n k i n g YES/NO
a f t e r F i r s t C h a r g e t o U l s t e r Bank L t d . Adequate securities valued
at £ 2 2 0 , 0 0 0 h e l d . • -,,,'i ; If No, (jive details separately.

B / ^ ' G R O U N D NOTE/ L / C f a c i l i t y o f £ 2 0 0 , 0 0 0 r e c e n t l y a p p r o v e d e x p i r e s t i e x l m o n t h . T h e extension now

O' C ^ i N E OF PROPOSAL: r e q u e s t e d to end o f A u g u s t when the company w i l l s u b m i t nn a p p l i c a t i o n
covering its overall requirements for the following year. T h e c o m p a n y h a v e b e e n k n o w n t o lis f o r som
ye^s T h e a c c o u n t has a l w a y s b e e n c o n d u c t e d in o r d e r . D i r e c t o r s and shareholders are J i m Sweeney
am, erry Kennedy. T h e goods i m p o r t e d a r e p r e s o l d at a m a r k up o f 4 0 % t o w e l l k n o w n r e t a i l o u t l e
such as R o c h e s S t o r e s , A r n o t t s , S m a r t s , C l e r y s a n d S w i t z e r s . Had d e b t s a r e m i n i m u m . Estimated
p r o f i t s f o r Y / E 30.4.1987 £ 3 0 , 0 0 0 .

Extension recommended.

nnlfltnd Facilities/Borrowers: CREDIT COMMITTEE

(Balance or Limit, whichever is f|rrater)
Minute.
I SIX onto...2..

Letter of Credit Facility £200,000

BOARD

Totnl Exposure: £2.'30,000.

' J^JJB^
VJow Limit(s) Recorded l i y I),it<:

"'airily in order fnr Drawdown G.M. & Co. (il over E 1m total oxposme)
Appendix XV (143) (1) (I)
 onnrv; 13, ( ;ipH St reel, Dublin, I.
F'luiiy Si.il': f\J,)
i isir-n-sr./ C I). Appr oval: ^'^Mo
( |nt liing Import ers/Disl ribut oi s Permission Obtained
>RCT IPA
[ 3 n r r-:

HIS APPI.ICAIION KoX:Kr.* W K W i > i < K i / M X nnv / Extension

IPi'lcti' ,TS nppin/uintc) T: xist int| fncilit ies ovi lenf

VIT: AMOUNT: RATE: f FT

IRX.SO.OOO.
—t ,/n i:a
V/\ f Gininnjl.ne
( l ? . r>" p>' r mill" rr i ppn i
I .(•! t'M ;• i (rv(Ii t F aci I i ty j R £3 00,000 (eq u i v a i i i) -- (,- i.sn n»r..inU.lp ?'.•.. r.o

I (iIPign I,xohange I.i n e !R£250,000 ;- ---

.tltPOSf/DRAWDOWN: If new oi incieased

facilities, is drawdown
To c o v e r deferred payment of VAT at point of entrv.
permitted pi inr to
To finanee purchases from suppliers, mainly It alian. completion of seem ily ?
To c o v e t Foreign Exchange deal ings.
/ NO
RAWDOWN: Alreadv in place.
r
RM nr TACIIJ TIES: REVIEW DATES:

TVear 31/8/1989

)URCE OF RLPAYMEN T:
OTHER HANKS:
Normal Trading U l s t e r Hank, O'Connell St.,
DiId in, 1 .
COMITY: If additional oi existing
facility, is secutily in order?
Ccrsonnl G u a r a n l e e s of T. Kennedy and J.H. S w e e n e y ,
l ife P o l i c i e s on Directors for £250K e a c h , assigned to G&M.
S e c o n d fixed arid floating c h a r g e o v e r c o m p a n y ' s a s s e t s ranking
a f t e r Ulster Hanks first c h a r g e for IR£200,000*. If No, give details sepaiately.
N e w g u a r a n t e e for increased
-entity considered adequate to (.lie extent, of IR£307K.
amount to be c o m p l e t e d .
Fixed and floating charges to
be s t a m p e d up to IR£380,000

w;K(,ROUND NOTE/
JTI.INE Of: PROPOSAL:
H. / ncies I,id. has been a client s i n c e 1983. As turnover increased so did its l./C' requirements.
ie appendix summarises the trading r e s u l t s . a n d financial position. Small profits/break e v e n has
en the norm although it is that this d o e s not a c c u r a t e l y reflect the true profitability of the
sinoss. A c c o u n t s for Lho y e a r e n d e d 3 0 / 4 / 8 8 are due shortly and are e x p e c t e d to show
MH i c n s e in declarec' profits. M a n a g e m e n t is e x p e r i e n c e d in the rag trade and the account
well c o n d u c t e d . Security is c o n s i d e r e d a d e q u a t e to the e x t e n t of IR£307 K. This is likely to
ipr o v e to IR £ I00K approximately in the c o m i n g year. Recommended.

•lali'd rai:ili|ii's/Rni rowei s: CREDIT COMMITTEE

alance or Limit, whichever isqieatei)
f
Minnie |..'rr Date <?.;?....£....?..!:'
IR£
Guarantee 30,000 A [xA.^A.
Fa< ility 300,000 Recommended
X l.ino CT 20".!, BOARD
50,000
>'•'1 Cxposm- IR £380,000 Minnie / t^.e

•w Limit (<-.) Recorded l,y:

Dan Appn'ved
Appendix XV (143) (1) (m)
 U/87 '90 I0t27 S 733032 JBflGEHCIE?LTD 01
11/87 >90 lei^ty 2 733032 JB MEIICI^LTD 01
i •«!'• 048126218

TELEFAX COVER
To: Tftgyy f t o s d j 1

Company: J . B. Attendee Limited

Telefax No: m \ - m m

Prom: BlM# J^fnf LlnlfcitL

t Re: of i/ft FmlHffflft-
Date: 26 <6,9.0. ,, Tlraw NoTofPauM j i
(Including cover)

MESSAGKi
W* wish Co confirm that wo
Credit f a c i l i t i e s provided
sterling £475,000. We can
deposits in support of any
for BLUE JEANS LIMITED
ere willing to guarantee Letter of
eo yourselves up to a naxlmum of
prov'ida c o l l a t e r a l in the form of cash
ouch guarantee.

A. J . Nichols
Director

<D>

' y»« i<> nMraoolvitil (hi |M(et, or If any ponlnn of ttw Utniinl n|on U IlleilWc, ple»i« nmlfy Ui »<»utiptimie, It left* or Lid* ImiiKxttiu/)' n th
Appendix XV (143) (2) (a)
 22/01 02 TUE 12:04 FAX 00 IVOR FITZPATRICK ®00

IVOR FITZPATRICK & CO.

SOLICITORS N
44 - 45 ST. STEPHEN'S GREEN, DUBLIN 2.
TELEPHONE: +353 1 678 7000 FAX: +353 I 678 7004 DX 53 DUBLIN.
E-MAIL: info@ivorfiizpatrick.ie website: Www.ivortitzpatrick.ic

Mary Cummins 22 January 2002

Solicitor to the Inspectors
3rd Floor
Trident House Our ref : DC_SEC266
Blackrock Yourref : C/K09&C/S02
Co. Dublin Direct Fax : 661 3555

BY FAX: 2833929

Re: Our Clients - James Sweeney and Terry Kennedy - JB Agencies Limited

Dear Sirs,

We refer to previous correspondence in this matter and make the following Submission in
respect of your draft preliminary conclusions:-

The evidence adduced does not allow for a definitive conclusion as set out in the Inspectors
preliminary conclusions. The Inspectors are of the view that JB Agencies Limited is a client
of Ansbacher together with the company called Blue Jeans Limited. There should not be a
conclusion that JB Agencies Limited is a client of Ansbacher. JB Agcncies Limited has no
knowledge of GMCT Limited and never had such knowledge and does not accept that it was
a client of Ansbacher. JB Agencies Limited had a business relationship with a company
called Blue Jeans Limited. As far as JB Agencies Limited was concerned its banking
relationship is with Guinness & Mahon Limited, 17 College Green.

The existence of the letter of the 12 th January 1988 is not relevant to the issue in so far as JB
Agencies Limited is concerned. They are not the authors of the letter, they did not authorise
same and it was not addressed to them. Whatever relationship Messrs. Blue Jeans Limited
had with Guinness and Mahon or any accounts, which it may have had with it are not a
matter for concern of JB Agencies Limited. Having said that the form of the letter is highly
unusual in that it is not on the notepaper used by Blue Jeans Limited and it is not known
when the name Blue Jeans Limited was actually typed onto the letter and is of different type
to the rest of the letter and would clearly have been done at a different time to the rest of the
letter.

Another document also relied upon by the Inspectors is an internal GMI credit memo dated
27 th of August 1988. The Inspectors have concluded that the author of the document in GMI

Jennifer Slunden. Deirdre Courtney, Ivor Fitzpatrick, Cormac Gordon. John King, Mary-Claire Morkty, Bernard McEvoy, Michael J. O'Connor, Margaret Scully. SuS»o R. Stapleton.
John Burke, Karen Hickey Dwyer, Susan Fenton, Ita Guilfoylc, Edel Kirley. Lorna McAullffe,
Tflona Molloy. Dympna Murphy. Orlaith O'Brien, Lisa Richardson, Milan Schuster.
22/01 '02 TUE 12:04 FAX 00 IVOR FITZPATRICK @00

thought that JB Agencies Limited beneficially owned the deposit of Blue Jeans Limited. This
conclusion cannot be arrived at and does not arise from the document in question.

In summary the Inspectors have reached a conclusion that JB Agencies Limited was a client
of Ansbacher. JB Agencies Limited never had any dealings with Ansbacher and did its
banking with Guinness & Mahon of 17 College Green. Mr. Sweeney & Mr. Kennedy of JB
Agencies Limited were not aware of the connection between Guinness & Mahon Limited and
Ansbacher. The Inspectors should not reach a conclusion for which there is no evidence that
JB Agencies Limited is a "client" of Ansbacher.

Yours faithfully,
IVOR FITZPATRICK & CO,

IVOR FITZPATRICK & CO

Appendix XV (144) Mr Ray Carroll
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Ray Carroll.

a) Transcript of evidence of Mr Ray Carroll dated 13 February 2001.

b) Guinness and Mahon credit memo of 11 August 1988.

c) Letter of 24 December 1986 - MJ Pender to BA Ursell.

d) Appendix 10 of Central Bank report on Guinness and Mahon at 30 April

1978.

e) Guinness and Mahon statement of 20 January 1986 re GMCT/College re.

Sumac.

f) Guinness and Mahon statement of 31 March 1980 re Guinness Mahon

Guernsey Limited.

g) Internal IIB minute re credit application of Murray Group Holdings of 3

February 1989.

h) Letter of 11 November 1988 - IIB to KPMG Stokes Kennedy Crowley.

i) Letter of 23 July 1993 - Mr Ray Carroll to IIB.

j) Letter of request for information from KPMG Stokes Kennedy Crowley to

IIB dated 31 December 1992.

k) Letter of 11 November 1988 - IIB to KPMG Stokes Kennedy Crowley.

1) Letter and attachments of 12 October 1987 - GMCT to Guinness and

Mahon.
Appendix XV (144) (1) (a)
PRIVATE EXAMINATION OF MR. RAY CARROLL

UNDER OATH

ON TUESDAY, 13TH FEBRUARY 2001

I hereby certify the

following to be a true and

accurate transcript of my

shorthand notes in the

above named interview.

Stenographer
 PRESENT

The Inspectors: HIS HONOUR JUDGE SEAN 0'LEARY

MS. NOREEN MACKEY BL

Solicitor to the Inspectors: MS. M. CUMMINS

Interviewee: MR. RAY CARROLL

 I N D E X

WITNESS EXAMINATION

MR. R. CARROLL JUDGE 0'LEARY

 1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,

2 13TH FEBRUARY 2001:

5 JUDGE O'LEARY: My name is Sean O'Leary.

6 I am one of the

7 Inspectors; all right?

8 MR. CARROLL: Yes, sure.

9 JUDGE O'LEARY: And this is Noreen Mackey.

10 She is another one of the

11 Inspectors.

12 MR. CARROLL: Okay.

13 JUDGE O'LEARY: We are the two Inspectors

14 that are considering this

15 small aspect of it and it is a small aspect of the

16 thing. It is not a major aspect of the thing.

17 We have a number of questions to ask you and it

18 will be very informal and it should not be lengthy.

19 The only formality in it really is the taking of

20 the oath because we are required to have the matters

21 under oath. If you would take the oath we will ask

22 you the questions then?

23

24

25

26

27

28

29

4
 1 MR. RAY CARROLL, HAVING BEEN SWORN, WAS EXAMINED BY

2 HIS HONOUR JUDGE O'LEARY AS FOLLOWS:

5 1 Q. JUDGE O'LEARY: Mr. Carroll, could I first

6 of all thank you very much

7 for coming. This is, as I say, a reasonably

8 informal procedure. We are gathering information

9 about a particular company and you know the name

10 of that company. It is "Ansbacher" and it has had

11 various other names in the past and I know that you

12 felt, according to the letter which you sent to us,

13 that you had nothing to do with that company.

14

15 Unfortunately, we have found that quite a number

16 of people who genuinely believed they had nothing

17 to do with the company actually had something to do

18 with the company even though they might not have

19 known it. We have to enquire of these people

20 whether they were clients of "Ansbacher" because

21 that is one of the things we have to report to the

22 Court.

23

24 We are not inquiring into your personal affairs.

25 We are not inquiring into your tax affairs. That

26 is nothing to do with us. We are merely fulfilling

27 our duty to the High Court by reporting on the

28 company and its activities and finding out who the

29 customers of the company were.

5
 2 I think you come into the picture because I think

3 you were employed by, and indeed had some interest

4 in, the Murray Group at one stage; is that correct?

5 A. That is right, yes.

6 2 Q. And what was your position in the Group,

7 Mr. Carroll?

8 A. I joined the Group in 1953.

9 3 Q. Yes?

10 A. I had been a qualified accountant and I had

11 been an Audit Assistant with a couple of companies.

12 4 Q. Yes?

13 A. And I went in as an accountant I suppose.

14 5 Q. Yes?

15 A. And I became Financial Director some time in

16 the 1960's.

17 6 Q. Yes?

18 A. I haven't got the precise date.

19 7 Q. Yes?

20 A. And then I became Chief Executive in 1977 until

21 1991.

22 8 Q. Yes?

23 A. And I resigned in 1995.

24 9 Q. Yes?

25 A. The 30th June 1995.

26 10 Q. Yes?

27 A. And I resigned all Directorships.

28 11 Q. Yes, I understand?

29 A. And I did have a shareholding in the Group, which

6
 1 was 9%.

2 12 Q. Yes?

3 A. Which had been acquired in the 1960's.

4 13 Q. Yes?

5 A. And that was purchased by the Group in 1993.

6 14 Q. From you, yes?

7 A. So, that is it.

8 15 Q. And your exit from the Group was part of the normal

9 retirement process?

10 A. Yes.

11 16 Q. That would be the best of way of describing it?

12 A. Yes, yes.

13 17 Q. Yes. I think, if you like, you acted as Chief

14 Executive and you acted as an important cog in

15 the wheel of the company during the period of

16 time in which the older generation were in charge,

17 if I could put it like that; is that correct? The

18 Mr. Murray that is now dead?

19 A. Yes.

20 18 Q. Yes. He died. When did he die?

21 A. He died in 1995.

22 19 Q. Before you retired any way I think; was it not?

23 A. No, no.

24 20 Q. Was it after you retired?

25 A. Yes, it was after I retired.

26 21 Q. After you retired. I see, yes. 1994; was it?

27 A. I will get it for you now.

28 22 Q. That is grand. I think it was 1994; all right?

29 A. Okay, Judge.

7
 1 23 Q. Did your company -- I am talking about the company

2 now only because -- not because I want to go into

3 the details of the company with you; I do not. I

4 have already spoken to Mr. Harold Murray about that.

5 So, you need not worry about the company too much?

6 A. Yes.

7 24 Q. However, the company had a business relationship

8 with Guinness & Mahon; is that correct?

9 A. They had, yes.

10 25 Q. Yes?

11 A. If I could just go back on what you said?

12 26 Q. Yes?

13 A. He died in January 1995.

14 27 Q. January 1995?

15 A. Yes.

16 28 Q. Was it as late as that in fact?

17 A. Yes, yes.

18 29 Q. Thank you. The company had a business relationship

19 with Guinness & Mahon. How did that come about;

20 that business relationship?

21 A. Well, the Group used to borrow funds from all the

22 various financial institutions.

23 30 Q. Yes?

24 A. And amongst them was Guinness & Mahon.

25 31 Q. Yes. Were Guinness & Mahon, if you like, the

26 principal bankers of the Group?

27 A. No.

28 32 Q. Not really, no?

29 A. They weren't, no. We dealt with the Bank of Ireland

8
 1 all the time.

2 33 Q. Yes?

3 A. And we dealt with UDT very substantially in

4 the earlier days.

5 34 Q. Yes?

6 A. And after that Ford Motor Credit. May be

7 Lombard & Ulster.

8 35 Q. Yes?

9 A. That is it.

10 36 Q. Yes?

11 A. They were the main bankers, yes.

12 37 Q. Do you remember in 1974 when Mr. Harold F Murray

13 established a Trust called the Woodward Trust?

14 A. Yes, yes.

15 38 Q. You remember that?

16 A. I do, yes. I remember that.

17 39 Q. Yes. I knew that was established?

18 A. Although, if I could say, my memory doesn't go

19 back clearly to 30 years ago or whatever it was.

20 40 Q. No. You can take it that I know that the Trust

21 was established any way?

22 A. But you kind of...(INTERJECTION).

23 41 Q. Yes?

24 A. In fact when I knew I was coming here you research

25 and you kind of rack your memory to say, "Well, what

26 happened on all these occasions?"

27 42 Q. Yes?

28 A. And, yes, certainly.

29 43 Q. Yes?

9
 1 A. Yes, I remember that.

2 44 Q. You remember all that?

3 A. Because it arose because properties within the

4 Group were sold and there were kind of windfalls

5 for the company.

6 45 Q. Yes?

7 A. Because they didn't come in the normal routine of

8 business. There were properties in Haddington Road

9 which were used for parking cars, car maintenance

10 and the funeral business.

11 46 Q. Yes?

12 A. And then Esmonde Motors operated from Serpentine

13 Avenue and that arose quite unexpectedly because

14 AIB were buying up all the land around there.

15 47 Q. All the land, yes.

16 A. Yes.

17 48 Q. They were little windfalls that he put aside in

18 the Woodward Trust?

19 A. Yes.

20 49 Q. And I am not criticising him in any way about the

21 Woodward Trust. I am just saying as a fact that

22 it was established?

23 A. Yes.

24 50 Q. Who were the beneficiaries of that Trust?

25 Do you know who the beneficiaries were?

26 A. The beneficiaries of the Trust? No.

27 51 Q. If you do not know say so?

28 A. I don't know is what I am saying.

29 52 Q. Were you one of the potential beneficiaries

10
 1 yourself?

2 A. I was because -- yes. I am not sure I was

3 mentioned specifically as a beneficiary.

4 53 Q. I understand that?

5 A. Yes.

6 54 Q. However, we are not talking about, I am not talking

7 about, the pieces of paper now?

8 A. Okay.

9 55 Q. I am talking about the reality of the situation?

10 A. Yes.

11 56 Q. I am not saying you ever got anything out of it.

12 That is a different matter altogether?

13 A. Yes.

14 57 Q. Which I am not particularly interested in?

15 A. Yes.

16 58 Q. However, at the time you understood that you

17 had some interest in it, which reflected your

18 shareholding in the company; is that it?

19 A. Yes, yes.

20 59 Q. So if you had a 9% interest in the company?

21 A. That is right, yes.

22 60 Q. You had a 9% interest in the Trust?

23 A. Yes.

24 61 Q. How that was expressed at a later stage is another

25 matter?

26 A. Yes, yes.

27 62 Q. Which we are probably not going to go into at all.

28 Would that be a fair summary of the position?

29 A. Yes, the reason...(INTERJECTION).

11
 1 63 Q. If it is not now tell me it is not, you know?

2 A. No. He set up a Discretionary Trust.

3 64 Q. Yes?

4 A. I mean these were very popular at the time.

5 65 Q. Yes?

6 A. I think they probably still are.

7 66 Q. Yes?

8 A. Discretionary Trusts.

9 67 Q. Yes?

10 A. But the reason he did it was because this money --

11 it was a windfall that came in. It wasn't in the

12 normal course of business.

13 68 Q. Yes?

14 A. And I mean I know the reasons that the money went

15 there; because the business had been going through

16 a fairly difficult time.

17 69 Q. Yes?

18 A. The Murrays had lost the Hertz franchise.

19 70 Q. Yes?

20 A. Not through their own fault but because Hertz

21 wanted to buy out the business from Mr. Murray

22 and he didn't want to do that.

23 71 Q. Yes?

24 A. And then there was an oil crisis and then there

25 was serious talk of devaluation and there was

26 quite a lot of talk about Wealth Taxes, Capital

27 Taxes.

28 72 Q. Yes. So that was the reason?

29 A. It was for all these reasons.

12
 1 73 Q. I understand that?

2 A. And he was advised by financial advisors.

3 74 Q. Yes?

4 A. That this was a good thing to do and it

5 was...(INTERJECTION).

6 75 Q. And who actually established the Trust for him?

7 Who was, if you like, the organiser of it?

8 A. Well, it was set up because of advice that he got

9 from Stokes Kennedy Crowley.

10 76 Q. Yes?

11 A. And presumably Guinness & Mahon were involved as

12 well.

13 77 Q. Yes, Guinness & Mahon as well. Was he dealing

14 with Guinness & Mahon at that stage?

15 A. He was in the sense that these properties were

16 realized in 1973.

17 78 Q. Yes?

18 A. They didn't come together but it was just they

19 occurred reasonably close to one another.

20 79 Q. Yes?

21 A. I think it was the middle of 1973 and may be a

22 month or so later. That was just a coincidence.

23 So, he had the money. He deposited the money

24 with Guinness & Mahon in Dublin.

25 80 Q. And ultimately put it into a Trust?

26 A. Yes.

27 81 Q. Where was that Trust located; do you know?

28 A. It was in Jersey.

29 82 Q. In Jersey?

13
 1 A. Yes.

2 83 Q. Yes. It was not in the Cayman Islands?

3 A. No, no.

4 84 Q. Yes, all right. After that time I presume from

5 time to time it became necessary for the company

6 to borrow money?

7 A. Yes, the company relied heavily on borrowings.

8 85 Q. On borrowings, yes?

9 A. Because the main business at that time was the car

10 rental business and that relied on...(INTERJECTION).

11 8 6 Q. Do you remember that at that time loans were got

12 from Guinness & Mahon for various business purposes?

13 A. Yes, yes.

14 87 Q. Do you remember that they were guaranteed by

15 individuals and by the company and also by backing

16 deposits from the Trust?

17 A. No.

18 88 Q. You do not remember that at all?

19 A. I do remember that they weren't back to back.

20 89 Q. They were not back to back?

21 A. No.

22 90 Q. At any stage?

23 A. No, the reason for that is that it was a

24 Discretionary Trust and it was -- the money was

25 transferred through this Trust onto the Settlor;

26 this guy Woodward.

27 91 Q. Yes?

28 A. And it was managed by Guinness Mahon Jersey Limited.

29 92 Q. Yes?

14
 1 A. And they were the Trustees.

2 93 Q. I see?

3 A. And H. F. Murray had effectively transferred

4 ownership of that money into this Trust. So, it

5 is like all these Trusts; he relied therefore on --

6 it was gone out of his control.

7 94 Q. Out of his control?

8 A. Yes .

9 95 Q. Yes. Of course I understand that is the theory of

10 it?

11 A. So, the Trust -- unless they got authorization from

12 H. F. Murray -- who probably had because of Letters

13 of Wishes and so on -- he relied on the Trustees

14 then to carry those out, those wishes out, because

15 effectively he had lost control of these funds.

16 96 Q. I see?

17 A. So, unless he gave authorisation they couldn't

18 have a back-to-back arrangement.

19 97 Q. I see?

20 A. And he didn't.

21 98 Q. I see. Well... (INTERJECTION)?

22 A. And...(INTERJECTION).

23 99 Q. Could I first of all explain to you, Mr. Carroll,

24 that Guinness & Mahon have told us that during the

25 1970's and 1980's, during almost all of that period,

26 they had internal documentation?

27 A. Yes .

28 100 Q. Not necessarily dealing with your company?

29 A. Yes .
 1 101 Q. However, dealing with many other companies?

2 A. Yes.

3 102 Q. Where they advanced money and it was backed by

4 funds?

5 A. By, sorry?

6 103 Q. Funds from abroad?

7 A. Oh, yes.

8 104 Q. It was backed by funds from abroad?

9 A. Yes, yes, yes.

10 105 Q. They used a code in their documentation?

11 A. Yes, yes.

12 106 Q. Which said that it was...(INTERJECTION)?

13 A. I know the code.

14 107 Q. "Adequately secured"?

15 A. Yes.

16 108 Q. Or "considered adequate"?

17 A. Yes.

18 109 Q. Security "considered adequate"?

19 A. Yes, or "considered suitably secured".

20 110 Q. Considered...(INTERJECTION).

21 A. Suitably.

22 111 Q. Suitably?

23 A. Suitably secured.

24 112 Q. "Suitably secured"?

25 A. Yes.

26 113 Q. Yes?

27 A. We had all that out with Guinness & Mahon because

28 this all arose about two years ago.

29 114 Q. Yes?

16
 1 A. Now, I wasn't in the company but I became

2 involved because I had been involved.

3 115 Q. Yes. What I want to show you now...(INTERJECTION)?

4 A. Around the time.

5 116 Q. I want to show you an internal memo from

6 Guinness & Mahon?

7 A. Yes. Well...(INTERJECTION).

8 117 Q. Which deals with that letter?

9 A. Yes. Well, we had to lot of dealings with --

10 I mean I call the Irish Permanent Guinness & Mahon,

11 you know, and I often wonder where Irish

12 Permanent/Guinness & Mahon stand in all of

13 this but...(INTERJECTION).

14 118 Q. They have to answer for their own situation?

15 A. I know they do.

16 119 Q. For their situation?

17 A. But it makes you wonder because they are responsible

18 for all of this as far as I can see but I have a

19 letter from the Irish Permanent at one stage, and it

20 is some time in the last year or so, and they say

21 quite specifically that there was no, how did they

22 put it, assignment of funds or a letter assigning

23 the funds to back any loans.

24 120 Q. Yes?

25 A. So, that is quite specific.

26 121 Q. I see. You might give us that, a copy of that

27 letter, if you have it?

28 A. Yes .

29 122 Q. I wonder would you show Mr. Carroll number 241,

 1 Exhibit 1, page 241 (Same Handed)?

2 A. The other thing about it, Judge, is that

3 Guinness & Mahon were quite anxious, keen or

4 willing, to lend funds.

5 123 Q. I understand that, of course?

6 A. So, we didn't need these other funds or Mr. Murray

7 we didn't need these other funds to borrow funds

8 and in fact we, the Group, bought a property out

9 in Glenageary, I think it was £300,000, some time

10 may be in the late 1970's or early 1980's and it

11 was Guinness & Mahon who funded that and they

12 also funded significant letters of guarantee

13 for Ford Motor Credit and the Bank of Ireland

14 for insurance premiums; for payment of insurance

15 premiums.

16 124 Q. Yes. Well, now...(INTERJECTION)?

17 A. So, in other words there was a credit facility

18 there.

19 125 Q. However, Mr. Carroll, if you have an accountancy

20 background which you tell me...(INTERJECTION)?

21 A. Sorry?

22 126 Q. If you have an accountancy background?

23 A. Yes .

24 127 Q. Which you tell me you have?

25 A. Yes .

26 128 Q. As indeed I have myself; ever before I was a lawyer?

27 A. Yes, certainly, yes.

28 129 Q. You will be well aware that banks will never

29 refuse a second or third backing for their loans?

18
 1 A. That is it, yes. That is it. They

2 take...(INTERJECTION).

3 130 Q. If they can take it?

4 A. They take everything.

5 131 Q. They take everything they can get?

6 A. Yes, yes.

7 132 Q. All right. If you look at "GMI", Exhibit 1?

8 A. I see it there.

9 133 Q. Do you see that there?

10 A. Yes.

11 134 Q. This is only one of a number of ones?

12 A. Right, right.

13 135 Q.

14
"Security considered adequate"
15

16

17 A. Yes.

18 136 Q. Can you see under "Security" there?

19 A. I do.

20 137 Q. You can take it that there are many other examples

21 of that?

22 A. Yes.

23 138 Q. I am going to give you one other example; number 243

24 (Same Handed), Exhibit 2?

25 A. I have asked a number of -- I mean I am aware of

26 this.

27 139 Q. Yes?

28 A. And I asked a number of bankers what does that mean.

29 140 Q. Yes?

19
 1 A. And they certainly didn't say that it meant

2 back-to-back funds.

3 141 Q. I understand that. I understand that but this

4 is what we were told by Guinness & Mahon?

5 A. Yes.

6 142 Q. At the moment I am not saying whether I believe

7 them or not?

8 A. But... (INTERJECTION) .

9 143 Q. However, that is what they tell us?

10 A. Who in Guinness & Mahon says that?

11 144 Q. All right?

12 A. I mean...(INTERJECTION).

13 145 Q. All right?

14 A. This is the Irish Permanent.

15 146 Q. Yes, I see?

16 A. Well, I don't know.

17 147 Q. Would you look at the document which you have there.

18 Is it number — 2 4 what?

19 A. 242.

20 148 Q. 242 and 243, Exhibit 2?

21 A. Yes.

22 149 Q. This is a list dated 24th December 1988 of various

23 companies and individuals, which have been blanked

24 out of the copy that you have leaving only the one

25 that is relevant to you in it, which shows that at

26 that time there was backing deposits in respect of

27 the borrowings of the Murray Group. I

28 think...(INTERJECTION)?

29 A.

20
 2 "We hold backing deposits from GMCT"

4 but we never heard of GMCT so --

5 150 Q. Yes. We will come back to that. Forget that

6 aspect of the thing for the moment?

7 A. Yes.

8 151 Q. Forget GMCT for the moment?

9 A. Right.

10 152 Q. Have you any comment to make on that; somebody

11 in 1988 said your borrowings were secured by backing

12 deposits? Forget for the moment where they were

13 from?

14 A. Yes.

15 153 Q. Have you any comment to make on that?

16 A. I have, yes.

17 154 Q. What is it?

18 A. I think it is incorrect.

19 155 Q. You think it is incorrect?

20 A. Yes.

21 156 Q. All right, I understand?

22 A. I think they felt they -- if you want to elaborate

23 a little bit: They probably had the comfort of

24 knowing that these deposits were there, which were

25 controlled by Mr. H. F. Murray or indirectly

26 controlled by him but they really weren't under

27 his control legally so...(INTERJECTION).

28 157 Q. You see...(INTERJECTION)?

29 A. So they had the comfort...(INTERJECTION).

21
 1 158 Q. As you would appreciate?

2 A. But they didn't have the back to

3 back...(INTERJECTION).

4 159 Q. Mr. Carroll, they were either controlled by him

5 or they were not controlled by him and which do

6 you say?

7 A. I said legally they weren't controlled by him.

8 160 Q. Yes. However, from a practical viewpoint could

9 he get his hands on it if he wanted it?

10 A. I suppose, yes, but he had to rely on the goodwill

11 of the Trustees.

12 161 Q. Yes, I understand that?

13 A. Yes.

14 162 Q. I understand that?

15 A. Yes.

16 163 Q. I understand that. Would you show Mr. Carroll

17 number 246 as well (Same Handed)? This is

18 a 1978 document, Exhibit 3?

19 A. Yes.

20 164 Q. And it shows precisely the same thing really but

21 I am just showing it to you as a different document

22 at a different time?

23 A. Yes.

24 165 Q. Yes. Did you know the name, Mr. Carroll, of the

25 company which was the operational company of the

26 Trust?

27 A. Yes.

28 166 Q. It was -- what was its name?

29 A. Well, when I say I knew I was aware of it. I

22
 1 mightn't have been aware of it quite at the time.

2 167 Q. Yes?

3 A. But I know from the bit of research I have done.

4 168 Q. Yes?

5 A. That the funds went out to this -- the Settlor

6 was this guy Woodward and he lent the funds

7 interest free to Sumac and Sumac was

8 the...(INTERJECTION).

9 169 Q. The operating company?

10 A. Was the operating company used by the Trustees

11 for...(INTERJECTION).

12 170 Q. Which I think was the normal practice that was

13 used for these things?

14 A. Yes, for investing the funds, yes.

15 171 Q. All right. In those circumstances would you show

16 Mr. Carroll number 250 (Same Handed)? Do you see

17 that, Exhibit 4?

18 A. Yes .

19 172 Q. Here we come to, if you like, the Cayman Island

20 connection; all right?

21 A. Right.

22 173 Q. You see that this is a statement of Guinness & Mahon

23 in Dublin?

24 A. Yes .

25 174 Q. And I think it deals with the year 1986 but it is

26 just a typical year. There is nothing particularly

27 significant about 1986. You can see that there

28 was an amount of money on deposit, which I think

29 was approximately £1.4 million.

23
 1 MS. MACKEY: Deutchmarks.

2 175 Q. JUDGE O'LEARY: Deutchmarks I should

3 say?

4 A. Yes.

5 176 Q. And you can see that the reference on the

6 second typed line is:

8 "RE SUMAC"

10 A. Yes.

11 177 Q. Apparently what happened is that Sumac invested

12 the money through the Cayman Islands?

13 A. Yes.

14 178 Q. Do you understand what I mean?

15 A. I do, yes.

16 179 Q. Yes. Have you any comment to make on that?

17 A. Well, yes, I have. Its Guinness & Mahon and it

18 is an internal document. It goes to Guinness Mahon

19 Cayman Trust/College, Re Sumac. So, it is an

20 internal document and I have never seen that,

21 Exhibit 4, so...(INTERJECTION).

22 180 Q. I am not suggesting for a moment you have?

23 A. Yes, I understand what it says.

24 181 Q. You understand what it says?

25 A. Yes.

26 182 Q. All right?

27 A. I mean Mr. Murray wasn't aware of that account

28 being with Guinness & Mahon.

29 183 Q. I do not know what Mr. Murray was aware of really.

24
 1 Do you mean the deceased Mr. Murray; is it?

2 A. Yes .

3 184 Q. Well...(INTERJECTION)?

4 A. Well, I can say with confidence that he never

5 heard of "Ansbacher".

6 185 Q. Yes?

7 A. And incidently I never heard of "Ansbacher", which

8 you might find surprising, but I only heard of it

9 when -- somewhere around the McCracken thing.

10 186 Q. I see?

11 A. And my initial reaction was, "Oh, that is --"

12 the only Ansbacher I ever heard of was -- there

13 was an Ansbacher private bank which was either on

14 Baggot Street or Leeson Street.

15 187 Q. Yes?

16 A. And I thought, "God, this is --" so, I thought,

17 "This bank is Ansbacher. It is the only one I know

18 of," but of course it wasn't but that is absolutely

19 what I -- but that bank was taken over by

20 Woodchester. I -- you know I just subsequently

21 heard.

22 188 Q. Yes. Do you remember then that some time later

23 the borrowings which had been from time to time

24 negotiated with Guinness & Mahon were in the

25 process of being transferred to IIB?

26 A. Yes .

27 189 Q. Do you remember that?

28 A. I do, yes.

29 190 Q. Do you remember the negotiations that took place

25
 1 with regard to that?

2 A. With IIB?

3 191 Q. Yes?

4 A. Yes. Well, I do to a certain extent, yes, yes.

5 192 Q. Yes. Were you involved in those negotiations?

6 A. Yes, yes. I wasn't -- initially it was arranged

7 by a person from KPMG.

8 193 Q. Yes?

9 A. Who advised us that this facility was available.

10 194 Q. I see?

11 A. And that was the reason that we...(INTERJECTION).

12 195 Q. However, did you go and discuss it with somebody

13 in IIB?

14 A. Yes, yes.

15 196 Q. You would have been the financial man at that stage?

16 A. Yes, yes.

17 197 Q. Who did you discuss it with in IIB?

18 A. I think it was Gerry Quigley.

19 198 Q. Gerry Quigley?

20 A. Yes.

21 199 Q. Yes, that name is familiar to me; Gerry Quigley?

22 A. Yes.

23 200 Q. Fair enough. I will come back to that in a second?

24 A. Yes.

25 201 Q. However, in fairness to you and to make sure that

26 you have all the information I would like you to

27 look at number 178 as well (Same Handed), Exhibit 5.

28 What I am going to do while you are looking at that

29 is I am going to go out and get my glasses because I

26
 1 am straining my eyes trying to see these things?

2 A. Right.

3 202 Q. Mr. Carroll, before moving on from Guinness & Mahon

4 I want to bring to your attention that here is a

5 statement of Guinness & Mahon like the other

6 document I gave you, Exhibit 5. It is actually not

7 an internal document. It is an external document.

8 You may not be the recipient of the document but it

9 is an external document. What it is is a statement

10 by Guinness & Mahon of their account which they

11 held, which a customer of their's held, and that

12 customer was Guinness Mahon Guernsey Ltd?

13 A. Yes .

14 203 Q. You see that?

15 A. Yes .

16 204 Q. And you see that various transactions took place

17 which appear to be payments out and there are

18 four in number. One is to H. F. Murray College

19 Trustees Jessica Trust of £91,100. The second to

20 H.T. Murray of £81,990. The next to A. P. Murray as

21 per College Trustees as Trustees of the Bianca Trust

22 of £91,100. The second one was the Delisle Trust;

23 D-e-l-i-s-l-e Trust. Lastly, £50,000 to

24 Ray Carroll per College Trustees as Trustees for

25 the Cordier Trust. Do you remember these

26 transactions ?

27 A. Yes. I suppose the answer is "yes". I mean I

28 don't zone in on them absolutely specifically but

29 I do remember them, yes.

27
 1 205 Q. Yes. Was it money distributed out of the fund or

2 something?

3 A. Yes.

4 206 Q. To each of the four of you?

5 A. That is right.

6 207 Q. All right. The late Mr. Harold Murray got £91,100.

7 Young Mr. Murray got £81,990, even though he is not

8 so young now?

9 A. No.

10 208 Q.

11

12 "A. P. Murray"

13

14 who is A. P. Murray?

15 A. That is Mr. H. F. Murray's wife.

16 209 Q. Wife, yes?

17 A. Yes.

18 210 Q. Mrs. Murray?

19 A. Yes.

20 211 Q. Yes, and yourself. You got £50,000?

21 A. Yes.

22 212 Q. Representing presumably the fact that you had

23 a lesser interest in the fund, if you like,

24 than them?

25 A. Yes.

26 213 Q. Presumably that is what it was but if there

27 was another reason for it let me know?

28 A. I mean that is the reason, yes, as you say but

29 I know the £50,000 that is down there for me --

28
 1 it arose because I had a loan with the company

2 and £30,000 of that went directly into the company

3 I didn't receive it. I mean I did I suppose as

4 a credit in that...(INTERJECTION).

5 214 Q. I understand?

6 A. And the balance I got directly into my own account

7 215 Q. However, as I said to you at the start we are not

8 really interested in your private affairs?

9 A. Okay.

10 216 Q. It is not really our problem?

11 A. Okay.

12 217 Q. What we are interested in is this you see: If

13 we have established to our satisfaction, if we

14 have established and obviously we have to think

15 about this, that the company Sumac and, if you

16 like, the Trust were clients of "Ansbacher"?

17 A. Yes .

18 218 Q. Even though they did not know it, as you said?

19 A. Yes .

20 219 Q. That the money had been diverted through them?

21 A. Well, I...(INTERJECTION).

22 220 Q. We may then have to go on and consider whether

23 the four beneficiaries were themselves clients of

24 "Ansbacher"?

25 A. Yes .

26 221 Q. Can you see the problem which we are faced with?

27 That is where we are coming from?

28 A. I can understand where you are coming from but

29 I would see it totally different.

 1 222 Q. Of course?

2 A. That is made out to -- I think in contrast to

3 the previous one you showed me it is made out to

4 Guinness Mahon Guernsey Ltd. I think there is some

5 significance in that because if this one appears

6 accurate, and I can't dispute it, it is made out

7 to G M Cayman. They must have -- Okay, I mean

8 it seems to be fairly obvious that Guinness Mahon

9 used these funds in a different manner to what

10 certainly H. F. Murray was aware of but it must

11 have been after that date because...(INTERJECTION).

12 223 Q. I think you can take it as definite that we will

13 note carefully that fact; that you do not appear

14 to have been, and you are not meek in this -- to

15 have had any knowledge that the funds were being

16 funnelled through Cayman; do you understand?

17 A. Yes .

18 224 Q. However, the fact is they were funnelled from Cayman

19 whether we like it or not. Not this £50,000; that

20 is a different matter altogether?

21 A. Yes .

22 225 Q. However, do you see and we will take a note of that,

23 a careful note?

24 A. That was later. I presume is was later on.

25 226 Q. Yes, I understand that?

26 A. And we...(INTERJECTION).

27 227 Q. However, Mr. Carroll, so as I can put the matter

28 fully in context so you understand that matter

29 fully: I am not saying that £50,000 means you are

30
 1 a client of "Ansbacher"?

2 A. Oh, I know that.

3 228 Q. I am saying that the £50,000 means that you are

4 one of the real beneficiaries of the Trust?

5 A. Yes.

6 229 Q. And if you are one of the real beneficiaries of

7 the Trust and if the Trust was a client of

8 "Ansbacher" does that make you a client of

9 "Ansbacher"?

10 A. Yes.

11 230 Q. Not because of this £50,000 but because you were

12 one of the real beneficiaries of the Trust.

13 Can you see the point I am making?

14 A. I am sure there is a logic in that but I have to

15 come back to it: The Trust was never aware or at

16 least the beneficiaries -- well, I suppose

17 then...(INTERJECTION).

18 231 Q. However, the beneficiaries we will call them?

19 A. I suppose the beneficiaries therefore were never

20 aware.

21 232 Q. Yes?

22 A. But presumably the Trustees themselves were aware.

23 233 Q. Yes, I understand?

24 A. Because they were able to use these funds.

25 234 Q. I think I understand that all?

26 A. Yes.

27 235 Q. And really the purpose of this is to understand it?

28 A. Right.

29 236 Q. Could I leave now Guinness Mahon behind and

31
 1 hopefully it will not be necessary to refer to

2 them again? I am coming to this IIB situation.

3 You see what surprises me, Mr. Carroll, about the

4 situation is that you say that Guinness & Mahon

5 had the comfort of the back-to-back facility?

6 A. Well...(INTERJECTION).

7 237 Q. Almost without your knowledge; we will put it

8 like that. Is that a fair summary of the position?

9 You did not authorise it and you do not believe

10 Mr. Murray senior authorised it?

11 A. That is correct, yes.

12 238 Q. And they are the only two people who could have

13 authorised it really?

14 A. That is right.

15 239 Q. Because you were running the show at that stage?

16 A. Yes .

17 240 Q. And that is the reality?

18 A. I couldn't -- I personally couldn't have authorised

19 it without Mr. Murray.

20 241 Q. I know. However, you could have initiated the

21 process to do it?

22 A. Right.

23 242 Q. Yes?

24 A. Without H. F. Murray's authorisation, yes.

25 243 Q. Yes, precisely. I understand that?

26 A. Authorisation.

27 244 Q. I understand the way it would have worked. If

28 you wanted that to be done you would have had to

29 go and check it with the boss?

 1 A. Yes .

2 245 Q. I understand. It however makes it a little bit

3 hard to accept that when you consider the terms of

4 an internal IIB document which exists at the time

5 of your loan application and that is at page 188

6 to 191, Exhibit 6. I am not sure whether 192 is

7 part of it or not. It is not. It is not relevant

8 to it any way. Give it to the gentleman any way.

9 MS. CUMMINS: Okay.

10 246 Q. JUDGE O'LEARY: Give it to the gentleman;

11 188 to 192 (Same Handed),

12 Exhibit 6. We have got a lot of documentation,

13 Mr. Carroll?

14 A. Yes .

15 247 Q. And this is documentation we got from IIB?

16 A. Yes .

17 248 Q. You are perfectly welcome to read the whole thing

18 but it hardly is necessary. It is their assessment

19 of your situation and I want particularly for you to

20 turn to the second page, which is 189?

21 A. Yes .

22 249 Q. And you see

23

24 "Proposed Security"?

25

26 A. Yes .

27 250 Q.

28

29 "The term loan would be secured for

principal only by a bank guarantee
 1 acceptable to IIB. This will be
provided on behalf of a trust
2 controlled by the shareholders
of the company, who have a deposit
3 of a similar amount."

5 Do you remember offering that to them?

6 A. Yes. I mean that was the terms of the loan; the

7 arrangement I suppose. We transferred the funds

8 out from Guinness & Mahon and...(INTERJECTION).

9 251 Q. Yes, I understand that and that was to be done

10 and I understand that?

11 A. Yes.

12 252 Q. However, it was more than that. I mean it was

13 more than just a transfer of funds. They are saying

14 that the borrowing would be backed by the funds?

15 A. Yes, and that is right.

16 253 Q. Secured by the funds?

17 A. That is right, yes.

18 254 Q. So, their borrowing was to be back-to-back?

19 A. Yes.

20 255 Q. However, was that in -- however, I thought you

21 told me that the Guinness & Mahon borrowing was

22 not back-to-back?

23 A. No, it wasn't.

24 256 Q. So, you say that was a change?

25 A. Yes.

26 257 Q. I see?

27 A. That was because these people looked for it.

28 As you said earlier they look for everything.

29 258 Q. Everything?

34
 1 A. So, they actually got a...(INTERJECTION).

2 259 Q. A back-to-back facility?

3 A. Yes, H. F. Murray gave authority to the Trustees

4 to give, to allow, Kredietbank, where the funds

5 went to, to give a guarantee to IIB. So, that

6 was a definite back-to-back, yes.

7 260 Q. Yes. How did Kredietbank come into the situation?

8 You were borrowing from IIB?

9 A. Yes.

10 261 Q. And Kredietbank is a London bank as far as I know?

11 A. They were a Dutch bank I think but any

12 way...(INTERJECTION).

13 262 Q. A Dutch bank. However, I think they had a London

14 branch?

15 A. Oh, they had, yes.

16 263 Q. I think it was a London branch you were dealing

17 with?

18 A. Yes.

19 264 Q. When I say a London bank?

20 A. Yes.

21 265 Q. I mean a bank in London?

22 A. Yes.

23 266 Q. I do not mean a London organisation?

24 A. Right.

25 267 Q. With a headquarters in London?

26 A. Yes.

27 268 Q. In fact I think they may have some connection

28 with IIB now but I do not think they did at the

29 time?

35
 1 A. Yes.

2 269 Q. They were just kind of friendly with them; is

3 that right?

4 A. Right.

5 270 Q. How did the question of Kredietbank giving the

6 guarantee arise? Why Kredietbank?

7 A. Because the funds were invested with Kredietbank.

8 271 Q. And who suggested that the funds would be invested

9 with Kredietbank so as this guarantee could be

10 given? You did not sit down in wherever your

11 offices were and say, "I know a good bank in

12 London called Kredietbank and I am going to

13 invest it there"?

14 A. No, it was because of the association that IIB

15 had with Kredietbank.

16 272 Q. However, was it IIB suggested it to you? Could

17 anybody else have suggested it?

18 A. Well, that was the way the arrangement was set up,

19 Judge. I can't -- they were very closely linked.

20 273 Q. Yes, I understand that?

21 A. IIB and Kredietbank.

22 274 Q. However, I am pursuing this. This is important.

23 It is nothing, if you like, to do with you at all.

24 This is important for a different reason?

25 A. Yes.

26 275 Q. What I want to find out is: You were moving

27 from Guinness & Mahon, with whom you had a good

28 relationship?

29 A. Yes.

36
 1 276 Q. And there are some very positive things you said

2 in letters we have to them and all that?

3 A. Yes.

4 277 Q. And you were moving to another bank, IIB, and

5 you were giving them back-to-back facilities of

6 one kind or another?

7 A. Yes.

8 278 Q. And that was the agreement?

9 A. Right, yes.

10 279 Q. And I am not criticising it in any way?

11 A. Yes.

12 280 Q. However, apparently the back-to-back facility was,

13 if you like, to be at arms length. You were not

14 putting the money in Dublin?

15 A. No.

16 281 Q. You were putting the money in another bank in

17 England?

18 A. Yes.

19 282 Q. What I am saying to you is: You had no previous

20 business with Kredietbank?

21 A. No.

22 283 Q. You probably did not even hardly know of their

23 existence?

24 A. No.

25 284 Q. So, somebody said to you, "The place to put the

26 money, so as we can arrange this thing, is a place

27 called Kredietbank in London." Who said that to

28 you?

29 A. I can't be absolutely specific but...(INTERJECTION).

37
 1 285 Q. Yes. However, what is your best guess?

2 A. It must be IIB.

3 286 Q. IIB, true. You cannot remember who in IIB?

4 A. Well, the person that I dealt with anyway was

5 Gerry Quigley.

6 287 Q. Gerry Quigley, all right?

7 A. But we didn't or H. F. Murray -- when you say he

8 finished with Guinness & Mahon: Yes, we totally

9 stopped our borrowings from them.

10 288 Q. Yes?

11 A. And because -- why did we leave Guinness & Mahon

12 at all and the reason was that there were some

13 rumours about the solvency of Guinness & Mahon

14 and so forth, that they weren't doing well, and

15 H. F. Murray, again on probably a lot of financial

16 advice, decided that he would request the Trustees

17 to move the money elsewhere.

18 289 Q. Yes, I understand?

19 A. If... (INTERJECTION) .

20 290 Q. And I have no difficulty with that at all?

21 A. So, the money was in -- say Sumac was the

22 company that was investing this money.

23 291 Q. Yes. It was always in Sumac, yes?

24 A. So, he would have told the Trustees to take the

25 money wherever it was.

26 292 Q. Yes?

27 A. And...(INTERJECTION).

28 293 Q. Yes, I understand?

29 A. Put it into Kredietbank.

38
 1 294 Q. He said that?

2 A. And that is what happened.

3 295 Q. However, the fact that it went into Kredietbank

4 was a matter which was suggested, could only have

5 been suggested to you, by IIB?

6 A. That is right, yes.

7 296 Q. Is that a fair summary of the position?

8 A. I think it is, yes.

9 297 Q. All right, fair enough?

10 A. I think it does show also, if you don't mind my

11 saying so, that these funds were now supposed to

12 be out in "Ansbacher".

13 298 Q. Yes?

14 A. But we never had any communication/correspondence.

15 We didn't know there was such a place as "Ansbacher"

16 Cayman without...(INTERJECTION).

17 299 Q. I think you have made that point very forcefully?

18 A. I know but I think this illustrates to some extent

19 that H. F. Murray would simply have dealt with

20 Guinness Mahon Guernsey Ltd, I think they were

21 called then.

22 300 Q. Yes?

23 A. And instructed them or asked them, requested them,

24 to do this. He wasn't going to "Ansbacher" or

25 Guinness & Mahon in Dublin. He never had anything

26 to do with Guinness & Mahon in Dublin other than --

27 he never had -- other than Guinness Mahon in

28 Jersey/Guernsey in dealing with these funds.

29 301 Q. Yes. Are you familiar at all with a man by the

 1 name of Cormac O'Rourke in IIB?

2 A. Yes .

3 302 Q. Yes. In fact if you give Mr. Carroll number 154

4 (Same Handed), Exhibit 7? He in fact sets out the

5 position I think reasonably clearly there.

6 Apparently Mr. Niall 0'Carroll of Stokes Kennedy

7 Crowley, KPMG as they were beginning to be known

8 then, was dealing with your account and in a letter

9 of the 11th November 1988 he sets out what the

10 position is?

11 A. Yes .

12 303 Q. And that seems to confirm the point you made; that

13 the suggestion with regard to Kredietbank in London?

14 A. Yes .

15 304 Q. Came from IIB?

16 A. Yes .

17 305 Q. Is that fair?

18 A. Yes .

19 306 Q. All right, Okay. That is only by way of information

20 to you?

21 A. Yes .

22 307 Q. I really do not want any comment from you. I think

23 in fairness you are entitled to as much information

24 as possible?

25 A. Right.

26 308 Q. Yes. This is a peripheral matter but it is a

27 matter that I may have to refer to in the report

28 and therefore I should put it to you: If you

29 look at page 182 (Same Handed), Exhibit 8?

 1 A. Yes.

2 309 Q. You will see there that that is your letter to

3 the Irish Intercontinental Bank?

4 A. Yes.

5 310 Q. And Item 3 of the letter of Stokes Kennedy Crowley

6 is in fact the nature of the security. Do you have

7 a copy of that there, Exhibit 9. I may not have

8 asked you to get a copy of that?

9 A. Yes.

10 311 Q. Yes. Do you see that; the nature of the security,

11 Exhibit 9?

12 A. Yes.

13 312 Q. It appears that you felt that that should be omitted

14 from the bank's response to Stokes Kennedy Crowley?

15 A. Yes, yes, I am surprised at that letter. I mean it

16 wasn't a big issue any way.

17 313 Q. Yes?

18 A. And what normally happens -- I just am surprised

19 how I could have written that letter, Exhibit 8,

20 because what normally happens is you get these

21 requests which were standard forms from your

22 auditors to sign and they are sending them off

23 to your solicitors, financial institutions and

24 so forth.

25 314 Q. Yes, I know the system?

26 A. And we don't see them after that. They go

27 directly back to the auditors and they deal

28 with them accordingly. So, I am not sure --

29 I can't understand how I would be involved in

41
 1 that but obviously I was.

2 315 Q. Yes?

3 A. But it wasn't a big issue, Judge,

4 and...(INTERJECTION).

5 316 Q. No, I am not making a big issue but I am just

6 bringing it to your attention?

7 A. And, yes.

8 317 Q. That is grand.

9 A. That is about it.

10 318 Q. Mr. Carroll, just one second if you would not mind;

11 I just want to whisper if you do not mind because

12 there may be one thing that I have to ask you about?

13 A. Right.

14 319 Q. You will recall at page 178, Exhibit 5, Mr. Carroll,

15 which is the payment of the £50,000 to you?

16 A. Yes.

17 320 Q. If you might get that?

18 A. 178, yes.

19 321 Q. Yes, 178. There are a number of names there which

20 are new to us, if you like, and they may be nothing

21 at all to do with our situation or they may be but

22 we have to at least run them past you?

23 A. Yes.

24 322 Q. This Cordier Trust: Do you know anything about

25 that?

26 A. No, I don't know anything about that; not about the

27 Cordier Trust, no.

28 323 Q. Did you have a Trust yourself?

29 A. I wasn't aware that I had a Trust any way. I don't

42
 1 have the details of the tax plan that was set up in

2 Jersey originally.

3 324 Q. Yes?

4 A. I mean I have an idea of it but I haven't got a

5 copy.

6 325 Q. However, is it possible that there was the

7 Woodward Trust and there were, if you like,

8 subsidiary Trusts shooting out of that one of

9 which was called the Cordier Trust?

10 A. Yes.

11 326 Q. The Bianca Trust, the Delisle Trust and the

12 Jessica Trust?

13 A. It is possible but I don't know is the answer

14 to that.

15 327 Q. You do not know the answer to that?

16 A. No.

17 328 Q. Did you ever get a payment from a thing called

18 the Cordier Trust?

19 A. No.

20 329 Q. Other than the £50,000 we are talking about

21 here now?

22 A. No, no, no.

23 330 Q. Yes, or does it have any funds at the moment? Do

24 you know anything about that; whether there is in

25 existence something called the Cordier Trust which

26 has funds at the moment?

27 A. No, I wouldn't be aware of it. I mean if those

28 Trusts were there I mean they are obviously --

29 they are as you say sub-trusts or something.

43
 1 331 Q. Yes?

2 A. If they were.

3 332 Q. Yes?

4 A. They are all...(INTERJECTION).

5 333 Q. Have you any interest in it now any way?

6 A. No.

7 334 Q. None at all?

8 A. Not at all.

9 335 Q. Yes?

10 A. But... (INTERJECTION) .

11 336 Q. It is a bit strange, you know?

12 A. Those Trusts were all -- they were all wound up.

13 337 Q. It is a bit strange to have subsidiary Trusts, if

14 you like?

15 A. Yes, yes, yes.

16 338 Q. Did you ever hear of any of the names?

17 A. No.

18 339 Q. Jessica?

19 A. No, no.

20 340 Q. Delisle, Bianca or Cordier?

21 A. No.

22 341 Q. You never heard of them?

23 A. No.

24 342 Q. However, you did hear of Woodward Trust?

25 A. Yes.

26 343 Q. Yes?

27 A. But the Woodward Trust was wound up in, whenever

28 it was, 1993.

29 344 Q. Yes?

44
 1 A. 1993.

2 345 Q. Yes?

3 A. So, if those Trusts did exist they were all --

4 they would have been wound up as well presumably.

5 346 Q. Can I take it that the date in which you took your

6 first loan from IIB was at the end of 1988 or the

7 beginning of 1989?

8 A. Yes, yes.

9 347 Q. Yes. Do you know the precise date by any chance?

10 I have a letter of offer?

11 A. Yes.

12 348 Q. Of the 24th April 1989?

13 A. Yes.

14 349 Q. That may not however ...(INTERJECTION)?

15 A. It was around that time. I think it was May 1989.

16 350 Q. Yes?

17 A. I am not absolutely sure.

18 351 Q. All right. Yes?

19 A. I think it took a while to arrange the thing.

20 352 Q. To arrange, yes?

21 A. I think it started in -- towards the end of 1988.

22 We wanted to get the funds -- well, H. F. Murray

23 wanted to get the funds...(INTERJECTION).

24 353 Q. Do you know by any chance when the money was

25 transferred into Kredietbank?

26 A. It would have been the same time.

27 354 Q. Yes. Would it have been in early 1989 or late

28 1989; that could be an important point? It could

29 be important for us to know what part of 1989 that

45
 1 happened, that occurred?

2 A. It would have been early 1989.

3 355 Q. Early 1989?

4 A. Yes.

5 356 Q. Yes, all right. I am sure IIB will be able to tell

6 us precisely the date of the first loan. They will

7 have that on their records any way. We have a

8 letter of offer?

9 A. Yes.

10 357 Q. However, I do not have the actual draw-down date

11 of the note?

12 A. Yes.

13 358 Q. Do you understand what I mean?

14 A. Yes, yes.

15 359 Q. That is grand. I have no further questions.

16 Ms. Mackey?

17 MS. MACKEY: No, I have none either.

18 Thank you.

19 360 Q. JUDGE 0'LEARY: Mr. Carroll, thank you

20 very much indeed?

21 A. Yes.

22 361 Q. Thank you for your help and assistance and we

23 greatly appreciate it?

24 A. But could I say something? Am I allowed to say

25 anything; no?

26 362 Q. You can say anything you want?

27 A. Yes. I knew -- I got to know obviously the late

28 Mr. Murray, H. F. Murray, very well.

29 363 Q. Yes?

46
 1 A. And I know his family and so forth very well.

2 364 Q. Yes?

3 A. And he was an exceptional man. He started from

4 nothing. He started a hackney business in the

5 1930's. He went into the funeral business during

6 the war to get petrol and so forth and then really

7 hit the jackpot when he started the car rental but

8 he was a very capable person. He was full of ideas

9 and at the same time a very well balanced man and he

10 was always concerned, you know, and very conscious

11 I think of having -- maintaining proper values and

12 standards and this is the type of man he was.

13

14 So, he was a pioneer in the car rental business

15 and in the Irish tourist business. The car rental

16 business -- he was first in the car rental business.

17 He was the first to set up car rental desks at the

18 airports. He was the first to start leasing and so

19 forth and he set up a standard for car rental that

20 was equal to the best international standards and he

21 did that very quickly and it became an integral part

22 of the Irish tourist business.

23

24 He was always involved in the Irish tourist

25 business. He was attending these international

26 conventions even before Bord Failte.

27

28 He promoted things like golf 30 years ago. He set

29 up prizes, pieces of sculpture by John Behan, every

47
 1 year for overseas groups or individuals who

2 contributed most to Irish golf.

4 He was one of the innovators of weekend shopping

5 into Ireland from the UK and which much later was

6 still going on.

8 He carried out promotional tours in the US in

9 difficult years for the Irish Tourist Board at

10 their request, which was done free of charge.

11

12 He made a huge contribution, as I say, to both car

13 rental and the Irish tourist industry. The car

14 rental industry never got any grants. They never

15 got interest free loans. They never received

16 assistance which went to other interests in the

17 tourist industry such as hotels and boats on the

18 Shannon and things like that.

19

20 He built up this very successful business. He

21 employed about 200 people eventually and it is a

22 family business that he had but he -- the fact I

23 think that that business is still going strong

24 after about 70 years I think -- it stands as

25 recognition of what he did in business.

26 365 Q. Yes, that may all be very true, Mr. Carroll?

27 A. Yes.

28 366 Q. However, is it anything to do with our job?

29 A. Well, it has because I will get on to that.

48
 1 I am just trying to paint the picture of the

2 type of person he was.

3 367 Q. Yes?

4 A. He came along and he got these funds, most

5 unexpectedly, from these windfalls and he -- it

6 was due to his financial advisors that he moved

7 this money out of the Country and I just think

8 that it is terribly sad and I think it is

9 absolutely wrong that this man who died whatever,

10 five or six years ago -- that he is being linked

11 and associated with the "Ansbacher" funds and that

12 has happened through I think a terrible breach of

13 confidentiality because these are leaks that have

14 gone to the media and the leaks must have come

15 from either Gerard Ryan's Department, The Tanaiste's

16 Department or the Taoiseach's Department.

17 368 Q. I think I could not get involved in that now?

18 A. I know you couldn't.

19 369 Q. No, no, I am not getting involved in that?

20 A. I know you are not.

21 370 Q. No, no?

22 A. But that is the way it is and why...(INTERJECTION).

23 371 Q. Well, Mr. Carroll...(INTERJECTION)?

24 A. So, I just want to say that.

25 372 Q. No, no. Mr. Carroll, I am going to stop you

26 there for this reason: During the course of our

27 interviews we do not allow people to speak ill

28 of those that are absent?

29 A. Okay.
 1 373 Q. That means I will...(INTERJECTION)?

2 A. I will take that back then.

3 374 Q. Yes?

4 A. I take that back.

5 375 Q. I will not allow you you to speak ill of them?

6 A. Okay.

7 376 Q. However, you can go out the door confident in

8 the knowledge that I will not allow anyone to

9 speak ill of you either?

10 A. Yes. Well, I will take that back.

11 377 Q. Do you understand the point I am making?

12 A. Okay. I will take that back.

13 378 Q. Yes?

14 A. But I will just finish if I could then and say it

15 is dreadful and I think it is wrong and it is sad

16 that he should be associated with these funds which

17 are now linked with scandal; with I suppose tax

18 evasion; money which hasn't been disclosed; and he

19 never even heard of "Ansbacher" and that he should

20 now -- a man who made such a huge contribution to

21 Irish society and I could talk about what he did

22 outside of the business but I will not bore you

23 anymore, Judge, but I just...(INTERJECTION).

24 379 Q. No?

25 A. But I just feel...(INTERJECTION).

26 380 Q. I am highly conscious of the fact...(INTERJECTION)?

27 A. I just feel terribly strong about the whole thing.

28 381 Q. Yes, yes. I am highly conscious of the fact that

29 while I do not mind you speaking well of people?

50
 1 A. Yes.

2 382 Q. I would not allow anybody speak badly of an absent

3 person?

4 A. No, no, I am sorry.

5 383 Q. Whoever the absent person is?

6 A. I am sorry about that.

7 384 Q. Yes?

8 A. But... (INTERJECTION) .

9 385 Q. And you can rest assured that I will not allow

10 anyone speak ill of the late Mr. Murray either?

11 A. Yes.

12 386 Q. His reputation will be as jealously guarded inside

13 in this room as anybody's?

14 A. Right, but I notice -- I think leaks are now

15 a culture and may be a political culture and

16 I even heard last evening Mr. McCreevy

17 saying...(INTERJECTION).

18 387 Q. I think we will call this to a finish now?

19 A. Right.

20 388 Q. This is finished?

21 A. But do you know...(INTERJECTION).

22 389 Q. This is finished?

23 A. But do you know what he said?

24 390 Q. It is over?

25 A. Okay. Well, then may be I can talk to you casually

26 and say...(INTERJECTION).

27 391 Q. No, I am not getting involved. I should not have

28 allowed you say anything at all. Good luck?

29 A. Okay.

51
1 392 Q. Thank you very much?

2 A. Okay. Thank you.

3 MS. MACKEY: Thank you, Mr. Carroll.

4 A. Thank you.

6 THE EXAMINATION WAS THEN CONCLUDED.

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

52
 H D*. 1
3 fry <$M4<,>

Vlvj^V^v

\% TvjoL^ 0 \
Appendix XV (144) (l)(b)
 ESMONDE MOTORS LIMITED. CraUt Memorandum pQ'D
••e; Submitted by;
AOORESS: c/o Murray: Eurapcar Ltd., Baggot Street Bridge. Equity Staka: No
BUSINESS/
Dublin 4. C.B. Approval: Yw/No
OCCUPATION: Wholly owned subsidiary of Murray Group Holdings fermtaion Obtained N a w application
Limited. Dattl submit ted.
THIS APPLICATION
(OhUMifipraprkmi 'Extatlns fttlUdn ovarlmf
Loan DM 743,726 Cost • 3%
TYPE: AMOUNT. RATE: - FEE: N "

f
mmnmhiiMNIMMIMH

PURPOSE/DRAWDOWN: If iww or kwMaid

fmdlltiu, U drawdown
Working capital - already drawn parmhnd prior to
g ' Loan originally taken up during 1982 cempMoa of tacurlty?
0 xmtttou n/a
TERM OP FACILITIES: REVIEW DATES:
Extension for one year. 29th July 1988

SOURCE OF REPAYMENT:

Cash Flow.
SECURITY: If additional or Mixing
facility, li acurity In o/dar?
Guarantee of Murray Group Holdings Ltd,
. YES/Mflt
Security considered adequate.
If No. BhM dttafil MMTKSly.

BACKGROUND NOTE/ • Thla aeoount which Is related to Murrays Buropear Limited (Minute No. 1403)
4 1UTUNI OP PROPOSAL: facility approved 28th March ISBg has always been conducted In an
Yjipeccable manner. Interest Is always paid as debited to the account.
. We have not yet received the Audited Accounts for Murray Croup Holdings Limited although
management have Informed us that a profit of 2272,000 was achieved on a turnover of £llm.
for the year ended 31st Decebmer 1987. tn view or the way the account has been conducted
and the adequacy or the security an extension of the facility Is recommended to the 31.12.88 to
. coincide with the review date on the related facility to Murrays Eurqpcar Ltd. Both facilities
will in future be reviewed at year end.

R dated Faclllties/Borroweri: CMOIT COMMITTEE

(Balwc* or Limit, whtehtwrfatjrtattr)
Murrays Europcar Ltd Stg. Loan £082,000
JLLJJL..
1 II M Guarantee IR£ 90,000
FX Risk '£ 50,000 /Raeommwufad
BOARD
Total Expoturt: IR£1,231,500 , ,
ADH^N
Appendix XV (144) (1) (c)
 ^ U.J.P.-to &A. Uraell 24th December, I9fl8

Bruce :
«

As requested I Use bereuxferparticulars of the Accountsforwhich we hold hacking

deposits from GMCT:

a) Non Resident Accounts I which are.included In the full M*-ce?f

category for Central Bene Returns

b)
Resident Accounts for which we te.d d ^ t s from G M C T * * hypothec^ . -
 Page 2

c) Resident Account for which wa hold deposit direct from

, which Is a Cayman Company : -

<9 College Trustee clients for whan College haw? arranged backing
deposits here through G.M.G.T. t -

Esmonde Motors 743,726.22 DM

With reference to< „ - ' and . __ you will also

have similar loans and security on your owh 'books for significant amounts.
Appendix XV (144) (l)(d)
^ ' APPENDIX TEN TO EXAMINATION REPORT AS AT 30 APRIL 1378
MAJOR LOANS BACKED BY "DEPOSITS* HELD IN CAYMAN/GUERNSEY TRUST
COMPANIES

Borrow ' Loan Balaoca Outstanding ti Diposit Otttan

30April 1978 Cayman Gasnuay
I t I

2. Mtoays Emupcir Ltd 593.CC0 - 595,000

Appendix XV (144) (1) (e)
 IUIIMM e> 'CCSIMI VMM
G+M G U I N N E S S + M A H O N LTD
17 C0««<< aim OuBfe I P O.SoaSSA TweweMW*
' rr
•MHOS
EUINWSS MAMCM CAYMAN TRUST / C9LLI0C STATU* fMT MI.
RB SUMAC HOt *C.
oeurcxxAMcs MnuMKWMM 9I0M114
LEDGER SMUWWI 20JANI6
gXTCRMAL CALL 0/A
WtMOMl| CMOIT •
5 ,1" MMKUUM
i o.oo
•SALAMCI BROUGHT FORWARD
c.-. .*. • - | o.oa
!6>
13JANS6 ex. CMTCMST RATE CHAXGID
•.129 l,«i,aoo-ao; i,*n.cac.oo
» /vYJINS* CXCX CUINMESS IICT /C3LL
i
f&sg^

SL NS«eri\ * • • • ..t

I I - ' •
•^SV'Ji'
tu
&
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i ^MI« M l

.. ..FBC.-ff- •-f^vr:.;.
'aSsSjXrL ZlvV- •
— < \

Ml

"i," .r

GUINNSSS MAHON CAYHAN TRUST / CCLLIS9

 GUINNESS+MAHON UTD
bUjmitSt •MN«M wc—M»aw*«P«M»»iift»—wi*r>niimM4
IIM CO.
ATMLIM* •IU1»/•!/*!
M*IV «*» C * .
LEDGER SWIM
iVHUMMK

I H M I HIIUWI II0UA1T KiMit 000.00

*7NAIS0 |T* HVfltl tNTHV iiHAtia
. »**«»0 TO (IVIOIC IKTiV tiHAiia 7f44.J-.t2 4/V00.&1
^ . .4NAKA0 f« TO Mr NUSSAT WIS COLLCtS T/T I
I » T/TtCt JLTTLCA TSIItT I FBI 1011
99-40 Al .9Q10 ti/iaa.ao
I M U I « r w TO NT MIIAAV r u COLLCC TCT A
U S T / I I M rot Tut LLUTTL L»»L F *
L»»« 9099S»S9 AT .9010 11*990.90
IMMIH T»» TO AP OU«R«T R|0 COLL TSTT AL
T/tllt N * THS 0IAKCA F«Vlt 1 •*
101109-M A* .9010 91,1DO.00
2INUI
AT • I / I U I rot TUT N M U TIT I
MS M 4 9 J - 9 J AT .9010 UlStklfN
nmni SCO.90

••2.S
lOMMMIMMil
sssss

f 0 SOX 1b«
*| JULIAN'I C«u»1
IT JULIAN* AVC.f
Mill MIT OtlMkltf
Appendix XV (144) (1) (g)
 HURRAY GROUP HOLDINGS LIMITED AND SUBSIDIARIES

CREDIT APPLICATION

Background:
*

The Murray Group ("Hurrays") W8S started in the 1930'9 by H.F. Murray, now
retired. The principle business was initially the hire car business (with
some chauffeur driven cars}* although they subsequently expanded into car -
sales. ^ The current group structure is outlined in Appendix 1 (including
trading) although there are only two principal trading companies,
vizi
cgj?
t I '
- Murrays Europcar Limited - Car hire
- Esmonde Motors Limited - Car sales
1

Murrays held the Hertz franchise in Ireland for approximately 20 'years until
1972 when Hertz decided to set up their own organisation in Ireland. At
this time they offered to purchase Murrays but the management wished to
continue in business at that time. In 1973 Murrays entered a licensing
agreement with Europcar/Godfrey Davis which is still in effect'. They currently
have a five year agreement with Europcar until 1st Janaury 1994.

. The referral of'business by Europcar is extremely important for Murrays

• accounting for approximately 4058'of total business. In addition, Murrays
.have .a three year contract with Aer Lingus to supply cars for their European
fly/drive programme. This also leads to substantial volumes particularly
in "ofr peak" .seasons when Aer Lingus ar.e actively pronoting vacant seats.

Fleet Movements:

Murrays traditionally start the year with 300/350 cars all less than a year
old. Beginning in February/March this is built up to 800/850 cars by
the end of June. Approximately 300 new cars are purchased while the balance
are leased. Sales of the older cars commence in August/September end are
disposed of by November/December. The year then commences again with a
stock of cars of approximately 300/350 all'of which would be less than a
year old.

IFF I
 Proposal:

Murrays have a core borrowing requirement of approximately IR£1.2m which

they have traditionally borrowed in currency. It i3 proposed to transfer
thi3 from Guinness-4 Mahon who currently provide it.

It is also proposed-to provide a short term revolving credit of up to IR£3m

to be drawndown as indicated in'Appendix 2. This will be used for new
fleet purchases and would be repaid in accordance with the schedule. As .
indicated above this is a short term self-liquidating requirement. It has
- traditionally been provided by Bank of .Ireland Finance.

Existing Banking Facilities?

The following facilities are .available to Murrayst

1. Bank of Ireland - Overdraft Facility - IR£250k

- Revolving Credit - IR£400k
2. Industrial Credit Company - Tourism Loan -? IR£300k
3. Bank of Ireland Finance - Car Loans - Up to IR£Z.5m.

The Bank of Ireland facilities are secured'by en equitable deposit of the

title deeds to Haddington Road (value IEP 400kj premises and the guarantee
of various group companies.

The Bank of Ireland Finance facilities ere secured by a chattel mortgage

over the cars financed together with a holding company guarantee.

The ICC facilities are secured by 8 floating charge over Thorndene Investments
Limited, a chattel mortgage over the cars financed and a guarantee of Murray
Group Holdings. The cars financed are owned by Thorndene investments.

It is with a view to simplifying the above structure that IIB has an opportunity
to provide the revolving credit facility.

Proposed Security:

.The term loan would be secured for principal only by a bank guarantee acceptable
to IIB. This will be provided on behalf of a trust controlled by the shareholde
of the company, who have a deposit of a similar amount.
" If^7-
 -3-

Security Tor the short term revolving credit would be the guarantee of all
group companies supported by fixed and floating charges on all assets of
^ the group. While^fche past the company ha3 provided chattel mortgages on
the.cars financed,"given the short term requirements, the size of the fleet
and the frequent sales and purchases this has proved administratively cumbersome
and very expensive. Murrays, therefore, are currently seeking a bank
who will provide the facility without the chattel mortgage requirement.-

Trading:

' Appendix 3 contains the consolidated profit and loss account for the group
for the last two years. Pre-tax profit in the year to December 1987 amounted
to IR£414k (1986: IR£172k) more than double that of the previous year.
1986 returns were depressed by the small number of Americans in Europe due
to the Libyan crisis and the fact that Murrays did not have the contract
with Aer Lingus that year. Interest cover in 1987 was 2.4 (1986s 1.66)
a satisfactory level for what is essentially a short term leasing company.

Management accounts for the year to 30th November 1988 Indicate a pre-tax
profit of IR£40Bk (Budget: IR£320k) and the projected out-turn for the year
is similar to 1987. 1988 has seen margins eroded but the Aer Lingus contract
has increased.volumes significantly. An improved car market has seen Esmonde
Motors performing well for the first time in many years.

Financial' Position:

The financial position as at 31st December 1987 (Appendix 4) shows a total

net worth of IR£2.1m (1986»- IR£1.7ta) representing -3958 of total assets.
The lqng term liabilities represent 71% of net worth but when deferred taxation
is excluded long term debt amounts to only 50% of shareholders' funds.
Overall, the level of gearing is very low at year end in this company -
reflecting the cyclical nature of its fleet.

At mid-year, both the inventory of cars and short term debt can be expected
to increase by up to IR£3m. Nevertheless, this represents stock cover
of 2 times. The stock would be readily saleable over a number of months
and would be more than capable of repaying short term debt. Other current
assets (IEP800k) and fixed assets of IEP 1.2m provide significant additional
security cover.
N
r >

-4-

Asgassroent:

This is a company with a long tradition in the motor industry in Ireland

which has weathered the recession of the BO's very well. It has been well
introduced to the bank via Stokes Kennedy Crowley, who are their auditors.
Alex Spain has recently joined the Board of Murray Holdings, having been
associated with the company fox; many, yeers.

The proposal Tor the IR£1.2m bank guaranteed facility represents an attractive
. return of 3/45 on what is.very limited risk. The risk on interest is limited
as the structure can be collapsed at any time (KB London will earn Vfljf
on the guarantee which is cash collate.ralised).

The proposal to finance short tern car assets is well secured by stocks
arid fixed essets and is inherently of a self-liquidating nature. IIB will
have the right to inspect the very comprehensive fleet summaries which Murrays
produce on a monthly basis. It will be possible to verify the location
of any car in' the fleet and to inspect its tax book as these are all held
centrally in head office.

The prlncipel risks associated with the short term funding proposal are
changes in excise duties end frauds Given the likelihood that any excise
duty changes will be signalled iri the Budget (in January - when stocks are
at a minimum) and. the short term nature of the funding it is likely that
the company will be able to take steps to ameliorate the effects of the
changes. ' In addition, the importance of the car hire Industry to tourism.
• nay conceivably lead to special treatment as in the psst. The size of the fleet
makes the possibility of large scdle fraud unlikely. Any disposal of the fleet
in excess of planned level would have the effect of reducing prices significantly
in the market piece.

Overall, Murrays appears to be a tight well managed operation. They produce

excellent fleet and financial management in a timely fashion within two
weeks of month end. Having weathered the recession of the early 80's they
are well poised to take advantage of the present upturn in the economy and
the increased emphasis being put on tourism.

The strong asset cover and the readily realisable nature of stock provide
a strong basis for providing the facilities outlined.
j m
 r *
: r>
< la

^ BOTTowers Murrays Europcar *PP. No. 2803 Date: 3.2.

89

(26) Purpose and Justification

Purpose: 1. Jo approve a new IR£1.2m equiv.- term loan facility;
2. To approve a new IR£3.0m equiv. revolving credit facility.

| Justification: 1. The term facility represents a good return on a bank guaranteed

: facility1
j 2. The revolving credit is Justified by:
i (a) the strong asset cover (2.5:1)
(b> the annually self liquidating nature of the transaction.

(27) Guarantee* and Collateral

a). Existing —

b) In process

c) Proposed (New or additional) Vlli - Bank Guarantee acceptable to 118

(probably KB London)
d) Special Conditiona/bovenanta U t 2. Guarantee of-etj^grpup companies
suppori^e^y first fixed end floating
charge on all assets of the borrower
shared pari passu with ICC in an amount
of IR£300Mto be negotiated)
C28) Tenna and ccnditicna
1 -!VlVT UtAra-hs, (t> in use*/ u*
1. LIBOR + 3/48
2. DIBOR + RAC + 2* IUMMJU-iou. Cjf fmuJtJtu vkbt* pmht >-*-
C* Ai tf.
11
VrtT Ctutri't^
3,

iMcjj-i^^ FUeJ- fUplsJ- fe iv

Hu^) ifirpptJuxLj

\ Z.
Appendix XV (144) (l)(h)
 •o
E "

91 MERRION SQUARE DUBLIN 2

TELEPHONE 764611-19 {9 LINES) 760291-4 (4 LINES) TELEX 33322

IRISH INTERCONTINEOTAL BANK

LIMITED

M K Niall O'CarrolI,
KPMG Stokes Kennedy Crowley,
1 Stokes Place,
St. Stephen's Green,
Dublin 2. November 11, 1988

Dear Niall,
' Res Murray Group
I refer to our recent discussions on the possibility of putting a facility In
place for the Murray Group. I feel that the most appr6prlate route would
be to provide a facility from IIB to the group supported by a charge over
•the deposit of a similar amount with Kredietbank London. We are currently
' Investigating the methods by which this could be done.
In the «vent that a direct route can be found to take the security I would
anticipate a pricing of 1% over the cost of funds to IIB or in the event that
an indirect route was necessary a pricing of 1 1/896 above the cost of funds
to IIB. This pricing Is subject, of course, to confirmation by our Credit
Committee.
I look forward to progressing this matter with you and assure you of our best
•: i attention at all times.
/«"N J
Yours sincerely,

Manager - Banking

Ktjbtcrtd Number 40137 Republic of Ireland

Appendix XV (144) (1) (i)
 E *

Murraya Europcar Limited

fiaggot Street Bridge,
Dublin 4, Ireland.
Telephone 668 1777
Telex 937B4
Fax 660 2958

Our ref:
1993.

Doherty,
Manager - Bankinc
Irisjft Intercontinental Bank.
91 Joierrion Squjtre,
iDublin 2.

Dear Hugo,
1 enclose copies of the Audited Accounts to December 31st 1992
as follows
Consolidated Accounts - Murray Group Holdings Limited
Hurrays Europcar Limited
Eamonde Motors Limited -
I wonder would it be possible to omit Item 3 . in the letter to
Stokes Kennedy Crowley confirming the amount of .the loans at tna
end of the year.
MKHF*®' tM'
Yours sincerely,

R. Carroll. (FRO' U**''

Enc.../

•I M Mtm»lftU1_H^Mu»>v (Chtlrman), R. C»rroll F.C.*.,_H.T. Murray. M.fl. Gilisnan, J. Smith.

 hu tarm nas oeen approveu uy.uie nmuuic UI uiioiioieu
Irish Banks' Standing mmittee and the Northern Ireland Bankers' * -wciation.

The Manager, . O u r refs Kl OC [cM,

l & A (Bank)
JUtecrSaJA (Branch)
Dear Sir,

(Name of customer)
I/We have read this document and IAm authorise you to provide the information requested
herein in respect of the accounts of the above-named customer and also to disclose .the
number of Joint accounts, if any, to which the above-named customer is party.
Please send this information to our auditor^',.
( Sb3«a> . St. StepUs&ka fadte^Z
Yours faithfully,
IK. «»onw»Hi»»*N«*w>iMwwmn>>nM<nw»i>mmi>tiWw»»rt»
Authorised Signature^)
••HM*fM«MMH»1lMMMM«M •« M IMOMMMMt
Dear Sir, < •
We report that at the close of business on* JI.Ipi4.3Z-.. . the records of this
branch showed:—
1. BANK ACCOUNTS
Date of last Amounts accrued but not
posted at abova data (Note B)
Ooscripttan of a/cs s/sx Intertemu/
outlining
Balance OrJCr.
Estimated Est Current
(Including deposit a/csl Not* A conditions of Interest Account Pan
borrowing OrJCr. & other charge*
&kj»GI /oo-t £ £
7oo it issfst
oajtttnio/'s*

Note A Where e specific letter of set-off for principal exists affecting any of the above
accounts, please Indicate this by adding S to the account title, if the set-off refers
to accounts other than those being reported on use SX. (Other set-offs may arise
either et taw or on foot of a bank security document).
Note B The provision of this information may entail work and costs. If the information Is
not essential this request should be deleted.
2. FULL TITLES AND DATES OF CLOSURE OP ALL ACCOUNTS CLOSED DURING
PERIOD:

•N.B. Date to be inserted before form is sont to bank. G28 (11/82)

 Nature of securit\ ild directly from customer (e.g. Deeds, Stoc Shares etc.).
Amount only of any guarantees held for the benefit of the customer.

«M*MMtH MMOWMM •• »•••••••• •• M«INMMMI«««t*IMIMMM«l«IH»UMM«**4««*«Ma|aMtatl

^M«MM*»*MMSM»S»aM»»*MMMlMIM«|M««<

4. CONTINGENT LIABILITIES:
All known contingent liabilities
Date(s) Amount £
(a) Total of Bills discountedfor your customer, with recourse
(b) Amounts and dates of each Guarantee, (excluding Accept-
ances) Bond or Indemnity given to you by the customer.
(c) Amounts and dates of each Guarantee, (excluding Accept*
ances) Bond or Indemnity given by you on behalf of your
customer.
(d) Total of Bills drawn on and accepted by Bank on behalf of
customers (excluding (f) hereunder).
(e) Total Forward Foreign Exchange Contracts.
(f) Total of Outstanding Liabilities under Documentary
Credits.
(g) Others - Please give details:

The information available at branch contained herein isglven In confidence Tor your use-
only, in your capacity as Auditors) and without responsibility on the part of die Bank or
any of its officials*

Note: No information can or will bs given which would disclose confidential information
regarding other customers.

Si(}n8ClM»MI*IM*»liHtMMM*!!*1iHM*«M*lSI*n*nt*Wn*l*M*MtM««M«(*H«SH«*M Manager

.Date

Form SBR1 (1982)

C28 (IV/82)
Appendix XV (144) (1) (k)
 •N •
R*
91 MBRRION SQUARE DUBLIN 2
TELEPHONE 764611-19 (9 LINES) 760291-4 (4 LINES) TELEX 33322

IRISH INTERCONTINENTAL BANK

LIMITED

Mr. Niall O'Carroll,

KPMG Stokes Kennedy Crowley,
1 Stokes Place,
St. Stephen's Green,
Dublin 2. November 11, 1988

Dear Niall,
1
Ret Murray Group
I refer to our recent discussions on the possibility of putting a facility In
place for the Murray Group. I feel that the most appropriate route would
be to provide a facility from IIB to the group supported by a charge over
the deposit of a similar amount with Kredietbank London. We are currently
investigating the methods by which this could be done.
In the event that a direct route can be found to take the security I would
anticipate a pricing of 1% over the cost of funds to IIB or in the event that
an indirect route was necessary a pricing of 1 1/8% above the cost of funds
to OB. This priding is subject,-of course, to confirmation by our Credit
Committee.
I look forward to progressing this matter with you and assure you of our best
attention at all times.

Yours sincerely,

Manager - Banking

Rtgiiured Number 44S3T Republic of I relied

Appendix XV (144) (1) (1)
 1
O C T -11 . 0 6
/'frCT-

wo. of NNES5 MAHON CAYMAN TRUST LIMITED

A M«"6*r «f BulnnM* Mahon M*«ha«< B«l*inf Ortup
F.a Bw Mr
\ OHM Cayman
\ Addwe OMIWWW

October 12, 1967

vir Ml
JAF/mb

VI* TKLF.FAX

D. Padrnigfiollcry,Baq.
Colnncao & Mahon Ltd.
17 Collate Green
Dublin 2
IRELAND

D«*r Psdraigi
F u r t h e r to yours of 7th October, I confirm you may fa* letter and
schedules aa indicated to our auditors. Whilst not every balance
agrees, wc are able bo reconcile the figures with our records.
Regards,
Tours 8lncerely(

. FURZE

• O A T
 R*
wuu*«M > mrun l«J. OKM aa L ••I

TlWE* ftP
0 F
002
TOTflL *i6t40
END'
HftitSSBttLJiili

•Cufftncv JUlQn
jfiSfflfflLtbh ASM
03184093 V«t 4|883|0Q8»18
03183149 DM jttTi^ttStOO
03104173 MNitOM) EGFIT
03184983 U89 3*81849949
i OTP IV1MW IOU 128,947.77 Cf/i
007,0(6.04. *
03184988
3
U •<•. 641 MOO? sr JISWOMT'^K.'Si
X
03184343 OM 4,087.04 C S /
03194)91 Of 7t180*83 M/*'I
03114371 U88
03184990
03184384
A$
A8
sshim-
03184403 Oil 16,447,94) '
rm«uift U*9 839*00 \ _ |
03184484 U89 77*800.00
03184433 U88 1, WO,000.00 J , jl
U83 18)183*308.78 Cxly

)
03184440 1,848.73 * '
03184491 uS 10,78447
03184909 U8$ 144^31.13
03184848 U88 . 8.098134
03184883 imt
03184742 U8« « 878^)00,00
SM8R U83
U88 a*fl78/300100
flOLflOflLflO
07810039 U83
07810098 US* .2,444414*49
07810098 USS 78,000100
07810160 U88 100,000.00
07810187 U88 _ 1,370400,00
07810198 U88
07810917
07810933

i. Cvi <ve.V o - ^ V oSeo\/<..

T "
b
*- • . # <••**! VWMtltl Pa 103

ftMifitTn /,

Wlft iffWBffflfrfff J

MfflVffi lift, JUttffit StiEOBQL Jflfaiai

06040004 ito. i,toi,ma> C V 3

09040012 itftii,ai7«ao«*/L
09040039 U89 809*7741 trh
09040099 6tfc 64*309.99 erf*
06040099 US 110t099*79
09040136 Sumac— D.M. 761,817.76 CfA.
06040186 Ymi 9,988^99.99
06040317 I Wt
06040096 IKt 38,194^1
06040869 U89 67.0ia,l*-&<7»
09040606 D«Mi B,703^1 -esfz
06040446 9t*8 616,068,133 c
06040464 StUB 8*49*0187 } * P t
06040619 Ojtli 90S>ma4 - c W |
06040649 U89 81,409,29

* • /-
Appendix XV (145) Mr Liam Cassidy
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Liam Cassidy.

a) Guinness and Mahon Credit Committee Minute of 21 January 1977.

b) Extract from Central Bank examination report of Guinness and Mahon as

at 30 April 1978.

c) Guinness Mahon Cayman Trust/College Call a/c statement of 18 October

1985.
 Minutes of the 73rd Meeting of the Banking/Credit
Committee held at 17 College Green, Dublin 2,
on Friday, 21st January, 1977.

PRESENT: J. D. T. - M. E. O'K. - R. D. C. - GMcC. - P. J. F. - BMcL - I. W. K. - P. O'D.

M. C. K.

MONEY MARKET:

Period rotesrapidlydecreasing ahead of an expected 4% fall in M. L. R.

FOREIGN EXCHANGE:

The £ stands at 1.7150 against the U.S.$.

339: Cassidy Silks Limited:

Amount: £200,000
Puiposes^ Acquisition of Inter group properties*.
Term: One .year annual review.
Rate: 15% fixed
Drawdown: r
Security: By way of loan on 24th January, 1977
Solicitors, Kennedy & McGonagle, undertaking to hold Deeds
of following properties to our order. Suitably secured.
9 Lower O'Connell Street, Dublin 1.
73 Lower Georges Street, Dun Laoghalre
78 Patrick Street, Cork
Review: 31st January, 1978.

Recommended
Appendix XV (145) (1) (b)
 CUINNESS t m m LIMITED
••i
APPENDIX 10
HMOB LOWS BACKED BY "DEPOSITS' HELP IM CAVMAH/GUEMISCV TRUST ««»am,**

LowTjaltncc OutitimMng
Borrowtr Offshore
at 30 APHI 1978 • Deposit-
ees!!! Guernsey

i
i
1C
I
12
19. Cassf* Silks- 10S,44> 108.447
 +M tUKMm « ACCOUNT MM
NXCftS . GUINNESS+MAHON LTD
wr COttoieSS MA HON CAYMAN TRUST / COLLEGE 17 CoUaft 0>«n OuM«J1
T»T'gx5
O.
fB
(o
T. S
NSOA.TwehwwSSV
fcv *
CALL A/C nee NO. 2
T9VJ4*
•cr STCRLtNS ACCOUNt tUMMR
LEDGER •UHMIIIWI l»CCT»»
•xm P/C CALL 0/A
vaumoati CMOff
VMS matiGULU*
•UUUTCE MOUCHT FORWARD *»6i2, 819.2S
O^TM CR..INTEREST RATE CHANCED
eXCH GUIMNSSS M C T /COLL 2,073.
CXCH GUINNESS H C T /COLL 2.073.99 *,*78«6T1.30
•tiCTM 06*0 SIT ON POX NCI AHA FUND 7*A,33t.30
34*«9*2.01
oerosiT ON POINCIANA RIRO 100.00 3.367,097.99
,-XI PK-'AOV ... .--••;-.. .:•*•
I IBtTC", LIAK CASSIOT,. 20 AT
2.9S1.4*
av-.j & USS.RRC-VERA.CASSIO* SO AT
3,3&4<lia.a9
8V0CTI5tierxicfWOAw".. v • ••• • • ,
H:.cuiNN8ss* n cj /COLU1 B3,S22.73
'fSIUvADV -> • . 202.00
f: DBf OS IT *:OFP ^ GUI NMESS H C 169.03T.T5 3>649t*31.1l
.A-v:

Spr?: ••• •
•
•3 JSC.* ....

I P.-

--Y-*!; • "
3 •-- 1
ovmmuwm wunai AM MMUD M.

CUtNNfcSS HAHON CAYMAN TRUST / COLLEGE

Appendix XV (146) College Trustees Limited
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to
College Trustees Limited.

a) Extractfrom ninth memorandum of evidence of Ms Sandra Kells -

Channel Islands Operation.

b) Extract of transcript of evidence of Mr Martin Keane dated 16 February

2000.

c) Statements of account entitled GMCT re College Trustees.

Appendix XV (146) (1) (a)
EXTRACT FROM
k
9 t h MEMORANDUM OF EVIDENCE OF SANDRA KELLS
EXTRACT * ^ ? i t l e d c h a n n e l ISLANDS OPERATION
 changs b ±-3 sterling r e a in June 1972, Dublin recognised that very little new.
business would Sow from Ireland. In Juiy 1973 it decided to open fully in Cayman
and seek a new "A" licence. John Collins and John Furze joined Cayman from the
3ank of Nova Scocia in November 1973. Cayman became authorised dealers, with a
full 41 A" bank and crust company licence on 1st January 1974. A Category "A"
licence allows a bank to carry on business with residents and non-residents of the
Cayman Islands. A Category "B" licence for the mam part restricts a holder to
transactions with non-residents of the Cayman Islands.

Cayman placed monies on deposit with Dublin. These were placed in Sundry Sub
Accounts, which were general accounts through which monies moved, and other
accounts in the name of Cayman, but which were designated by codes, numbers or
initials and/or in the name of different entities.

Examples of such on accounts are as follows :

(a) Guinness Mahon Cayman Trust A/E - this deposit account had a $134,533.15
credit as at 16th June 1976. The Irish customer of Cayman, who placed monies
on deposit with Cayman, also had companies in the Channel Islands, named
Bella Investments Limited and Redshank Investments Limited. The A/E
account was used, subsequently, as security for a loan to an Irish incorporated
company, which was owned by the Irish resident.

(b) A/A26 - this account was in Australian dollars and large sums of money moved
through this account from the mid-1980's onwards and,

(c) a deposit opened in 1975 by Cayman was designated as a "G" deposit. This
deposit was used as security for a back-to-back loan to a company, Gombrette
Limited, which was incorporated in the Channel Islands.

CHANNEL ISLANDS OPERATION

With the shrinking of the sterling area in June 1972, Cayman became unavailable for
use by residents of the scheduled territories. To meet this position, Guinness Mahon
"Jersey Trust Limited Was formed ih No v ember 197 J to"provide ^alternative^offshore
trust service. It was a wholly-owned subsidiary of Dublin. Two of its directors were
Jo hn Co Uins and John Furze.

In the summer of 1973 it was decided that the Guinness Mahon Group should have a
bank in Guernsey. Guinness Mahon Channel Islands was incorporated in February
1974 as a wholly-owned subsidiary of Dublin and, subsequently, obtained a banking
licence. Due, however, to the downturn in the economic situation, it was decided to
let the licence lapse.

As a result of the decision to introduce a wide range of capital taxes in Ireland, the
need for a separate trust company in Guernsey was recognised and College Trustees
Limited was formed as a wholly-owned subsidiary of Guinness Mahon Channel
Islands early in 1975. John Collins was a director. With the change in the economic
 situation, i t ' w a s considered to be appropriate for the Group to have a bank in
Guernsey. In February 1977 Guinness Mahon Guernsey Limited was incorporated as
a wholly-owned subsidiary of Guinness Mahon & Co., Ltd. (hereinafter called
"London") and a banking licence was obtained.

In summary, Dublin had two wholly-owned subsidiaries in die Channel Islands -

Guinness Mahon Jersey Trust in Jersey and Guinness Mahon Channel Islands in
Guernsey, with College Trustees Limited in Guernsey being a wholly-owned
subsidiary of Guinness Mahon Channel Islands. Guinness Mahon Channel Islands
was, since the late 1970's or early I980's, anon-trading company.

Cayman was a subsidiary of Dublin, as were Guinness Mahon Jersey Trust Limited
and College Trustees Limited. Irish residents, if they were placing money offshore,
may have placed it with College Trustees in Guernsey or with Cayman. The day-to-K^.
day running of College Trustees was provided by Sovereign TrusteefL united. The '
directors of College Trustees Limited included Mr. John Lipscombe and a Mr. Brian
EUis. They were also directors of Sovereign T^rste^s Limited.

College Trustees was sold to Credit Suisse in the late I980's. Monies could pass
between College Trustees Limited and Cayman. Cayman had accounts with Guinness
Mahon & Co., London. College Trustees could have placed monies in Cayman
accounts via Guinness Mahon Guernsey, which had a banking licence and had
accounts with Guinness Mahon & Co., Ltd., London.

ANSBACHER CAYMAN

Cayman had on deposit with Dublin on the following dates

£Stg.

30.11.1978 4,834,269
31.12.1978 4,493,397
31."171979 4,319,118 ~~
. 29.2.1979 4,498,471
30.6.1979 4,812,438
31.8.79 6,498,101
30.9.1979 6,880,600
31.10.1979 6,896,908
31.12.1979 7,424,612
30.4.1981 9,396,537
30.4.1982 26,980,217
31.10.1984 25,154,068

Dublin is not aware why there was a significant increase in deposits with Dublin
between 1981 and 1982, save that a substantial number of deposits were opened at
that time by Cayman regarding College Trustees Limited. These accounts were in
Appendix XV (146) (l)(b)
PRIVATE EXAMINATION OF MR. MARTIN KEANE

UNDER OATH

ON WEDNESDAY, 16TH FEBRUARY 2000

I hereby certify the

following to be a true and

accurate transcript of my

shorthand notes in the

above named interview.

Stenographer
 PRESENT

The Inspectors: MR. JUSTICE COSTELLO

MR. ROWAN FCA

MS. MACKEY BL

Solicitor to the Inspectors MS. M. CUMMINS

Interviewee: MR. MARTIN KEANE

Instructed by: MR. BOYCE SHUBOTHAM

William Fry Solicitors

Fitzwilton House

Wilton Place

Dublin 2.
 1 THE INTERVIEW COMMENCED AS FOLLOWS ON WEDNESDAY 16TH

2 FEBRUARY 2000

4 MR. JUSTICE COSTELLO: Good morning, Mr. Keane,

5 my name is Decl#n Costello

6 and on my right is Ms. Mackey and on my left is

7 Mr. Rowan, as you know we have been appointed

8 inspectors by the High Court. I will ask now our

9 solicitor, Ms. Cummins, to administer the oath to

10 you.

11

12 MR. KEANE, HAVING BEEN SWORN, WAS EXAMINED AS

13 FOLLOWS BY MR. JUSTICE COSTELLO

14

15 1 Q. MR. JUSTICE COSTELLO: Mr. Keane, I am sure your

16 solicitor has explained to

17 you that we are not a court.and we are not a

18 tribunal, we are inspectors appointed by the High

19 Court. We have adopted the practice, which I am

20 sure is a proper practice, that we do not object, in

21 the slightest, to witnesses bringing solicitors or

22 legal advisers with them. If there is a point at

23 which you think a question is one which you should

1
24 not be required to answer, for one reason, for

25 example that it is not relevant or it is not within

26 the terms of the Court, you can so indicate to me

27 and you can discuss the matter with your solicitor.

28 If your solicitor thinks that we are asking a

29 question which you are not required to answer, he

jpyj-j 1 can so indicate to me and I will stop and he can

2 talk to you about it. That is how we propose to

3 operate.

4
<

5 I should explain, however, whilst we carlhot make a

6 ruling as to the admissability, the preparatory of

7 the question, we may have to reach a situation where

8 we regard your decision not to answer the question,

9 for reasons which you consider valid, as amounting

10 to a refusal to answer the question and we would

11 then have to consider having the matter brought

12 before the Court. That is the procedure which will

13 be adopted here today.

14

15 Mr. Keane, it would be helpful if you could briefly

16 indicate firstly to me your professional

17 qualifications and briefly your curriculum vitae in

18 your profession?

19 A. I am a chartered accountant and I qualified as a

20 chartered accountant in 1972, in what is now KPMG,

s 21 SKC as was it known then.

22 2 Q. Strokes Kennedy Crowley?

23 A. Strokes Kennedy Crowley.

24 3 Q". In when?

25 A. 1972.

26 4 Q. You qualified?

27 A. I qualified and I left SKC in that year and I joined

28 Guinness & Mahon as a junior corporate finance

29 executive. I worked in Guinness & Mahon from 1972

prtil 1 until 1988 when I left Guinness & Mahon. Since 1988

2 I have been employed by Ernst & Young, chartered

3 accountants, and my current position there is

4 director of corporate finance services. My career

i

5 has been in corporate finance, essentially.

6 5 Q. We are concerned now, particularly with the company

7 that is now known as Ansbacher, and we are concerned

8 with obtaining from you assistance as to the

9 services which Ansbacher operated here in Dublin and

10 I particularly want your assistance in relation to

11 the establishment of trusts in Cayman, in respect of

12 which the Ansbacher may have been the trustee or

13 management company and how the whole system was

14 established and how it worked and if you could give

15 us, in considerable detail, your knowledge of it?

16 A. I think it might be helpful to you if I just

17 outlined where roughly, over time, my role was in

18 relation to the whole Ansbacher affair and the

19 various off-shore companies that were subsidiaries

20 of the bank. As I say, I joined the bank in 1972 as

yp^ 21 a junior corporate finance executive. I had no

22 dealings with any of the off-shore operations of the

23 bank until, I believe, about 1974. At that stage

24 ' there was, in existence, Guinness & Mahon Cayman

25 Trust, which is now known as Ansbacher (Cayman)

26 Ltd., I understand. There was also in Jersey a

27 company which had been established in 1972 by the

28 name of the Guinness & Mahon Jersey Trust Ltd.,

29 which was a trustee company, which I came into

 1 contact in 1974. I think in 1974 there also had

2 been established in Guernsey a company by the name

3 of Guinness & Mahon Channel Islands Ltd. The

4 background to all of that was, as I understand it,

5 that in 1972 there was changes in the definition of

6 the scheduled territories, which made up the

7 sterling area and my understanding is Cayman went

8 outside the sterling area. Cayman had been the

9 place where Mr. Traynor had established a subsidiary

10 on behalf of the bank, known now as Ansbacher

11 Cayman. It was now not possible for this to be

12 used, except by virtue of exchange control

13 regulations and he set up, I was not involved in the

14 setup of it, a company in Jersey, which was just a

15 pure trust company, by the name of Guinness & Mahon

16 Jersey Trust Ltd. He was assisted in that by

17 someone in the bank at that time, who was also a

18 director of the bank, by the name of Chris Dodd.

19 6 Q. If I could interrupt you, what do you mean by "just

20 a trust company"?

21 A. It wasn't a bank, it was just a trustee company.

22 7 Q-
23 A.

24 8 Q:

25 A. The first time I came into contact with any of these

26 entries really was in 1974. Mr. Dodd had left the

27 bank and I believe, I think, in that year

28 Mr. Traynor had suffered a heart attack. Guinness &

29 Mahon Jersey Trust had, at that point, a

 1 considerable number of trusts which had been

2 established in the Channel Islands and there were a

3 significant number of companies there as well. At

4 that time Guinness & Mahon Jersey Trust didn't have

5 a secretariat, as such, in the Channel Islands. The

6 registered office of the company was at the house of

7 the son of a former client-of Mr. Traynor's and I

8 think they used local firms of accountants in Jersey

9 to supply formation services and secretarial type

10 services. So, I, at that stage, was asked by

_ 11 Mr. Traynor to go over, in essentially an

12 administrative role, to look after those companies

13 to make sure the returns were properly filed and to

14 make sure they paid their local taxes. At that

15 stage there were, I can't remember how many now, but

16 a significant number of trusts had been

17 established...(INTERJECTION).

18 9 Q. Approximately how many?

19 A. I would say maybe 25 to 30. At that stage, also,

20 the bank had, in Dublin, a large number of what I

_ 21 would call old trusts of the kind of marriage

22 settlement or will trust nature, some of them which

23 were Irish others which had moved their residence

24 • from the UK to Ireland in the '60's when capital

25 gains tax came into the UK in the '60s. Guinness &

26 Mahon Executor and Trustee Company, Ireland would

27 have been the trustee to a lot of these settlements.

28 In 1974 capital gains tax was introduced to Ireland

29 in 1974 and a lot of these trusts wished to move

 1 residence yet again to the Channel Islands, or some
2 suitable jurisdiction for the purposes of avoiding

3 capital gains tax, is my understanding. So that

4 event, Mr. Traynor and Mr. Dodd, I believe, at that

t
5
time, were in the process of applying fdi a full
6 banking licence for a company which had been

7 incorporated in Guernsey by the name of Guinness &

8 Mahon Channel Islands Ltd. After Mr. Dodd's

9 departure I was involved in some meetings with

10 directors of the parent bank in London and I think

11 at least one meeting with the financial

12 establishment or regulator in Guernsey. In due

13 course — the intention was that this would be set

14 up as a full bank in Guernsey which would also carry

15 out trustee services. A banking licence was duly

16 obtained, I believe, in 1974, however subsequent to

17 that there was, I think, a downturn in business, the

18 whole project was reviewed. On the grounds of costs

19 it suddenly looked like being far more expensive to

20 set up in Guernsey than people had originally

21 envisaged and it was decided not to proceed with it.

22 The licence was, I believe, relinquished and handed

23 back to the Guernsey Authorities.

24 10 Q-. Do you know when was that?

25 A. I think approximately, end of 1974.

26 11 Q. 1974, as soon as that?

27 A. Yes, it could have been early 1975. So the

28 situation at that point was that there was this

29 demand from the old trusts back in Dublin who were

jaW 1 seeking a permanent establishment, the bank had a

2 permanent establishment within the sterling area,

3 but off-shore and there were these companies which

4 had been set up in Jersey and trusts which had been

5 previously set up in Jersey which really $idn't have

6 any permanent establishment or secretariat to look

7 after to administer them.

9 Among these old trusts were trusts connected to the

10 Guinness family, in that I mean primarily Mr. James

11 Guinness, who was then the Chairman of Guinness &

12 Mahon & Co., which was the parent company of

13 Guinness & Mahon Ltd. I can't remember exactly the

14 sequence of events, but they were very keen to have

15 proper managers in place in one of these places and

16 they came in contact, through some mutual

17 acquaintance, with a Mr. John Lipscombe who ran a

18 trustee company in Guernsey, by the name of

19 Sovereign Management, which was a privately owned

20 trustee company. He had a good reputation and

"•K. 21 arising from this various meetings that took place

22 in Guernsey and I think subsequently in Dublin with

23 Mr. Traynor. It was decided that Guinness & Mahon

24 ' i n Dublin would establish a subsidiary by the name

25 of College Trustees in Guernsey, which subsidiary

26 would rent some space from Mr. Lipscombe's

27 organisation and entered into a contract with

28 Mr. Lipscombe's organisation to supply management

29 services to these trusts and company management

 1 services. I believe subsequent to that a lot of the

2 old trusts that were in Dublin, and the trusts that

3 had been established in Jersey were all transferred

4 from Guinness & Mahon Jersey Trust and from Guinness

*

5 & Mahon Executor & Trustee in Dublin to College

6 Trustees as trustee.

7 12 Q. Just so I understand, I think you made it clear,

8 when you say "transferred" you mean that the trustee

9 was changed to College Trustees?

10 A. I think the trustee was changed, may be not in all

11 cases, but in most cases, certainly in the ones

12 where Dublin was a trustee.

13 13 Q. The intention being that the company that would act

14 as trustee would be College Trustee?

15 A. Yes, and would act as the company manager.

16 14 Q. And would also act to manage the trust as well?

17 A. Manage the companies underlying the trust.

18 15 Q. We will come to that later. Just again, I am sure

19 you cannot be definite but just how many companies,

20 old trusts, that were moved from Dublin?

""" 21 A. It is not a large number but they were fairly

22 substantial trusts.

23 16 Q. The numbers weren't large?

24 A-. The numbers wouldn't be large, six to ten, they

25 would be very substantial and very heavy from an

26 administrative point of view, they would probably

27 have had investment portfolios and the like.

28 17 Q. Yes. Continue then.

29 A. My role in that period was on the instruction of
 1 Mr. Traynor to try and — my role was involved in

2 the organising of all that and the organising of the

3 transfer and looking at the overall — making sure

4 that the overall administration was up to date and

i

5 the returns were filed on time. k

6 18 Q. You, in fact, were a director of College Trustees,

7 originally?

8 A. At the date of incorporation, purely at

9 incorporation, I checked that and I was not, purely

10 for the purpose of incorporation.

^ms, 11 19 Q. That explains it. Continue then Mr. Keane.

12 A. That is the point at which all the Channel Islands

13 activities came together under College Trustees

14 which I think was a subsidiary of Guinness & Mahon

15 Channel Islands. So we now had the situation where

16 Guinness & Mahon Dublin owned one hundred percent of

17 Guinness & Mahon Channel Islands, which in turn

18 owned one hundred percent of College Trustees, which

19 had a management arrangement with Sovereign. At

20 that time, most of the client companies that had

21 been set up in Jersey had deposits back in Dublin in

22 the name of the normal — when I came across it, the

23 normal structure appeared to have been that there

24 ' was a trust with an underlying company. Most of the

25 trusts that had been set up in Jersey had

26 Christopher Woodward as the settlor, who was the

27 gentleman whose house was used as the registered

28 office, the son of the former client of Mr. Traynor,

29 who was a director of Guinness & Mahon Jersey Trust.

 1 So those companies had deposits back with Guinness

2 Mahon in Dublin.

3 20 Q. If you just take it a little slowly. You say the

4 trust had underlying companies.

5 A. Yes. '

6 21 Q. Was it the trust just owned one hundred shares or

7 something like that of the company?

8 A. Yes.

9 22 Q. All the funds were in the company?

10 A. In the company.

11 23 Q. And the company then managed the funds?

12 A. Yes, the company placed them back on deposit with

13 Dublin.

14 24 Q. That is what I want to get at. Were all the funds

15 placed back in Dublin?

16 A. My recollection is yes.

17 25 Q. In whose name were the funds placed?

18 A. The funds, at that point, my recollection is that

19 the funds were in the name of the individual

20 underlying company.

21 26 Q. The underlying company?

22 A. The underlying company.

23 27 Q. We will come to these later. These were the coded

24 • accounts, were they?

25 A. No, at this point they were just X, Y, Z

26 investments, whatever, the actual names of the

27 company.

28 28 Q. Of the company?

29 A. Of the company, yes.

1 29 Q. Very well Mr. Woodward was the settlor in all these

2 trusts, was he?

3 A. That is my memory of the ones I came across.

4 30 Q. Did you see who the clients were who instructed

5 Mr. Woodward to be the settlor? '

6 A. Not initially, I became aware of some of them as

7 time went on.

8 31 Q. Yes. Were these discretionary trusts?

9 A. My memory is yes.

10 32 Q. You became aware of who the beneficiary was and who

11 was able to give instructions as to how the funds

12 were dealt with?

13 A. I can't exactly say how I became aware from various

14 bits of information.

15 33 Q. If you continue then, Mr. Keane.

16 A. So, I think at point — some point after that — I

17 think during that period, which is roughly from

18 about 1974 to I think about 1976, 1975/76 is the

19 period when all this was going on about Guinness &

20 Mahon Channel Islands, the setting up of College. I

21 think some more companies may have been incorporated

22 in Jersey and they may have been added to the trust.

23 I think there was a certain amount of shelf

24 • companies that had been formed by Mr. Traynor, so

25 there may have been some companies added to the

26 Jersey stable, if you like.

27 34 Q. What function would they have?

28 A. What function?

29 35 Q. Yes.
 1 A.

2 there were a large number of trusts there which were

3 shelf type trusts where they were set up by

4 Mr. Woodward and there may have been companies which

5 were subsequently formed to go with them!

6 36 Q. When you say "shelf", you mean that they were there

7 available for anybody who wanted them, they were not

Q operative?
o
9 A. Weren't operative, yes.

10 37 Q. That was between 1974 and 1976?

11 A. I think that is my memory, yes. Some more may have

12 been allocated to clients by Mr. Traynor at that

13 time. I think some time around 197 6 Mr. Traynor

14 decided that he was the going to change the system

15 in Dublin in relation to the deposits in the

16 individual companies which were appearing as

17 individual deposits. He instituted a system,

18 whereby from some date around then that they were

19 now coded, still individual deposits on the books of

20 the bank but now known as Guinness & Mahon Channel

21 Islands A, B, C, D, or whatever, some number.

22 38 Q. The name in the company was Guinness & Mahon Channel

23 Islands Ltd. was it?

24 A".

25 39 Q.

26 A.

27 40 Q.

28 A. In the books of the bank, that is my memory, yes. I

29 think it was acting as a nominee really.

 1 41 Q. You see there was Guinness & Mahon Jersey Trust Ltd.

2 and that had gone, more or less, to fund College

3 Trustees?

4 A. That's correct, yes.

5 42 Q. There was Guinness & Mahon Channel Islands; Ltd.

6 A. Which was not trading.

7 43 Q. Which was not trading but its name was used?

8 A. Its name was used, yes.

9 44 Q. As the depositor?

10 A. As the depositor. So if we had, let's say 30

11 depositors in different names they now became

12 Guinness & Mahon Channel Islands A, B, C.

13 45 Q. With the code?

14 A. With the code, yes.

15 4 6 Q. If you continue then.

16 A. I think, what happened after that, some point after

17 that those deposits I think there were some new

18 clients from College Trustees, there were some new

19 clients in College Trustees in that period, in the

20 mid/late '70's College took on new clients which

21 would have been introduced, largely, by Dublin I

22 expect. At some point, I think, around 1979 the

23 bureau system was instituted, I think that is the

24 ' correct date.

25 47 Q. It may have been instituted, but we have letters

26 from Mr. Lipscombe from the Channel Islands in 1978

27 and also Mr. Furze at the same time?

28 A. That's the start of the bureau system.

29 48 Q. That was the start of the bureau system.

 1 A. The bureau system is quite different in the sense

2 that... (INTERJECTION) .

3 4 9 Q. You perhaps might describe it to us now?

4 A. My understanding of it, I wasn't involved in the

*

5 setting up of it, but my understanding ofi-. it was

6 that the, whereas previously in the case of the

7 Channel Islands there were"a whole series in the

8 bank of individual deposits, albeit coded A, B, C,

9 D, they were all amalgamated into one deposit, and

10 that, in the ordinary books of the bank, was the

11 only deposit that was visible and the arrangement,

12 which had been entered into with College, was that

13 the tracking of those deposits, the underlying

14 deposits making up the large deposit, would be

15 maintained on a separate system by Dublin for

16 College Trustees and I believe similarly for Cayman,

17 and what has subsequently been known as the bureau

18 system, to which only, I think, at that time it may

19 have been Mr. Ru Leonard who was the manager of the

20 accounts department in the late '70's, he was

21 subsequently succeeded by Mr. Collery. The only

22 people who had access to the bureau system were

23 either Mr. Leonard, at the appropriate time, or

24 • subsequently Mr. Collery or Mr. Traynor. I had no

25 access to it.

26 50 Q. Before that, however, you seemed to have been the

27 person who had access because we have a note on a

28 ledger saying that information can be sought from

29 you?
 1 A. Yes, Mr. Ryan, the authorised officer, brought that

2 up with me. I am somewhat surprised by it and I

3 have racked my brain on it since then and I think

4 what it in effect was saying was that, in effect,

5 outside of Mr. Leonard, or whoever cont'jsplled the

6 accounts department, or Mr. Traynor, the only other

7 person who could have access to those accounts was

8 me.

9 51 Q. Whatever the note said, you in fact had access?

10 A. To the Channel Islands, to the GMCI ones?

11 52 Q. Yes?

12 A. I had access. At that stage I knew who some of the

13 clients were. In a lot of cases it was a refer to

14 Mr. Traynor, situation.

15 53 Q. And that altered when the bureau system was

16 established and it was Mr. Leonard and later

17 Mr. Collery?

18 A.

19 54 Q.

20 A.

21 is that Mr. Lipscombe started to deal directly with

22 most of the Irish clients, by and large. I do not

23 think my recollection is, from my awareness anyway,

24 • that there were probably very few new clients going

25 into College around that time, it doesn't mean there

26 were not, but to my knowledge there were not, but

27 there may have been direct dealings between

28 Mr. Traynor and Mr. Lipscombe or directly between

29 Mr. Lipscombe and...(INTERJECTION).

 1 55 Q.

2 the number of clients that were involved, the number

3 of separate deposits in the bureau system?
4 A.

5 56 Q.

6 directly with the Irish clients?

7 A. I think at that stage from Mr. Lipscombe — from my

8 own personal point of view I had no wish to be

9 dealing, if people had affairs which were with

10 College Trustees I preferred that they were dealt

11 with by College Trustees. I was a corporate finance

12 executive, I got dragged into this thing back in

13 1974/76 and my main job in the bank was acting in

14 corporate finance. My position was to get on with

15 my corporate finance activities and leave the

16 Channel Islands activities.

17 57 Q. I just want to understand how you understood

18 Mr. Lipscombe operated in relation to the monies

19 that were on deposit in Guinness & Mahon, how did it

20 come about?

21 A. How did it come about?

22 58 Q. What would he do, how would this be operated?

23 A. Again, I had some discussion with my

24 • recollection is that there were intercompany

25 accounts between the bank in London, that there

26 would have been intercompany accounts from London

27 because it was mainly sterling balances and I think
28 the large deposit that represented the bureau,
29 collected accounts, was still back in Dublin. I
jg^j 1 think if some of the clients, if you wanted to get

2 money to some of the clients in Dublin communication

3 would issue by telephone, or otherwise, or direct

4 from the clients that they wished to collect some

5 money and that money might be provided them in

6 Dublin, they would call in and collect it.

7 59 Q. I want to find out how it'operated. When you say

8 there were intercompany accounts with London, what

9 were the companies that were interconnected?

10 A. I think they would just be the normal intercompany

11 accounts like Guinness & Mahon Dublin's account with

12 London. I think, at some stage, Guinness & Mahon

13 Guernsey came into it which was set up some time

14 later, which was owned by the London bank. Really I

15 wasn't involved in that kind of interbank side of

16 it, I am very hazy on it. Normally within a bank

17 like Guinness & Mahon all of the subsidiaries would

18 have accounts with the parent, clearing type

19 accounts, but the exact nature of the

20 accounts...(INTERJECTION).

21 60 Q. To come back to what you told us a moment ago in

22 relation to the clients who wished to obtain funds,

23 what would they do, did you say?

24 A1. I think in some cases, at that stage, I would have

25 had an awareness of who some of these beneficiaries

26 and clients were, which knowledge would have

27 increased over time from various points, or it could

28 have been an instruction from Mr. Traynor or a

29 request from Mr. Lipscombe that Mr. X would like to

 1 get some money: Please give Mr. X £5, 000. If that

2 occurred, I think if it occurred in the period when

3 there was the GMCI accounts it may have been a

4 direct debit. It might not have been me it might

5 have been Ru Leonard, it might have been'

6 Mr. Traynor.

7 61 Q. You were involved some of the time?

8 A. To some degree, yes.

9 62 Q. Tell me what happened?

10 A. Let's say there was a person who was well known to

/"•s 11 the bank and we knew he was connected with the —

12 Mr. Lipscombe rang and said: Mr. X wants to get

13 £5,000, he would call it in, give it to him. He

14 would call in and certainly once the bureau system

15 had been set up I would just debit it to his expense

16 account and inform Mr. Collery that I had so done.

17 63 Q. You would actually physically hand him over a cheque

18 or cash?

19 A. Cash or whatever, yes.

20 64 Q. And you would put it into his expense account and

/"-s 21 Mr. Collery would then deal with it?

22 A. Yes.

23 65 Q. From what you knew, I would imagine you would have

24 ' known fairly quickly that he put it there and he

25 dealt with it in accordance with the code. If it is

26 was £5,000 there would have been deduction?

27 A. He would now know the appropriate code account.

28 66 Q. So your involvement was as an official in the bank,

29 along with others, in making the payments that were

v. j 1 required by the clients, from time to time?

2 A. That was part of it, I wouldn't say that that

3 happened on a very regular basis. There was a

4 continuing — there was some small administrative

5 role on a continuing basis with College^Trustees,

6 the accounts, the statutory accounts of College

7 would be agreed each year with Mr. Lipscombe.

8 67 Q. Were you involved in that?

9 A. I would maybe review them with Mr. Lipscombe, but

10 that would be on a purely company basis rather than

^ 11 on the basis of individual clients. I think that

12 summarises the most of it.

13 68 Q. This pooled deposit account was in the name of

14 Guinness & Mahon Guernsey Ltd. was it not?

15 A. I think at one point it was. I think my

16 recollection of that is that some time in the late

17 '70's or early '80's London decided to set up a full

18 bank in Guernsey to reactivate having a full bank

19 and in the early days of that the bank was set up

20 and Mr. Lipscombe was its first chief executive on a

21 pro-tem basis until London could staff it properly.

22 I think there may have been a time, I am just vague

23 on this, where the pool account was in the name of

24 • Guinness & Mahon Guernsey for a period.

25 69 Q. My information, I may have taken it up incorrectly,

26 was that at the time when the change took place that

27 I want to deal with now and the money

28 was...(INTERJECTION).

29 A. The bureau?
 1 70 Q. No, after the bureau when the College Trustees

2 system, when the Guinness & Mahon Cayman Trust

3 account in Dublin had an additional account with

4 College Trustees and that change occurred, the money

*
5 that was on deposit from the Channel Islands was, I
6 think, in the Guinness & Mahon Guernsey?

7 A. I think that may well be.

8 7 1 Q. I want you to tell me about the change over that I

9 have just mentioned?

10 A. This to GMCT Re College.

11 72 Q. Yes.

12 A. I have no absolute recollection of it but I think it

13 would just purely be an administrative stroke of a

14 pen thing on Mr. Traynor's part. Instead of the

15 funds being routed through Guernsey they would just

16 be placed in the name, it is all just intercompany

17 stuff within the Group.

18 73 Q. That may be very familiar to you, but I would like

19 you to explain it to me in detail?

20 A. The change?

21 74 Q. Yes.

22 A. I just recall the change taking place.

23 75 Q. Just tell me what the change was?

24 A'. The change would have been that the pool deposits,

25 which were in Dublin in the name of the Guinness &

26 Mahon Guernsey were now, which would have

27 represented a deposit with the underlying companies

28 out in the Channel Islands with Guernsey, with

29 Guernsey placing those funds back in Dublin in a

 1 pool account, that that would have changed and the

2 flow of the funds would be that they were no longer

3 in Guernsey but they were booked as going back to

4 Cayman and then from Cayman back to Dublin.

5 7 6 Q. In the books of the company the funds wete moved to

6 Cayman and from Cayman to Dublin?

7 A. Yes, it would be a deposit by the underlying Channel

8 Islands companies, the client type companies would

9 have a deposit which previously was with Guernsey,

10 is now with Cayman and Cayman is now putting those

11 deposits back on block with Dublin in the bureau

12 system, whereas Guernsey had done that heretofore.

13 77 Q. It was in the Guernsey Bureau system in Dublin

14 heretofore?

15 A. I think so.

16 78 Q. It was then changed so it was transferred in the

17 books to Cayman and then got into the Cayman bureau

18 system?

19 A. Yes.

20 79 Q. Can you assist in relation to the codes, from what

21 you have said it would seem to me that probably the

22 codes were exactly the same in the new system?

23 A. I suspect, I couldn't be sure.

24 80 Q: So, for whatever reason it was Mr. Traynor's

25 decision this occurred and it meant that the

26 Guernsey account was closed in Guinness & Mahon and

27 there were instead two large accounts?

28 A. I think that is correct. I just volunteer this, I

29 think Cayman was very much under Mr. Traynor's

 1 control, Guernsey would have been under London's

2 control, it was a London subsidiary, and it may have

3 been more profitable from the Dublin end for it to

4 be coming back to Dublin via Cayman, which was its

i
5
subsidiary, rather than coming back to Dublin via
6
Guernsey, which was London's subsidiary.
7 81 Q. It was a commercial?

8 A. I think so, yes.

9 82 Q. This system operated and what was your involvement

10 in the system up to — that occurred in 1981?

11 A. Yes.

12 83 Q. Up to the time you left in 1988?

13 A. My involvement was fairly minimal in that period.

14 As I say, I had become aware of the identity of some

15 of the clients, some of those clients would contact

16 me if they wanted to make communication, a

17 relatively small number of them, but because I had

18 an awareness of who they were they would continue to

19 contact me. Some of them had back-to-back loans.

20 84 Q. Were you involved in the back-to-back loan

21 situation?

22 A. Only to the extent that I was on the credit

23 committee of the bank, from the late '70's, probably

24 •
I think about 1977. The back-to-back loans, I

25 believe, had been going on for, predated that by

26 some considerable period. My recollection is that

27 if some of these people who had established trusts

28 are companies off-shore and they wished to borrow

29 funds, the procedure would be that it would go to

>"*« 1 Mr. Traynor, Mr. Traynor would decide whether a

2 back-to-back would be granted and it would go

3 through in the normal way from a credit committee

4 decision. The existence of the cash deposit would

5 not be mentioned in the security letter. '

6 85 Q. I think the phrase used was "suitably secured "?

7 A. I think various phrases — I have no recollection of

8 an absolute, that this is absolute, the phrase was

9 quite loose I think.

10 86 Q. If one comes across on the document as "adequately

11 secured" or "suitably secured" that meant a

12 back-to-back loan?

13 A. Almost certainly. I believe it is possible there

14 were exceptions.

15 87 Q. They were not mentioned at all. The fact that there

16 were back-to-back loans took place was not mentioned

17 in the facility letters?

18 A. No, I think there is an issue, it wasn't mentioned

19 and the hypothecation, the funds would have been

20 hypothecated to either, I presume, Cayman or to

21 College by the underlying depositor and I think, de

22 facto, Dublin had the benefit of the knowledge that

23 those funds were there. I am not sure if legally

24 ' they could actually lay their hands on them, but

25 from a group point of view. I remember raising the

26 point with Mr. Traynor.

27 88 Q. At the credit committee this would have been raised?

28 A. Yes.

29 89 Q. Mr. Traynor would have said this okay?

 1 A. Yes.

2 90 Q. And then this would be noted?

3 A. And we would just go to the Board then for formal

4 approval in the Board minutes and it would go to

5 London. I think London required returns,; London

6 had a keen interest in knowing which loans were

7 cashed back, effectively."

8 91 Q. London would be informed?

9 A. They would, I believe, not by me but in the normal

10 banking...(INTERJECTION).

11 92 Q. Yes. Could I return in time to the Cayman Island's

12 subsidiary, Mr. Keane, it had been established a

13 short time before you came to the bank I think.

14 What was your involvement in the Cayman Island?

15 A. Very little, I have known, very little. From time

16 to time I knew who the people were down there, I had

17 met Mr. Collins, I had met Mr. Furze and from time

18 to time one-off things might come up where

19 Mr. Traynor might, they might be on the phone and

20 they wanted to open an account or something in

21 Dublin, but no, it was very spasmodic and I had no

22 involvement really.

23 93 Q. You knew some of the clients of the Channel Islands

24 •
Group?

25 A. Yes.

26 94 Q. Did you know some of the clients in the trusts in

27 the Cayman Islands?

28 A. When I say no I would say I had a certain awareness

29 from the credit committee from the back-to-back

 1 loans that there were some very large back-to-back

2 loans which were suitably secured.

3 95 Q. It was that way you got to know the people?

4 A. That is how I got to know them.

V

5 96 Q.
Why I am asking you about the Cayman Island is that
6
we have obtained a document which was an internal
7
company document, obviousiy September, 1974, it is
Q
O not for circulation to clients, it is the Guinness
9
Peat Group, Cayman Islands, Exhibit 1, and it is
10
referred to at the first page that:
11 "... any request for information or
introduction to the resident personnel
12 should be referred to J. Desmond
Traynor or Martin C. Keane... ."
13

14 Whatever that was it was not operated, is that the

15 situation?

16 A. That is my understanding. I don't believe I have

17 ever seen this document, Exhibit 1.

18 97 Q. I would like to get your assistance on another

19 aspect of the services that were given by Cayman.

20 We have been dealing with trusts with depositors who

21 were who were beneficiaries of trusts, but there

22 were a great number of other people who were on the

23 bureau system who hadn't trusts at all who made

24 • deposits through Dublin, can you explain that?

25 A. I am not really familiar with that, Judge. As far

26 as I was aware the vast bulk of the customers of the

27 Channel Islands companies had underlying companies,

28 there may not have been trusts over them in all

29 cases. I don't believe that there were, certainly

 1 not to my recollection, any significant people

2 opening accounts in their own name or anything like

3 that, that there was always a company, as least, if

4 not a company and a trust or maybe there was a

5 company initially and at some point later a trust

6 may have been put over it.

7 98 Q. Were you aware of any individuals who were on the

8 bureau systems who had never set up trusts, who were

9 never companies in the Channel Islands or in the

10 Cayman Islands?

11 A. Not specifically that I can think of. This came up

12 last week in the context of the Moriarty Tribunal in

13 connection with Denis Foley and I gave evidence that

14 regard where Mr. Traynor introduced me to Deputy

15 Foley and informed me that he was minding funds for

16 Deputy Foley and didn't tell me where they were and

17 they could have been in either bureau system.

18 99 Q. We have had several witnesses who never had any

19 trusts in any country but who were operating on the

20 bureau system?

21 A. I just can't think of any.

22 100 Q. You didn't come across any?

23 A. I have no memory at this point. Is this taken from

•
24 the '70's?

25 MR. JUSTICE COSTELLO: Perhaps we might have a

26 short break for a cup of

27 coffee now, would that be all right?

28 A. Yes.

29 MR. JUSTICE COSTELLO: About ten minutes, that's

SHORT ADJOURNMENT
 G+M •-Hiiwwoi^jd^, J

BANKERS GUIIMNESS+MAHOIMLTD
«cov.ii CUINNPSS CAHCN CAYMAN TRUST / C3LLECE 1 7 ColUg. c « * n OuMifl 2 C O. 3o» S5A
O+M* A/H
5TAT6N6.NT NO.
turnwr 0£UTCH«A«KS PACE
XCSUM SUUMH 36C4CC12
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trAitviMi 24JL VS3

PABTlOjUflS ; vAiut o*u; curoi r SMAMCt

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l a j i w a s -BALAUCE BROusHr PORWARO i
l*C93,033.19
|2ajUHB3 |INT. APPLreO TO aOJUNSS 3 0 J U N 8 3 27,476.43 1*120.331.64

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IJ 3ANKEHS GUINNESS+MAHOIM LTD
oou
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j MAHON CAYMAN TRUST / COLLEGE 17 Collage Gf«n Ouftlin J P.O. s0« 55A T.*ono«« llOm
!•" a: . STATEMENT NO.TlblSt,
!. i: • amci STERLING 4CC0UKIkunci 'C6C40C63
PACE NC.
LEDGER
otxiwnM g X T g / U M t CALL 0/A iTAiUMur o»rt iajUKSS
FAJinCUUMS • VALUE 0AI6 | CBfOIT SAtAKf
teiV
1 • ** • •BALANCE BROUGHT FORWARD
ijjtjxas CSU12.00
INTEREST RATE CHANCED 0.00
. .
PLACEO ON CALL AT 12X 691.3S7.ai
2SJUN«3 INT.. APPLIED TO 30JUNBS 6*US3T.ai
30JUN69 2.500.94 49*»358.TT
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 G+M GU INN E S S - M A H O N L T D
HANKERS J 7 Coti'.'.i't G/ucii Dublin 2 f. '.:..» -ijA T,- itmun» 7
•WED.'.-" iiutm:I*is MAHOII CAYMA.% R N ^ T / ' -t.-.r ac. 1
«Mt Si" A/K5 m;. i
cuMKocr U.S. OULLAP.S
LEDGER RA.-r ,t2aci'«
MSCximoN EXTERNAL CALL 0/A

OAT? fAflrtOAAflS VAU'.C OA:: eiscnir

•BALANCE BROUGHT P9HWARB : C.CC

30N0Va*| CK. INTEREST RATE CHANGED.*
C.CC
9.00 ! \ 75C.CQC.CC! 7SC.CCS.C3
040ECa«i| EXCH CUINN6SS M C T ;

!
• i
I

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1
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7+m iwm* mm *** I*** V'JT****"* I— nvrCAwN fitMCts A^f ».uH*ra:

iiw rmiJ^-a i»w«viif u<«»»
 G+M GUINNE$S+MAHON LTD
STArtWM Ct ACCOLMWRN

BANKERS
«xoi«t CUINMESS MAHON CAYMAN TRUST / COLLEGE 17 Callaga Cr«.n Oublifi Z P.O.Bo« S5A Tmehan«:79e3W
MUM B/T STA TEHE.NT HO.
PACE MO.
06040063
LEDGER
STERLING AHtXjNf Mxuia

.a- EXTERNAL CALL 0 / A

STAHtMNr OAK 22 J A N 86

CMOIT RAUNCX
' OATZ PAKTICUAAS VAUII QAT1 I
694.058.77
MOBCW •BALANCE BROUGHT FORWARD 736,044.12
310ECB3 INT. APPLIED TO 310EC35 41,983. JS j 732,948.71
[C9JANB6 COLLEGE GEES 3,095.41
1-t
j! r
• /

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$ ••yy.-vs-
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 G+M tuttuiNt CJ ACCOM? VWTW
1
1

BANKERS GUININJESStMAHOINJ LTD r

CUJNNESS MAHON CAYMAN TRUST / COLLEGE 17 Csll««« Of OuMin 2 P.O.Bo« S5A r«wonofl«7M»u
HSP A*3 STATEMENT NO.
PACE NO.
ECU ACCOUMT NUUICM
LEDGER
06040101
EXTERNAL CALL O/A sMruMnroArt 31CECSS
NUIKUUM VACUC 3ATC CBCOft •MJMCf
3
% * .SJTV,.
•BALANCE BROUGHT fORWARO
I CS. INTER EST RATE CHANGEO I 0.00
I20ECS5 . J-oo •
r •
EXCH GUINNESS. N C T /COLL 1M>000. 001
f .'e*CH GUINNESS N C T /COLL
Voacas TFR.FRON 0 6 0 4 0 1 2 S
'.OEMS* INT. APPLIEO TO llOECdS
, 3 2 8 . 0 0 0 . 00|
400.309.a3|
4.321.17
492.000.00
1.0«.309.83
1*046.631.00 mi

I
I
•3
3

"J,-. SS^iiE^

• M IWM .WWll a Ovtueiumn MUMCI3 *«* wnig m

GUINNESS .HAHON CAYMAN TRUST / CCLLSCE

 mmrnmMmmmm^.
l«t|l £

• m^&m

iTirtuixr O» ACCOU'I
G'yiNNESS+MAHON L
BANKERS
»ccaoHT <s t c T .11 catCiSi c/v 1 ? Call^J* GfWfl OuWIil 2 PO. So* £>5A *tfl

asUR sew « MISS s ACCOUNTNUUII* 73 \U 7 IIJ H

a CUMMiNC

£:<rs>>ui. c-itl.
LEDGER STATJIUtNT QATt 2-0 J * 'ifiZ

0I3IT cusoit UALANCC

DATE '/ALUS OATS
i r?Ti:>- • \ .v
BA^JICS a.louoHr-/o.vi.»»

•&T -
r-ii •.':'••
.:> V . -1 . - _ ...
f,
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;a -iv-^-v: v..

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/ 'tC-. " --i-.ir-.j.-:-.-.-..-.-

•V
tr
Th» ham* ^aione* Jiown cn \hta mtKMnt should OVIAO'l.nN 1AUNCII »«I UAHItl
and th# notlllid swipilv o' dljerxurw/.

H
 ANSBACHER LIMITED / COLLEGE
C/O D P C

TERNAL CALL D/A

UTCHMARKS Balance brought forward

11 OCT 88 LODGED
17 OCT 88 BXCH ANSBACHER LTD/COLLE

OCT88
ANSBACHER LIMITED / COLLEGE

RE A/C TC 431
» " Copy Statement **«

0.00
2,195,710.54 2,195,710.54
329,400.00 2,525,110.54
ANSBACHER LIMITED / COLLEGE
C/O D P C

<

Balance brought forward

ANSBACHER LIMITED / COLLEGE

RE A/C TC 431
»«* copy Statement ***
340617 ANSBACHER LIMITED / COLLEGE
C/O D P C

fERNAL CALL D/A

UTCHMAKKS Balance brought forward

N0V88

3 1
ANSBACHER LIMITED / COLLEGE

RE A/C TC 431
»«« Copy Statement ***
 COLLEGE TRUSTEES LIMITED
• PO BOX 122
' MIGNOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS
TERNAL CALL D/A

<

•UTCHMAKKS Balance brought forward

24 NOV 89 EXCH ANSBACHER LTD/COLLE
07 DEC 89 EXCH ANSBACHER LTD/COLLE

IDEC89
COLLEGE TRUSTEES LIMITED

RE A/C TC 431
*•« Copy Statement '»'

2,585,207.01
1,300,000.00 1.285,207.01
1,272,360.99 2,557,568.00

*
 COLLEGE TRUSTEES LIMITED
FO BOX 122
MIONOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS
[TERNAL CALL D/A

2UTCHMARKS Balance brought forward

29 DEC 89 Int. Applied To 31DEC89

9JAN90
 ) >
COLLEGE TRUSTEES LIMITED

RE k/C TC 431
» " Copy Statement »•»

2,557,568.00
63,852.60 2,621,420.60
COLLEGE TRUSTEES LIMITED
PO BOX 122
MIGNOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS

Balance brought forward

COLLEGE TRUSTEES LIMITED

RE A/C TC 431
**» Copy Statement »»«
 ) >
40617 COLLEGE TRUSTEES LIMITED
PO BOX 122
MIONOT PLATEAU
ST PETER PORT
GUERNSEY CHANNEL ISLANDS
BRNAL CALL D/A

rCHMARKS Balance brought forward

07 MAR 90 BXCH COLLEGE TRUSTEES L T
14 MAK 90 EXCH COLLEGE TRUSTEES LT
lOTKUKflT TO DATK

\R90
COLLEGE TRUSTEES LIMITED

RE A/C TC 431
*** Copy Statement ***

2,621,420.60
30,000.00 2,S»l,420.60
2,622,842.40
31,421.80 0.00
Appendix XV (147) Mr Tom Conaty
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Tom Conaty.

a) Guinness and Mahon Internal Memo of 20 May 1977.

b) Guinness and Mahon Credit Committee Minute of 17 May 1978.

c) Guinness and Mahon Credit Memo of 21 April 1988.

d) Guinness and Mahon account statement of 20 May 1983.

e) Annual Return of Tom Conaty Ltd of 13 December 1977.

f) Annual Return of Tom Conaty Ltd of 25 January 1978.

g) Annual Return of Tom Conaty Ltd of 21 February 1979.

h) Annual Return of Tom Conaty Ltd of 17 November 2000.

i) Letter of 13 September, 2001 from Arthur Cox enclosing statement of

Tom Conaty.
Appendix XV (147) (1) (a)
 a m

Tom Conaty Limited:

£65,000
Working capital

3 Auguat, 1977

Guarantee Fee flat

Suttdbly Secured,
Appendix XV (147) (1) (b)
 Minutes of the 204th Meeting of the
Banking/Credit Committee held at
17 College Green, Dublin 2, on
Wednesday 17th May, 1978.
T
<

PHBSENT: J.D.T. - M.B.O'K. - H.P.D. - GMcC - BMcL.-I.W.X. - M.C.X

MONEY MARKET:

Imminence of nake up day in both London It Dublin

heavily reflected In short end rates - position
aggravated by recent purchase and consequential
funding of GILTS.
A general "phone around" to potential depositors
has been trail received and has resulted In a deposit
of £300,000 from
Both Inflow and Sterling positions are in order.
£$n. lent ' 3m/f 0 1% turn bringing total
drawdown by then to fifm.
% '•
FOREIGN B2DCBANGX:
Trade figures on Monday pushed rate up to 1.8240.
Very heavy selling of Sterling out of Geneva yesterday
brought rate below 1.81.
Today - 1.8125.
We sold Swedish Kroner 600,000 to
•w
We have arranged an Irrevocable Letter of Credit
for U.S. $ 61,592 -
with forward cover to mld-Augusx.
765: Tom Conaty Limited
Amount: £50,000 (French Traac Equivalent)
Guarantee.
purpose: Guarantee to Gexnant Barl,
Hue Julien Groftleau, 44200 tfantes
Term ftSource
of Repayments: 20th May, 1B78 - 20th August, 1978
Rate: 1% P.A. (i.e.
Security: Suitably 8ecured
Appendix XV (147) (1) (c)
 NAME: TOM CONATY LIMITED &idtt Mamorandum
Submltud by: PQ'D
ADDRESS: Balmoral Fruit Market, Belfast. Equity Stakm No.
BUSINESS/
C.B. Approval: Vn/No
hmiWaiObiM
OCCUPATION: Fruit Broker. Oatt: NA
THIS APPLICATION: ' i*fctt**XXXX
(OthM mmwertrtw)
.-.fijHKHntftfl— AMOUNT: JGWJWflUStfc HATE: «*" — FEE: RLfJl&L
TYPE:
O/D JEljOOOJtg. WJR

PURPOSE/DRAWOOWN:
pwmltlrt prior to
) To secure working capital facility from Ulster Bank Limited. snmpMon of Hcurlty?
*)ecaetaml O/D facility. YES/NO

TERM OF F AClUtlESl REVIEW DATES:

(tension for 'one year 31.03.89

SOSJRCC OP REPAYMENT:

SECURITY; • llsddMonalsraaMnt
tMHtv, b«Mir>tv In antm?
.signed by Tom Conaty.
YES/MS
If |Im AhiHi mMraMly*

BApconcxMbNonhE/
(^nJ^OPPRg^AL: The guarantee has been In forea for a number of rears. We have been Informed J
for the year ended March, IflM are being prepared. He has stated that the
•T has be^n a successful one and the accounts will show the cofaipany to be In a healthy state. He has
iretail shops-all trading profltsbly.

ctensiea vecon mended.

nJQtsd PatRNiafBafiMMrr.. CREDIT COMMITTEE

(BalsnMAr Limit, whfehtw toyMWl Mi nut* /JtAJz

" RtconnntmStd

.
BOARD

Total Exposure £58,000

>
 ««"••« teetXM
G+M GUINNESS+MAHONL1
• 0AMKCR5 17CaNaa*On«iOijMbi2POLTI*hIoCS«S6AfTiariHmNO.
an*
'""*»* CUINM!SS MAMOM CAYHAN TRUST / COLLtCC PA6C NO.
CAUL A/C
LEDGER
STBRttNC b(.4U4*4
MAMMMNMIf
p/C CALL O/A .NX****!

£
OAK I curort MMW
MR.
•DALAlCe SROUCMT FORWARD joo.ooo.aq
13MVU ffXCM CUtNHMS H C T l, j eo. ool
IfcKAYBl •XCH COHATY TOM LTD 4.64T,2L3.n
•lNAY«3i OEP OFF CUIMMCSS M C T I
I

' <1

MHWMMMaiHItHnili:
lllla*!

CUTNNPSS MAHON CAYMAN MUST / COLLTCB

C/o 0 p c

rs
 THE COMPANIES ACT (NORTHERN IRELAND) I960

Annual Retnrn of a Company having a Share Capital

•ERED
rv?C W l A s required by Part IV of the Companies Act (Northern Ireland) 1960 ^ ~

Ife'S/j 5;r s ith te sfe;

- ^
Annual Return of. -Jl L
/ v ) r t iiiiiiiitep

-Limited*

made up to the.-, 3Jjj.£ day of. ^SS^kLSt^fZ thr fanrtn'n<l> du/"fifliC4ln

datR nf HIP Annniil Gaaaral Meeting fot the .yuiyjfrS
* Delete ^Limited" if not applicable

1. Address of registered office

..UllsjOZ/Z.

.Hi .szjgjzjsr V y-.fr, >- r.^v,:',-'

" V T "-A-
2. Station of the Company's registers, etc., if kept at an address other than the registered office ^
(a) Register of members SiS^ t V ^ K t rUjir-LQJOJL-

(b) Register of debenture holders

Presented by: Presenter's Reference- vas.

FORM No. 6A
•^/jfT'lBt:filingfee is f 10)
I
 Summary of Share Capital and Debentures*
(a) NOMIN. SHARE CAPITAL

. Nominal share capital £_ - divided

wvjtum into:
miu . i
sl .shares of.
_snares of.
..shares of.

(b) ISSUED SHARE CAPITAL AND DEBENTURES

Number
v.
2. Number of shares of each class taken up to the date of this return
/•»-Sch number must agree with the total shown in the list as held
existing members).

3. Number of shares of each class issued subject to payment wholly

in cash.

4. Number of shares of each class issued as fully paid up for a .... A> ° <\l£L
consideration other than cash.

•iflifssf

issued a3 paid up to the extent of £

per share • »
*«J'V^l
I , * <1
' _ shares
5. Number of shares of each class issued as partly paid up for a
consideration other than cash and extent to which each such
V":
share is so paid up. issued as paid up to the .xttat of £
per share
„/V shares
'i
issued as paid up to the exient of £..
per share h
Number Class
B
oV
...shares #
6. Number of shares (if any) of each class issued at a discount. As..GuU.£:~ — shares
- -shares

7. Amount of discount on the issue of shares which has not been

As &AJ £
written off at the date of this return.

Number Class

___..per share on 3...Q..O.—. Sb£^....shares

8. Amount called up on number £ per share on..._ — 1 shares
of shares of each class.
per share on. ...shares

* Only paragraphs 13 and 14 of this section relate to debentures. No particulars are required in respect of debentures under any other para-
graph of seccion 3.
w „ r i number and class of shares.
 9. Total amount of calls received

Number Class

10. Total amount (if any) agreed to be con- ..shares

sidered as paid on number of shares of
each class issued as fully paid up for a £ iu..D.<V_<i=. .on . shares
consideration other than cash.
- shares

11. Total amount (if any) agreed to be con- .......shares

sidered as paid on number of shares of
each class issued as partly paid up for a »f. /V O on - . . . shares
consideration other than cash.
-....shares

12. Total amount of calls unpaid . ... ,. f- Aj QMS

13. Total amount of the sums (if any) paid by way of commission in respect of any shares . \ / \ j o AJ & '
or debentures . . . . . • ^ . -• ". • ! • • '!« <• ; • f£ ./ —2j__
• • . - • • • ... . " *

14. Total amount of the sums (if any) allowed by way of discount in respect of any deben-- ; - Aj
1
tures since the; date of the last return J -

i: Number AM Class

....shares
15. Total number of shares of each class forfeited. —..shares
. share:

16. Total amount paid (if any) on shares forfeited

17. Total amount of shares for which share warrants to bearer are outstanding . . £_

18. Total amount of share warrants to bearer issued and surrendered "1 Issued:
respectively since the date of the last return. f
J Surrendered:

19. Number of shares comprised in cach share warrant to bearer, specify- \

ing in the case of warrants of different kinds particulars of each kind. /-

4. Particulars of Indebtedness

Total amount of indebtedness of the company in respect of all mortgages and charges
which are required to be registered with the Registrar of Companies under the Comp- (
anies Act (Northern Ireland) I960, or which would have been required so to be . ^ -
registered if created after 1st July, 1908. J —
t of Past and Present Members
<#r •
jS-'vj>
SS
y
+ 11
Account of Shares
*

Particulars of shares transferred since the date of the

Number of shares or last return, or, in the case of the first return, of the
amount of stock held by incorporation of the company, by (a) persons who - o Remarks
existing members at date are still members and (b) persons who have ceased
of return to be members v v . ,v. • ».: •; -;V :

Date oj registration of • » * f
Number transfer <
' .•'« vX
' .'C V/ .»
' "• • ' TV ' - ; :
(a) Co)
2.o.a.
L« : i^^^it'r^vX^^^vv^'^Li^
? 1 ' ^ i i ' f •
— —
..._ —
joa •zZZl- ** * >

X.

..;.--. v -rr .• :is « •

SJBCL
ni \
Ji i t' < r f
* t <r
j w* t+ Z A
IU
£ -•••••- v.-y/ T.v nvtr-\"
Ml ^ ^ M.j' •••na.y^.f.r^h r - • >
. .• •.•' •• . .. : • .. v"
0
5 : , * r

1
•a
3
,- ;
C9
en
a
«a3
2 . /-Vh j;

' ".' Lr.i-J.

.. —i.iw-Vf--.;^-; •• r-- " •

— —

: —

.. .. y, j
— —
B
o
z - —

- - -

- •-••
 •A
1
if'
. Particulars of Directors and Secretaries (Notes overleaf)
i s " " t £ • ' kXfS!
Particulars of the persons who are directors of the company at the date of thi return. H j ,, ** f 'f^JSeA&

Name Any former Christian lar't . ^ rrvWWfMC&tf-tf

ChKSMsfr^&y..
 Ill

Address Business occupation and particulars of other Date of Birth

directorships
m v ,;• . ' .! "-.v.. »(.;.•.....':(-n: ..
Ij4
V1 / I ' , |
g-rssjb-'-g
M ..." .. dbo "• ''
\ < j t•

""ftil ^^ -
/ -
^IlliiiSil^
r t1 * < 1' ' '1,
'' •

• "' 'v - " " " ' .Y ; • ; ;•„.. > M .1

: i Cf fl^jr^iy ijj; ,( ! : r : Jli; v--.
I
1 1- 1 f
2
• ... . ; ,.: • i: .;: • • . •• ••< .i-. .1. 1
"^ist f • • • ; : •••• • <
' . ]':' : , ' : • j;!.
L s : :
- in | >.
a
•o

$
Wl
£ ; •'•"• ••" ".'•' '" •":. ^J1 >;' »sj • jvl ij >. i
•1
t
)
K | "3
6 Signed... -.Director
<u
§
Signed1 .Secretary
IS
on
e Certificate to be given by a Director and the Secretary of every Private Company
S We certify that the company has not since the date of me last annual return (or, if this is thefirst return made,
o
z since the date of incorporation of the company) issued any invitatio^-tp the public to subscribe for any shares or
debentures of the Company.

.Director

Secretary

Further Certificate to be given as aforesaid if the Number of Members of the Company exceeds Fifty
We certify that the excess of the number of members of the company overfifty consists wholly of persons who,
under paragraph (b) of subsection (1) of section twenty-eight of the Companies Act (Northern Ireland) 1960, are not
to be included in reckoning the number of fifty.

Signed Director

Signed. ...,Senetary
 >TE Director" includes a:iy per:on .vho occupies 'he position ai l director ay '.vhaac
ee
av.so
r
«»ith whose directions or instructions the directors of the orrpan> i - accu -il V
~d
"Christian name" includes a forename and "surname", in the case at a neer or :
surname, means that rids.
"Former Christian name" and "former surname" do not lacluue:
(a) in the case of a peer or person usually known by a 3ntisn title different i
previous to the adoption of or succession to the title; or :
urname, the namv'afv m
(b) in the case of any person, a former Christian name or surname where that name or surname was changed'
i-xftshj
frir«a'» or
the person bearing the name attained the age of eighteen years or has been changed or: disused for
than twenty years; or : • -••••.• •.>•.•

(c) in the ease of a married woman the name or surname by which she was known previous to1 the nrnrriao^pSir- tmM
f
The names of all bodies corporate incorporated in Northern Ireland vmch he director is also£<
be given, except bodies corporate of which the company making the return is the wholly-owned'sufeiu^
corporate which are the wholly-owned subsidiaries either of the company ->r of another company'of IvhichTthe^^
is the wholly-owned subsidiary. A body corporate is deemed to be the ,viiolly-o wned subsidiary ofaxioth^jfSS;
members except that other and that other's whoily-ownea subsidiaries and its or then- nomineesyf the'sp^^aL
in the form is insufficient, particulars of other directorships should oe !t tea on a -eparate statement 4ttach^"Hv*i
form. • • ,• . . ''' ' y i W
"Dates of birth need only be given in the case of a company which is subject to section 176*ofthe'Comp;

re :ed under the law relating to companies for the time being in force m Great Britain and having provHoiL,
constitution which would, if it had been registered in Northern Ireland, entitle it f o rank as a private^Comp^n^
Where all the partners in afirm are joint secretaries, the name and principal office of thefirm" may tesfa$

;; " J
i
Certified Copies of Accounts

Except where the company is either a private company as defined by section 23 of the "CoxnpiuuesjActfmoi
Ireland) I960, or an assurance company which has complied with the provisions of section 7(4) of thc'ASu
Companies Act, 1909, there must be annexed to this return a written copy, certified both-by a,director" &nd'
secretary of the company to be a true copy, of every balance sheet laid before the company in general meeting^
the period to which this return relates (including every document required by law to be annexed'to the balance* &
and a copy (certified as aforesaid) of the report of the auditors, on, and of the report of the dirMtors~accom;
each such balance sheet. If any such balance sheet or document required by law to be annexed thereto is in
language there must also be annexed to that balance sheet a translation m English of the balance'sheet or
certified in the prescribed manner to be a correct translation. If any such balance 3heet as aforesaid or ticcumentn
/•""""Maw to be annexed thereto did not comply with the requirements of the law as in force at the date of the
.ospect to the form of balance sheets or documents aforesaid, as the case may be,, there must be made such
r > _ » f»< - « t. H
to and corrections in the copy as would have been required to be made in the balance sheet or document ii
make it comply with the said requirements, and the fact that the copy ha3 been 30 amended must be stated

Banking Companies
A banking company, in order to avail itself of the benefit of s. 380 of the Companies Act (Northern Ireland) 196ft
must add to this return a statement of the names of the several places where it carries on business. -- "

Qm.075632 5,000 3/73. N.6K.(N.I.)Ud. Gp-3162

Appendix XV (147) (1) (f)
 CRO/T '•hi.:-- ""

Ho. of Company-

S
? f
THE COMPANIES ACT (NORTHERN -IRELAND)

Annual Return of a Company fradag

Annual Return of.... To M

' - • • • • > • • • .Limited*

•• ••••
made up to the_ _day of. — : f o w r t c e a t h day afterJLhc

- $ « X DeJcto "Limited** if not applicable

jVi
'• • . v r ; h * ^ : ,;,.:;.../...-J.';
esi
1. Address of registered office

- •r J-i'.>.: ..-J^tjJ. i..^ii-'v: J f\%c Muz.ili*,'

?<i-. - 73 ST/ZSET
/0£LF#$ T J .

2. Situation of the Company's registers, etc., if kept at an address other ihaa the xegjstmd offlce J ;

(a) Register of members (<v£tJJ/v<rTn ^ ' tf^1* 7~

(b) Register of debenture holders-

Presented by: Presenter's Reference—

r -I
FORM No. 6A
(Use filing fee is £10)

Ju
 « T

SL . v A- ,B A '/>,

3.. jnmary of Share Capital and indentures*

(a) NOMINAL SHARE CAPITAL' ^ T vt 4 j

< »t > sr.

1. Nonninal share capital £_ .divided into:

2..Q....CL.CI ^jtebaOii&ciaj..

(b) ISSUED SHARE CAPITAL AND DEBENTURES

Number

2. Number of shares of each class taken up to the date of this return

(which number must agree with the total shown in the list as held
by existing members).

3. Number of shares of each class issued subject to payment wholly

in cash.

4. Number of shares of each class issued as fully paid up for a

consideration other than cash.

issued as paid up to
per share

5. Number of shares of each class issued as partly paid up for a

consideration other than cash and extent to which each such
share is so paid up. issued as paid up to the of L I iF
per share - M N M ^ vJJ
1 K'c
issued as paid up to the cxlmf jt S —-llrt~kK
& p—It
yr
^per share ^
Number Class
.shares

6. Number of shares (if any) of each class issued at a discount. .shares':

-will'
........shares

7. Amount of discount on the issue of shares which has not been f

written off at the date of this return.

Number Class

'£ _._/. per share on..... JLQ..C«L- jU^x^/.... shares "

8. Amount called up on number £ per share on shares
of shares of each class.
shares
£ ...per share on.

• Only paragraphs 13 and 14 of this section relate to debentures. No particulars are required in respect of debentures under any other para-
graph of section 3.
Insert number and class of shares.
 £ 3*0
5. Total amount of calls received

Number Class

10. Total amount (if any) agreed to be con- -shares

sidered as paid on number of shares of
each class issued as fully paid up for a _on -shares
consideration other than cash.
.shares

11. Total amount (if any) agreed to be con- ..shares

sidered as paid on nomber of shares of «* r
each class issued as partly paid up for a .on -shares
consideration other than cash.
.shares
•H&SaMig;

12. Total amount of calls unpaid .

13. Total amount of the sums (if any) paid by way of commission in respect of any shares' \
or debentures " . • • • • J*—
jSf^SSSIf/Wfit

14. Total amount of the sums (if any) allowed by way of discount in respect of any deben- \
tures since the date of the last return . . . • • • ~ - ~J £—
ft
Number »t)- ^ Class

.shares
15. Total number of shares of each class forfeited. .shares
.shares

16. Total amount paid (if any) on shares forfeited

17. Total amount of shares for which share warrants to bearer are outstanding

18. Total amount of share warrants to bearer issued and surrendered T Issued: £_
respectively since the date of the last return. V
J Surrendered: £_

19. Number of shares comprised in each share warrant to bearer, specify- \

ing in the case of warrants of different kinds particulars of eacf i kind. /.

4. Particulars of Indebtedness

Total amount of indebtedness of the company in respect of all mortgages and charges
which are required to be registered with the Registrar of Companies under the Comp-
anies Act (Northern Ireland) 1960, or which would have been required so to be A/OAJi
registered if created after 1st July, 1908.
 S3 ii

t» v. tx Account of Shares
Particulars of shares sransfzrr *d since the date of the
I '1 Number of shares or last return, or, in the case of the first return, of the
amount of stock held by incorporation of the company, by (a) persons who Remarks
existing members at date are still members and (b) persons who have ceased
-'*:>;.'. of return lobe members
a

§
Date of registration of .
Number transfer
WmF (a) (b)

JZ.a.£L
I.0.-0-

§
litl
IP? «s
3
M
ja
k
^'"'•Vj' £
\ >f
!
a
•ft
Si
a

§
1
6. Particulars of Directors and Secretaries (Notes overleaf) -w ii J. *•
"" S Ti
Particulars of the persons who are directors of the company at the date of tiu. ^cum.

Name Any former Christian tame

or names and sumom*.

&&JLLE. CS3JU&T-y
JZaj^J^^LjL __

Particulars of the person who is secretary of the company at the date of this return.

Name
Adik&sj
S&&JV2A QQAL^GULjL^L

*
 Address Business occupation and particulars of other Date of Birth
directorships
37 >9^£/2S<dajsto to rvi G-o
J £c-<Lf=^?s:T j T/.«Jt- caAS^iiZBklL

A,

§
I

JS

T3
aa
M
I
3•a
ja
5
43
a
•6b .Secretar

Certificate to be given by a Director and the Secretary of every Private Company

We certify that the company has not since the date of the last annual return (or, if this is the first return madi
O
since the date of incorporation of the company) issued any iavpjation to the public to subscribe for any shares c
z debentures of the Company.
^ 1 fi
I [/ .Directo

Further Certificate to be given as aforesaid if the Number of Members of the Company exceeds Fifty
We certify that the excess of the number of members of the company overfifty consists wholly of persons wh
under paragraph (b) of subsection (1) of section twenty-eight of the Companies Act (Northern Ireland) 1960, are n
to be included in reckoning the number of fifty.

Signed-. Direct

Signed. .Secreta
 ' VES: "Director" includes any parson who occupies the position of a direcaw by wnaacever n a r r j -aila^ j^f -..,,,7 ''" •f VJ , <
with whose directions or instructions the directors of the company are iccu tcired tu i c \ ><T«.:j 3
"Gtriatian name" includes a forename, and ••surname", in :hc case of a peer or oerson >jxunj;
surname, means that title. ;,•••,•-.,<.:-•
Mown i- »

"Former Christian .same" and "former s u r n a m e ' do not Include: ; * 1 ^-flvi? t - ^ ^ ' I
(a) in the case of a peer or person usuaiiy known by a British title differeuc trom ais surname .te aame bynbJfi,
J 1
% wS^
previous to the adoption of or succession to the title; or . tT^ ^ " ^ j i s4 '* 5 '" i r ^
(b) in the case of any person, a former Christian name or surname when hat j j m c or lamar^e -was ciua®d ar Pf
the person bearing the name attained the age of eighteen years or j s ^een »hanj*d . r Jtsused o r i paf^n ^ ^ '
than twenty or
(c) in the case of a married woman the aame or surname by which she vas JJIL. VU r"ruU3 O he T a m i j a , «-

The names of all bodies corporate incorporated in Northern Ireland > x which uirector j aLo a

. 'another:/ tt
members except that other and that other's wholly-owned subsidiaries and its or their nominees. If th& jprics'^
in the form is insufficient, particulars of other directorships should be listed on a se-araie >tatcmentatiacS^f
form." .. * * t " i * itcv * *
.,..„» f
Dates of
(Northern birth need
Ireland) 1960,only be given
namely, in the case
a company whichofisanot
company which
a private is subject
company to se-tion
or which, being17S of the comvmffcm
a private Companl^'^
subsidiary of a body corporate incorporated in the United Kingdom which is neither a -rr/ate company nora OTtntW/jJU'
<">cstered under the law relating to companies for the time being in force in Great'Br ta.n ana aavmg provisfo^Mla'S,
jStitution which would, if it had been registered in Northern Ireland, entitle it to rani j3 x prvate Corngaa"}^ - ^ ^ ^
Where all the partners in afirm are joint secretaries, the name and principal office of Jiafirm may ceatat

'Certified Copies at" Accounts

I
1 »

Except where the company is either a private company as defined by section 23 of the Comoaaies Act
Ireland) 1960, or an assurance company which has complied with the provisions of section oftlM
Companies Act, 1909, there must be annexed to this return a written copy, certified oodi by;, a .director aafeyfe
. secretary of the company to be a true copy, of ever/ balance sheet laid before the compaa/ in scneral meeting dm
the period to which this return relates (including every document required by law J M annexed the balancfr^
and a copy (certified as aforesaid) of the report of the auditors, on, and of the report of the Erectors iccorapan
each such balance sheet. If any such balance sheet or document required by law to be annexed thereto is m^a!
language there must also be annexed to that balance sheet a translation in SngiLn ox the balance sheet or docume'
certified in the prescribed manner to be a correct translation. If any such balance sheet as aforesaid or document jj*
hv law to be annexed thereto did not comply with the requirements of the law as in force at tha 'daie. of the -audit wl
pect to the form of balance sheets or documents aforesaid, as the case may be, meri must ce made juca w
to and corrections in the copy as would have been required to be made in the balance sheet or document in order
make it comply with the said requirements, and the fact that the copy has been 30 amended must be stated ih>
. , - •; - . 2s,1/
F
BanJung Companies tf^V
A banking company, in order to avail itself of the benefit of s. 330 of the Companies Act (Northern Ireland) I960,
must add to this return a statement of the names of the several places where it carries on business. ^ t

.:s '.•:

Dii032307 1m 7p~ 3LC Cpi39 SS6CO

 5/Ch' j T O M 'C' N A 7 Y LTD (N I j / L. 7 \ 1 O O

r i r i f i i Hiinfirvwitr

No. of Company...

THE COMPANIES ACT (NORTHERN IRELAND) 1960

Annual Return of a Company haying a Share Capital

TfE1960
As required by Part IV of the Companies Act (Northern Irela id)
REGISTERED
2 1sfEB 1979

Annual Return of

ji£>jw.__ jgr o » v q t

made up to the 5J day of.. ^81(being the fourteenth day after the
date of the Annual General Meeting for the year 19 ). ' ^ J ^ f ^ w l ^ ^ s ^ - \ A-y- '; v.,
• Delete "Limited" if not applicable

1. Address of registered office

i -J1A&ZE& ,„;<*W/< /

<£cfZL
tfrtttST f
4
2. Situation of the Company's registers, etc., if kept at an address other thairffia registered office

(a) Register nfn^mhfrr* (fL^T&l SH

(b) Register of debenture holders - (SJ ^rW" .J^CteHB-

Presented by: Presenter's Reference—

J^rnJ^Ay .

-j r n i.' >•' i
~ FORM No. 6A
• {T^ IHag^fee&SlO)
, Summary of Share Capital and Debentures*
(a) NOMINAL SHARE CAPITAL

1. Nominal share capital £ ^QO Q divided into:

y o o £> o fO>tAJ fHZ-

(b) ISSUED SHARE CAPITAL AND DEBENTURES

Number

2. /""Nmber of shares of each class taken up to the date of this return

aich number must agree with the total shown in the list as held
by existing members).

3. Number of shares of each class issued subject to payment wholly

1
in cash.

4. Number of shares of each class issued as fully paid up for a

consideration other than cash.

5. Number of shares of each class issued as partly paid up for a

—Consideration other than cash and extent to which each such
hare is so paid up. issued as paid up to the e cient oil..
per share

issued as paid up to the extent of £

per share
Number Class
..shares

6. Number of shares (if any) of each class issued at a discount. .shares

..shares

7. Amount of discount on the issue of shares which has not been f

written off at the date of this return. \£

Number Class

'£._. _ £ i per share o n — shares

3. Amount called up on number I £
of shares of each class. j
per share on
/
£ per share on shares
..._ shares

» Only paragraphs 13 and 14 of this section relate to debentures. No particulars arc required in respect of debenture under any other para-
irranh of section 3.
 ROXTOM CONATY LTD (NI) 0 2 7 ) 1 0 0

9. Total amount of calls received

Number Class

10. Total amount (if any) agreed to be con- .shares

sidered as paid on number of shares of
each class issued as fully paid up for a on •< -shares
consideration other than cash.
-shares

f't,
11. Total amount (if any) agreed to be con- -shares
sidered as paid on number of shares of
each class issued as partly paid up for a -on -shares
consideration other than cash.
.shares

12. Total amount of calls unpaid. . . . . .

...
* i» '

13. Total amount of the sums (if any) paid by way of commission in respect of any shares \
or debentures . . . . . . . . •• - - * >J

ct of
14. Total amount of the sums (if any) allowed by way of discount in respect of any deben- / \J
tures since the date of the last return

Number Class

-shares
15. Total number of shares of each class forfeited. . sharet
_sharo

16. Total amount paid (if any) on shares forfeited

17. Total amount of shares for which share warrants to bearer are outstanding

18. Total amount of share warrants to bearer issued and surrendered Issued
respectively since the date of the last return.
J Surrendered: £_

19. Number of shares comprised in each share warrant to bearer, specify- \

ing in the case of warrants of different kinds particulars of each kind, f-

4. Particulars of Indebtedness

Total amount of indebtedness of the company in respect of all mortgages and charges
which are required to be registered with the Registrar of Companies under the Comp-
anies Act (Northern Ireland) 1960, or which would have been required so to be
registered if created after 1st July, 1908.
 : r o / ''-•M C - I ' N A T Y L T r

List of Past and Present Memljers

 OM COMA ry L T D .. N , } ,, £ y ,O Q

Account of Shares
Particulars of shares transferred since the date of the
Number of shares or last return, or. in the case of the first return, of the
amount of stock held by incorporation of the company, by (a) persons who Remarks
existing members at date are still members and (b) persons who have ceased
of return to be members
Date of registration of
Number transfer

(a) Xb)

3oa.
yaw

y
 '3, CR< jN ATY (M •'27 1 '! GO 23

Address Business occupation and particulars of other Date of Birth

directorships

> cntu&urrfmji.
^bo

j _.

Signed.

Signei

Certificate to be given by a Director and the Secretary of every Private Company

We certify that the company has not since the date of the last annual return (or, if this is thefirst return made,
since the date of incorporation of the company) issued any invitation to the public to subscribe for any shares or
debentures of the Company.

Further Certificate to be given as aforesaid if the Number of Members of ti» Company exceeds Fifty
We certify that the excess of the number of members of the company over fifty consists wholly of persons whc
under paragraph (b) of subsection (1) of section twenty-eight of the Companies Act (Northern Ireland) 1960, are nc
to be included in reckoning the number of fifty.

Dircc£c
Signed \

Signed — -i-, ——jSecretai

 US: "Director" inclines any penon who ;ccupies the position •>1 i Jirsctor by w i u w -/er l a m j i d ^ ' a j j u .
•srith'whose directions or tuvtructions the directors ol the ccm
cmiv.wr if- accu-toraed -o id. "vv^ , (
"Christian aame" includes a forename, and surname" , in :ne of a pee, or -encn osw.l, W v ^ V i ',1'j | Is
surname, means that title.
'Former Christian name" and "former surname" do not inciudc:
I tL
fa) in the case of>S a peer or person usually 'mown by a British title different from us -ur-ai«, tte"ijura "
previous to the adoption of or succession to the title; or
(b) in the case of any person, a former Christian name or surname • vhere hat name ~r J u r a W w a V ^ . ' i j / u ^s
the person bearing the name attained the age of ei-jhteen years or lias oeen chunked * ilm-^Tvl'l 3 1 •<«*
than raenty years; or ™ ""
(c) in the case of a married woman the name or surname by which she was 'cnown j-?rsviaus
r* M
tiSst' iV "

be
corporate which are the wholly-owned subsidiaries either of tue company or ot another comnany^oi vicei
is the wholly-owned subsidiary. A body corporate is deemed to be the wholly-owned Jub idiarT'pf iahtA s'^V^Ij
members except that other and that other's wholly-owned .subsidiaries and its or their nominees!. l ^ ^ T ^ t
in the form ij insufficient, particulars of other directorships should be luted on a k a r a t e jtat^mir HhJtw/
form •'*"
• ' . ' • • . • • * » H ftp

Dates of birth need only be given in the case of a company which is suoject to section \7o of
:
(Northern Ireland) 1960, namely, a company which is not a private company or whichT being a privitf^ w

Where all the partners in a firm are joint secretaries, the name and principal office the firm bay
;•• rnM

CertLSed Copies of Accammto

Except where the company is either a private company as defined by section 23 of the ComsamAJ Act Oo'ffte
Ireland) I960, or an assurance company which has complied with the provisions of section* 7(4) o r ^ a a ^ n runca
v
Companies Act, 1909, there . must be . annexed
. to this return a written... copy, .eriified
. .J ' 1b^a
both \ ™di/^tor
«>-tfefjt?
- secretary of the company to be a true copy, of every balance sheet laid before ihe company In ^drai'i^iiaj^yJ
the period to which this return relates (including every document required by law to be anne-ted ro Ln^^atwdJaSj
and a copy (certified as aforesaid) of the report of the auditors, on, and of the report of the d •ctors ac^oi^j^
• each such balance sheet. If any such balance sheet or document required by 3a-v to be annexesi hereto 13 m a
. language there must also be annexed to that balance sheet a translation in English of the balanc J inesll ^
certified in the prescribed manner to be a correct translation. If any such balance- jlwat as Aforesaid or document^
/
"* s by law to be annexed thereto did not comply with the requirements of the law cu ia for« it the dale of the'iuc
respect to the form of balance sheets or documents aforesaid, as the case may be, there must be mad^juehld
to and conections in the copy as would have been required to be made in the balance jhe„t or document iaVr^
make it comply with the said requirements, and the fact thafthe copj haj been Jo xmeaded must be stated there

Baniing Companies ' ^

1
'e>i
A banking company, in order to avail itself of the benefit of s. 380 of the Companies Act (Northern Ireland) I960
must add to this return a statement of the names of the several places where it carries oh business. *

OOB2J3-t 5m 10/77 V/SM G p l 8 5 A / 7 i o - r

O O a S S b J 5m 5,73 A 7 9 6 8
Appendix XV (147) (1) (h)
 G/CRO/TCivi CONATY LTD (Nl) / 2 7 1 1 0 0

ANNUAL RETURN

COMPANIES REGISTRY <2/7 ^\. •

IDB HOUSE
64 CHICHESTER STREET Jl . tA-
BELFAST J*NI04849
BT1 4JX
TOW CON A TY UUllM,'
X ' c o m ^ y ^

PR LTD SH

The information printed below is taken from TRADE AND INVESI WifcHl
Companies Registry records as at the date shown.
S If this information requires amendment use the 1 5 MOW 2000
spaces opposite. Please read the notes for guidance
POST RECEIVED j
before completing the return. nnMPANlES RfcGiSTRYj

DATE OF THIS RETURN (See note 1) DAY MONTH YEAR

The information in this return should be made up to a
date not later than 2 5 / 1 1 / 2 0 0 0
Jit I I ' O

DATE OF NEXT RETURN

DAY MONTH YEAR
If you wish to make your next return to a date earlier
than the anniversary of this return please show the
date here. Companies Registry will then send a form
at the appropriate time.

REGISTERED OFFICE (See note 3)

This is the address registered by Companies Registry

BALMORAL LINK
BOUCHER ROAD
BELFAST

BT12 6SD

PRINCIPAL BUSINESS ACTIVITIES

 G / C r
O / T O M c o n a t v L T d

SISTER OF M E M B E R S (bee rtoiw w, 2 6

, ar "?ss must be in- Northern Ireland

If the information shown needs amendment,
give details below, and for secretary and
director particulars, the date of any change.

EGISTER OF DEBENTURE HOLDERS

See note 6)
his address must be in Northern Ireland

— ^

Particulars of a new director or secretary

must be notified on form 296 (see note 7)
Company Secretary

THOMAS MATTHEW
CONATY
13 FORTWILLIAM PARK
BELFAST

BT15 4AL
If this person has ceased to be secretary/ day MONTH YEAR
director please state when.

Particulars of a new director or secretary

must be notified on form 296 (see note 7)
Director
/± CL _s PfzQc£
MR THOMAS E
CONATY lo ' QoK
87 ANDERSONSTOWN ROAD Cg_
BELFAST
J l ^ A .

BTll 9BS
DATE OF BIRTH: 27/03/1921 DAY MONTH YEAR
NATIONALITY: IRISH
OCCUPATION: DIRECTOR
If this person has ceased to be a director/
secretary, please state when.
 G/CRu/TOM CONATY LTD (Nl) / 2 7 1 1 0 0 27

If the information shown needs amendment

give details below and the date of any
change.

DAY MONTH "YEAR

If this person has ceased to be director/

secretary please state when.
> . ~ . - '

Show any relevant current and previous

directorships.

DAY MONTH YEAR

If this person has ceased to be director/

secretary please state when.

Show any relevant current and previous

directorships.

DAY MONTH YEAR

If this person has ceased to be director/

secretary please state when.
 G/CRO/TOM CONATY LTD (NM / 2 7 1 1 0 0 28

' S S U E D S H A R E C A P I T A L (See note 8) AGGREGATE

Enter details of all shares in issue at the date CLASS NUMBER NOMINAL VALUE
of this return.

TOTALS

LIST OF PAST AND PRESENT MEMBERS

(See note 9) '•ifiV'ii
(Use attached schedule and additional
sheets where appropriate) Please mark
appropriate box
A full list is required if one was not included
with either of the last two returns There were no changes in
the period

A list of changes is
enclosed •• '
A full list of members
is enclosed

ELECTIVE RESOLUTIONS (See note 10)

(Private companies only)
If an elective resolution is in force at the date of this return to dispense with
annual general meetings, mark the box.

If an elective resolution is in force at the date of this return to dispense with

laying accounts in general meetings, mark the box.
•
CERTIFICATE

I certify that the information given in this

return is true to the best of my knowledge
and belief. SIGNED
Socrctafy/Director
(delete as appropriate)

DATE _ Q . \ L _ OO-

Cheques should be made payable to the This return includes

Department of Enterprise, Trade and continuation sheets.
Investment (DETI)

To whom should Companies Registry direct

any enquiries about the information shown in -T- t A . Co
this return?

Telephone Ext.
Appendix XV (147) (l)(i)
 ARTHUR COX
EARLSFORT CENTRE, EARLSFORT TERRACE, DUBLIN 2
TEL + 3 5 3 1 6 1 8 0 0 0 0 FAX + 3 5 3 1 6 1 8 0 6 1 8 D x 2 7 DUBLIN
mail@artKurcox.com kttp ://www.arthurcox.com

BELFAST LONDON NEW YORK

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BELFAST B T 1 6HD LONDON E C 4 M 7JE N E W YORK, N Y 10022

TELEPHONE + 4 4 2 8 9 0 2 3 0007 TELEPHONE + 4 4 2 0 7 2 1 3 0 4 5 0 TELEPHONE + 1 2 1 2 7 5 9 0 8 0 8

FAX + 4 4 2 8 9 0 2 3 3464 FAX + 4 4 2 0 7 2 1 3 0 4 5 5 FAX + 1 2 1 2 6 8 8 3 2 3 7

OI'K IMI-NRNXCI: VOI'R REFCRENCI;

AJL/sab
Direct Dial: 618 0425

13th September 2001

BY COURIER
STRICTLY PRIVATE & CONFIDENTIAL
ADDRESSEE ONLY

Ms. Mary Cummins,

Solicitor,
Office of the Inspectors to Ansbacher (Cayman) Limited,
Third Floor,
Trident House,
Blackrock,
Co Dublin.

Re : Our Client: Mr. Tom Conaty

Dear Ms. Cummins,

I am writing further to my letter dated 23 August 2001.

I have met with Mr Conaty and I enclose a statement which has been approved by Mr Conaty
which deals with the issues raised in the Inspectors' previous correspondence.

I look forward to hearing from you in due course.

Yours sincerely,

HOLJ
ANDREW LEN£G^

JAMES O'DWYER PAUL MCLAUGHLIN IAN A. Scorr JOHN G. FISH DANIEL E. O'CONNOR PETER MCLAUGHLIN ROBERT BOLTON JOHN V O'DWYER RONAN WALSH
DONOGH CROWLEY JOHN S.WALSH MICHAEL MEGHEN JOSEPH LEYDEN WILLIAM JOHNSTON EUGENE MCCAGUE NICHOLAS G. MOORE DECLAN HAYES
DAVID O ' D O N O H O E COLM DUGGAN CARL O'SULLIVAN ISABEL FOLEY JOHN MEADE CONOR MCDONNELL PATRICK MCGOVERN GRAINNE HENNESSY SEAMUS GIVEN COLIN BYRNE
CAROLINE DEVUN CIARANBOLGER GREGORY GLYNN DAVID FOLEY STEPHEN HEGARTY DECLAN DRISLANE SARAII CUNNIFF KATHLEEN GARRETT PADRAIG 6 RIORRAIN D R . MARY REDMOND
ELIZABETH B O T H W E L L WILLIAM DAY ANDREW LENNY JOHN MENTON PATRICK O ' B R I E N ORLA O ' C O N N O R BRIAN O ' G O R M A N MARK SAUNDERS

CONSULTANTS: VINCENT WALSH DENIS J . BERGIN CHETWODE HAMILTON N U L L MCLAUGHLIN DR. YVONNE SCANNELL D R . ROBERT CLARK
 STATEMENT OF TOM CONATY

This statement is made by me in response to the letter which I have received from the
Inspectors dated 31 July 2001 and to the enclosures to that letter.

I am 80 years of age and unfortunately my memory is not as clear as it once was.

However, I will endeavour to deal with the relevant issues as best I can below.

I remember that in or around the mid 1970s my company, Tom Conaty Limited, was to
receive a payment of the equivalent of approximately STG£50,000 from a French
customer. This payment was being made offshore and I decided to keep this payment
offshore and I then contacted Guinness & Mahon in Dublin as I knew that Guinness &
Mahon had offshore operations in the Channel Islands. I am unable to recollect who I
dealt with but I do remember that I was asked whether I would prefer the funds to be held
in the Cayman Islands or in Guernsey. I asked for the funds to be held in Guernsey as my
company carried on business there and it was therefore much more convenient for me.
To the best of my recollection, I was told that the deposit would be managed by a trust
company owned by Guinness & Mahon called College Trustees.

The deposit was then placed with Guinness & Mahon (Guernsey) and interest accrued on
the deposit (during a time of high interest rates). As far as I was aware the money was
held for my benefit by College Trustees with Guiness & Mahon in Guernsey.

From about the late 1970s I made periodic withdrawals from this deposit. I would call
into Guinness & Mahon's offices in Dublin and I would request a withdrawal and I would
then be paid in cash.

This position continued until the early 1990? when I became worried about the stability
of Guinness & Mahon. I was aware that a Japanese bank had become involved in
Guinness & Mahon and I then arranged for the deposit to be transferred to the Bank of
Ireland in the Channel Islands.

Having reviewed the documents provided by the Inspectors, I do recollect that a facility
was provided by Guinness & Mahon to Tom Conaty Limited, although I am unable to
recollect any specific details in relation to this transaction. However, I do recollect that
this facility was provided on the basis that I held funds with Guinness & Mahon in
Guernsey which would effectively secure the facility, although I do not recollect having
to ever execute any security documents in respect of the deposit in Guernsey.

I have never had any dealings, whether directly or indirectly with Ansbacher. I have been
advised by my solicitors that the likely reason why the Inspectors have corresponded with
me is that the monies deposited by me may have been placed, by College Trustees, on
deposit with Ansbacher (Cayman) Limited. If this is the case, then the transfer of these
funds occurred without my knowledge and was contrary to my instructions as I
specifically said that the money was to be deposited in Guernsey and not in the Cayman
Islands. In fact, I had never heard of Ansbacher until that name received publicity in
recent times.
Appendix XV (148) Mr Stephen Daly, deceased
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Stephen Daly.

a) Transcript of evidence of Mr Stephen Daly dated 8 June 2000.

b) Statement re file C lodgements and withdrawals prepared by Stephen

Daly.

c) Internal Memorandum of Guinness and Mahon Limited "Memorandum of

Addition" for College Trustees Limited dated 24 January 1978.

d) Letter of 2 May 2000 from Stephen Daly to Inspectors.

e) Statement of account in College Trustees re a/c TC 431 of 17 August

1990.

f) Statement of account in College Trustees re a/c TC 431 of 26 July 1988.

g) Acknowledgement of share purchase from Guinness and Mahon of 15 July

1991.
h) Letter of 21 March 1984 from College Trustees to Stephen Daly.
i) Letter of 5 May 2000 from College Trustees to Stephen Daly.

2. Correspondence received from or on behalf of Mr Stephen Daly.

a) Letter of 14 November 2001 from Kennedy McGonagle Ballagh to

Inspectors.
Appendix XV (148) (1) (a)
PRIVATE EXAMINATION OF STEPHEN DALY

UNDER OATH

ON THURSDAY, 8TH JUNE 2000

I hereby certify the

following to be a true and

accurate transcript of my

shorthand notes in the

above named interview.

Stenographer
 PRESENT

The Inspectors: MR. ROWAN FCA

MS. MACKEY BL

Solicitor to the Inspectors MS. M. CUMMINS

Interviewee: MR. STEPHEN DALY

 1 THE HEARING COMMENCED, AS FOLLOWS, ON THURSDAY 8TH

2 JUNE 2000.

3 MS. MACKEY: Good morning, Mr. Daly.

4 I will just introduce

5 myself. I am Noreen Mackey, one of the Inspectors

6 appointed, as you know, by the High Court to

7 investigate the affairs of Ansbacher. This is

8 Mr. Paul Rowan, my colleague and one of the other

9 two Inspectors. Now this is not a Court and it is

10 not a Tribunal.

11 A. I appreciate that.

12 MS. MACKEY: It is just an inquiry and

13 this is just an interview.

14 It is, however, under oath. We do wish to take your

15 evidence under oath and we just wanted you to be

16 clear about the position here. Now if we ask you

17 any questions that you don't know the answer to or

18 you don't remember the answer to, just simply say

19 that.

20 A. I will, yes, indeed.

21 MS. MACKEY: That you don't remember or

22 you don't know and that

23 will be sufficient. I will ask our solicitor,

24 Ms. Cummins, then, to administer the oath and we can

25 begin.

26

27

28

29

3
 1 MR. STEPHEN DALY HAVING BEEN SWORN WAS EXAMINED, AS

2 FOLLOWS, BY THE INSPECTORS:

3 1 Q. MS. MACKEY: Now, Mr. Daly, we

4 received your statement

5 and the documents you sent us in. Thank you very

6 much, they were very helpful. I think this

7 interview will be a matter of just clarifying and

8 going through what you have said and getting your

9 evidence on oath about it. Maybe one or two points

10 that weren't totally clear to us, you might be able

11 to clarify those if you recollect the events in

12 question.

13 A. Right.

14 2 Q. We might also just ask you to look at some of the

15 documents you sent us and maybe one or two others

16 that we have here and ask you to explain them to us,

17 if you can. That is basically how we want to

18 proceed.

19 A. Okay.

20 3 Q. Can I just for the record have a slight little bit

21 about your background? You have told us already in

22 your statement here that you are a retired

23 schoolteacher?

24 A. Correct.

25 4 Q. So if you could fill us in a little bit about that.

26 All your life from your university days, you were a

27 schoolteacher, were you?

28 A. Correct.

29 5 Q. Was this a primary or secondary primary?

4
 1 A. Primary.

2 6 Q. Primary schoolteacher. I think you began sometime

3 in the late 1950's or early 1960's to operate

4 charter flights from Ireland?

5 A. Correct.

6 7 Q. You continued to do that contemporaneously with your

7 teaching; is that correct?

8 A. Correct.

9 8 Q. During your holidays?

10 A. Correct, it was a summer activity.

11 9 Q. Yes. Now when did you retire from teaching?

12 A. On 30th June 1988.

13 10 Q. You continued teaching all your life?

14 A. I did.

15 11 Q. Do you now run a travel business?

16 A. I do.

17 12 Q. Since your retirement, is it?

18 A. Yes, correct. It is an educational travel company.

19 13 Q. I see. And that is based where?

20 A. That is based in Rathgar in my own home. It is a

21 one-man operation still.

22 14 Q. I see. Is it more or less the same as you were

23 doing all the time?

24 A. No, the initial period from 1959 through to 1974

25 were charters. These were Boeing 707's. But then

26 when the jumbo jets came into existence around that

27 time, it was impossible to charter aircraft

28 otherwise. It would not be practical.

29 Consequently, one, as it were, resorted to the

5
 1 educational programmes I was running for teachers

2 based at universities in the United States from 1959

3 right through in conjunction with charters. Through

4 the United States Office of Education and the State

5 University of New York at New Paltz in New York,

6 I inaugurated a three-week seminar so as to

7 introduce Irish teachers into the latest innovations

8 in American education.

9 15 Q. I see.

10 A. So that was a period for three weeks and then

11 followed an educational itinerary that would take

12 teachers en route to Boston, Philadelphia and

13 Washington D.C.. That was more or less to expand

14 their horizons, working with the National

15 Aeronautics and Space Administration people in

16 Washington D.C. so that teachers could actually view

17 satellites being launched and obtain the latest

18 ideas of that nature.

19 16 Q. I see. Do you run that business through a company

20 now, Mr. Daly?

21 A. I do indeed.

22 17 Q. The company is called?

23 A. ITP, Irish Teacher Projects.

24 18 Q. Is that a company incorporated in Ireland?

25 A. It is.

26 19 Q. A limited company?

27 A. Correct.

28 20 Q. When was it incorporated?

29 A. In 1974.

6
 1 21 Q. So you have been running it since then?

2 A. Yes .

3 22 Q. That is fine for background, thank you very much.

4 Now getting on to what we are actually concerned

5 with here and what you have explained to us. It

6 appears from your statement and the documents that

7 you sent to us that you had a trust based in the

8 Channel Islands with Guinness & Mahon Guernsey and

9 managed by College Trustees, is that correct?

10 A. I hadn't a trust. Guinness & Mahon led me into a

11 trust situation.

12 23 Q. Okay. Maybe we will start with how the whole thing

13 began. You first contacted Guinness & Mahon about

14 depositing money when?

15 A. I would say around -- first of all, the monies were

16 with AIF or Allied Irish Finance. I think the

17 scenario there was one of the Directors of AIF said;

18 'Listen here, I think that there is going to be an

19 investigation whereby having funds in the North

20 means no protection for you, because if there is an

21 agreement between both governments...'.

22 24 Q. If I could just stop you for a moment. We are not

23 so much concerned with the funds that you had in

24 other places such as AIF?

25 A. Yes, but I am coming to the point.

26 25 Q. I know, but what I really want to find out is that

27 you at a particular point approached Guinness &

28 Mahon in Dublin?

29 A. Yes .

7
 1 26 Q. Now around what time was that? Can you remember the

2 date?

3 A. I wouldn't know exactly. I would safely say maybe

4 about 1972 or 1971.

5 27 Q. Who did you meet there?

6 A. I met a person called Martin Keane.

7 28 Q. Martin Keane. Who introduced you to Guinness &

8 Mahon?

9 A. I read the business papers and I saw that you could

10 get a very good rate of exchange from Guinness &

11 Mahon.

12 29 Q. So you went into Guinness & Mahon and you met

13 Mr. Keane. This was your first meeting with him?

14 A. It was, yes.

15 30 Q. And you explained to him that you had money in the

16 North in AIF; is that right?

17 A. No, I had already taken the money in a suitcase to

18 Guinness & Mahon.

19 31 Q. Before that?

20 A. Well, the thing was that, that I am sure that when I

21 deposited the money initially I gave it to the

22 people who counted it and that same day Martin Keane

23 appeared on the scene.

24 32 Q. So do I understand you correctly to say that without

25 any prior contact with Guinness & Mahon, you went

26 with the money in the suitcase?

27 A. Naturally, I had phoned them.

28 33 Q. That is what I want to find out, your first contact

29 with Guinness & Mahon?

 1 A. Sorry. Well, it was by phone.

2 34 Q. So you phoned them and who did you speak to on the

3 phone?

4 A. I spoke to Martin Keane.

5 35 Q. So that was your first contact with Martin Keane?

6 A. Correct, yes.

7 36 Q. Did you know to ask for Martin Keane or did you just

8 ring them and ask them who you should speak to?

9 A. To be honest, I couldn't say.

10 37 Q. You can't remember. Anyway, you spoke to Martin

11 Keane?

12 A. Yes.

13 38 Q. Did you explain to him that you had funds in the

14 North that you wished to transfer?

15 A. That is true, yes, but the funds actually were in

16 Dublin.

17 39 Q. You had already brought them down at that stage?

18 A. No, sorry. It would appear that ostensibly having

19 funds in the North of Ireland meant that they were

20 with AIF. Whatever accountancy they had with the

21 Government, they would have AIF in the North of

22 Ireland but the funds were physically in Dublin. At

23 least that is what I conjured up, because I didn't

24 take the funds initially from the North of Ireland

25 to Dublin. The funds were in Dublin with AIF or

26 Allied Irish Banks.

27 40 Q. Where had you put them initially?

28 A. They would have started with my own bank.

29 41 Q. Which was?

9
 1 A. AIB Rathgar. AIB Rathgar would have just syphoned

2 them off to their subsidiary, which is Allied Irish

3 Finance. So in effect, there was no such thing

4 as...(INTERJECTION)

5 42 Q. So in fact you withdrew them from AIF in Dublin; is

6 that right?

7 A. AIB.

8 43 Q. AIB?

9 A. Well, AIF.

10 44 Q. When you wanted to put these into Guinness & Mahon,

11 you withdraw them from AIB in cash?

12 A. Yes, in cash, because AIF wanted no trail, as they

13 stated. So there was no cheque.

14 45 Q. I see. So these were profits from the charter of

15 your...(INTERJECTION)?

16 A. Yes, may I explain those? Initially, the Civil

17 Aeronautics Board had a regulation whereby an

18 organisation or an individual chartering for an

19 organisation would have to comply with regulations

20 which are known as Affinity Charters.

21 Affinity Charters were such that ostensibly the

22 costs of the aircraft was to be pro-rated by the

23 number of passengers and giving you -- if it was an

24 unusual situation. I was supposed to pay all my

25 expenses and they were doing things for a group of

26 people, a group of teachers and obtained no

27 remuneration, as it were. Because I was not a

28 company at the time, I was an individual. Actually

29 at that time too, I think income tax was about 65%

 1 or 68%. I didn't see why I should work night, noon

2 and day and pay everything over to tax. That was

3 the culture of the time. Naturally, every bank

4 manager would say put the money up the North.

5 46 Q. So this money came to you how? You were explaining

6 that you would appear to work without remuneration

7 but you actually were remunerated?

8 A. Naturally, the passengers of the aircraft would send

9 me money so that I in turn could pay for the

10 aircraft. Naturally also, you were working with the

11 unknown because you didn't know if you were going to

12 fill the aircraft. If you didn't fill the aircraft

13 and your maths were such that you divided a mythical

14 number which would be the configuration of the

15 aircraft and divided that by the costs and say that

16 XY is the amount that you are going to pay. But

17 naturally, if you didn't fill, you just couldn't go

18 back to the people. So you always added on a sum of

19 money in case you didn't fill.

20 47 Q. So you could make a profit?

21 A. Correct, yes, indeed.

22 48 Q. So it was the profits of this that were in this fund

23 in AIF?

24 A. That is true, totally.

25 49 Q. And that was the only source of those funds; is that

26 right?

27 A. Correct, yes.

28 50 Q. So getting back to Guinness & Mahon, you decided you

29 would change this money to Guinness & Mahon and you

 1 wished to have it offshore, is that basically what

2 it was?

3 A. No, I presumed initially that it would remain in

4 Guinness & Mahon but they were stating that it would

5 appear that the Irish pound and sterling were going

6 to split and that it would be far better to have

7 your money designated as sterling rather than Irish

8 punts.

9 51 Q. This was right from the start?

10 A. This was right from the start.

11 52 Q. This is what Martin Keane told you on the first day?

12 A. That is correct. That is why he said put your money

13 over in Guernsey.

14 53 Q. Right. So this suitcase of money that you brought

15 in, you understood on Day 1 that that was going to

16 Guernsey?

17 A. Yes, indeed.

18 54 Q. Did you get any independent financial or taxation

19 advice at that time about your money and what to do

20 with it?

21 A. No. Well, I could hear rumours and talk.

22 55 Q. But did you have an accountant, a personal

23 accountant?

24 A. No.

25 56 Q. You didn't have one at all?

26 A. I didn't.

27 57 Q. Did you consult a solicitor?

28 A. I didn't, no. I knew solicitors and everything

29 else, but I mean to say, I was not going to ask them

12
 1 direct questions as to what...(INTERJECTION).

2 58 Q. So the advice all came from Guinness & Mahon, would

3 that be correct?

4 A. The advice came from Guinness & Mahon, yes, indeed,

5 yes.

6 59 Q. So on that particular day, Mr. Keane suggested to

7 you that the money be put into Guernsey?

8 A. Correct.

9 60 Q. And you agreed?

10 A. I did.

11 61 Q. Did you sign documents that day opening an account?

12 A. I am sure I did. I am sure I did.

13 62 Q. Did you keep copies of those documents?

14 A. I wouldn't have. If I did, through the passage of

15 time, they probably were...

16 63 Q. What did Mr. Keane tell you about the account you

17 were opening?

18 A. All he simply told me was: 'This sum of money at the

19 moment is in Irish pounds. If you put it in

20 Guernsey prior to the split being announced by the

21 Government, that we are going to separate from

22 sterling, then, in effect, it would be classified as

23 sterling. Therefore, your amount of money will

24 appreciate and you will be outside the Irish tax

25 net.'

26 64 Q. Yes. Did he say anything to you at that time on

27 that day about setting up a trust?

28 A. No, he did not.

29 65 Q. He did not mention a trust?

13
 1 A. No. No, no.

2 66 Q. Now that sum of money you say in your statement or

3 in the little sort of mini statement you put at the

4 beginning of File C headed "Lodgements and

5 Withdrawals", do you have a copy of that with you

6 (Exhibit 1)?

7 A. I don't, no. I gave you all the copies.

8 67 Q. Right, we will give you a copy to look at. (SAME

9 HANDED). It is page 30 of our brief. You see there

10 at Paragraph C, you talk about two very large

11 lodgements; the first one: "As stated above -

12 £120,000."

13 A. Yes.

14 68 Q. That goes back up there to Paragraph A, where you

15 say:

16

17 "Martin Keane transferred a sum in the region of

£120,000 to Guinness Mahon Guernsey
18 which I brought to his bank in a
suitcase around December 1977."
19

20 A. Yes.

21 69 Q. Is your evidence that that was the opening of the

22 account or the beginning of the funds?

23 A. That was the opening of the account.

24 70 Q. Yes. Now can I just ask you then to look at a

25 document entitled: "Addition to Funds." It is in

26 your File C, I think. "Memorandum of Addition."

27 Page 47. You have that, do you, Mr. Daly (Exhibit

28 2) ?

29 A. I have indeed, yes.

14
 1 71 Q. You see that that Memorandum of Addition says: "On

2 24th January 1978, the trustees accepted the

3 following property and resolved to treat the same as

4 an addition to the settled funds of the trust." And

5 the figure is £119,665.55.

6 A. Yes .

7 72 Q. That would appear to be the sterling equivalent of

8 £120,000?

9 A. Yes .

10 73 Q. Would you agree that that would appear to be the sum

11 that you are talking about?

12 A. Correct.

13 74 Q. But here it is referred to as an addition to the

14 settled trust funds, which seems to indicate that

15 there was money there already?

16 A. My impression of that, the settled funds is that

17 they had funds -- in other words, they didn't give

18 me the impression that they were isolating me as an

19 individual but they had already funds there from

20 other sources.

21 75 Q. That is your understanding?

22 A. That is my understanding of it.

23 76 Q. But your own understanding is that these were the

24 first funds that you held?

25 A. Correct, they were my first funds, yes.

26 77 Q. Okay. Thank you very much. Now going back then to

27 your statement, do we have the first statement

28 (Exhibit 3)itself to have a look at? (SAME HANDED)

29 If you would turn to page 2 of your statement there,

 1 Mr. Daly, the third paragraph down:

3 "In 1977/1978, an official of Guinness Mahon Bank,

Mr. Martin Keane, told me of an
4 impending split."

5 Do you see that?

6 A. Yes .

7 78 Q. Now that is the conversation you have just described

8 to us so that was the beginning of this deposit?

9 A. Yes, that is true.

10 79 Q. You then say in the next paragraph:

11

12 "Since I was never in Guernsey, I later went there

out of curiosity."
13

14 How much later was that?

15 A. I asked myself that question and I could not say.

16 80 Q. Can you recollect whether it was a very long time

17 afterwards or probably within the same year or a few

18 months ?

19 A. It would appear to me that I was concerned where the

20 hell these monies were and I would say that it could

21 easily have been within six months or a year.

22 81 Q. Yes, it might have been some relatively short time.

23 A. Yes .

24 82 Q. There, you were told to contact a Mr. John

25 Lipscombe, who told you that the funds were acquired

26 by College Trustees, of which he was the Director,

27 and you were annoyed about this because you had not

28 known this?

29 A. I had never been informed.

 1 83 Q. Yes. So that was the first you learned that College

2 Trustees were looking after your funds?

3 A. Correct.

4 84 Q. You then go on to say in the next paragraph:

6 "I was told that this was in my own interest."

7 Now by that, do you mean that it was in your own

8 interest that College Trustees was looking after the

9 funds, is that what they told you?

10 A. It would appear when that was stated to me, it was

11 that 'the monies are no longer in your own name.'

12 85 Q. Now that is what I am coming to. Did Mr. Lipscombe

13 say that to you?

14 A. He did.

15 86 Q. Whose name did he say they were in?

16 A. They were in College Trustees'.

17 87 Q. They were in the name of College Trustees?

18 A. Correct, yes.

19 88 Q. Not just being managed by them but in their name?

20 A. No, no, in their name.

21 89 Q. Right. You then go on to say: "I was asked to fill

22 out a letter of wishes."

23 A. Correct.

24 90 Q. Now what did he say to you about that? When he

25 produced that letter of wishes to you, what did he

26 say that was?

27 A. If I died, who was I going to give the money to?

28 And I just thought of my own relatives.

29 91 Q. Did he say to you at that stage that this was a

17
 1 trust?

2 A. He did.

3 92 Q. He did tell you?

4 A. He did, yes.

5 93 Q. I see. So at that point, at that meeting with

6 Mr. Lipscombe, you learned that your money was

7 actually in trust?

8 A. Correct.

9 94 Q. But you had not known that up to that point?

10 A. No.

11 95 Q. Did he tell you what the name of the trust was?

12 A. College Trustees.

13 96 Q. College Trustees were the trustees of the trust,

14 actually.

15 A. I beg your pardon. But that was the only name that

16 ever stuck in my mind.

17 97 Q. Very good. So he told you that in fact your monies

18 were in trust and that College Trusties were looking

19 after it?

20 A. Correct, yes.

21 98 Q. And that was it, it was no longer in your own name?

22 A. That is true.

23 99 Q. And then you wrote a letter of wishes?

24 A. That is true.

25 100 Q. Did you agree to all of this then when he told you?

26 A. I could see the logic of it from a technical tax

27 point of view that I was not going to have Stephen

28 Daly with all these funds, that I was going to have

29 this mechanism, and I looked upon it purely as a

18
 1 mechanism, whereby College Trustees would be

2 responsible and, as it were, own the monies. But

3 through the letter of wishes, that should anything

4 happen to me my funds would be distributed to those

5 I had put on the letter of wishes.

6 101 Q. Did he show you on that occasion a trust deed?

7 A. No. If he did, all I did was just sign whatever

8 document he asked me to sign.

9 102 Q. Did he explain to you what a trust was or did you

10 understand what a trust was?

11 A. In my own layman manner, I presumed a trust was a

12 legal document or a legal instrument whereby my

13 monies would be protected by the law of what they

14 were trying to inform me about it.

15 103 Q. Did he explain to you that in order to create a

16 trust, someone had to transfer the funds to trustees

17 who then looked after it legally? In other words,

18 that you would have to transfer your funds to

19 trustees lawfully and legally? Did they explain

20 that to you?

21 A. To be quite honest, I wasn't transferring the funds.

22 I didn't know what had happened to the funds but

23 Guinness & Mahon had transferred funds. This is

24 what annoyed me, that Martin Keane never told me

25 that on the funds reaching the shores of Guernsey,

26 they were going to go into a trust. But because

27 I was quite concerned myself, I just wanted to find

28 out was there a bank, a physical building and what

29 kind of a set-up was it. I simply happened to meet

19
 1 John Lipscombe.

2 104 Q. Did you not ask Mr. Keane for these details before

3 you went over?

4 A. No. As far as I was concerned, I was giving my

5 monies into the hands of Guinness & Mahon who had a

6 branch in Guernsey.

7 105 Q. But as you just said now, you were concerned a bit

8 about it and wondering was this a bank?

9 A. Naturally. Well, I suppose that word "concern" has

10 to be tinged with the fact that I had never been to

11 Guernsey before and that, okay, I had some holiday

12 and I went over just on a day basis. So the concern

13 is not...

14 106 Q. In any event, Mr. Keane did not tell you, you are

15 quite clear about that, that the money was in trust?

16 A. Very clear.

17 107 Q. And the first that you learned of it was from

18 Mr. Lipscombe?

19 A. Correct.

20 108 Q. Was it Mr. Lipscombe who told you that the number of

21 your account was "TC431"?

22 A. I doubt if that registered with me.

23 109 Q. You have that in your statement (Exhibit 3), in that

24 paragraph?

25 A. What paragraph was it?

26 110 Q. The fifth paragraph down on page 2, the last

27 sentence.

28 A. My number was "TC431". But that is now like

29 somebody now being branded with a number on his

20
 1 wrist.

2 111 Q. What I am asking you is did Mr. Lipscombe give you

3 that number?

4 A. No, he didn't.

5 112 Q. So when did you learn that that was your number?

6 A. I think when I forced Mr. Lipscombe to tell me what

7 he was doing with my monies.

8 113 Q. On that day?

9 A. No, not on that day. You will recall a 1984

10 document there when I went over and I asked

11 Mr. Lipscombe and he said that they were with

12 Rothschild.

13 114 Q. Yes, you referred to that in your statement.

14 A. I presume that it was at that stage I might have

15 learned the number of TC431.

16 115 Q. I see. Now does the name Creebridge Investments

17 mean anything to you, Mr. Daly?

18 A. Sorry.

19 116 Q. Creebridge Investments?

20 A. Never heard of it.

21 117 Q. You never heard of Creebridge Investments?

22 A. No.

23 118 Q. If we can look again at your File C there, your

24 document "lodgements and withdrawals" (Exhibit 1),

25 you refer there at Paragraph D to a withdrawal of

26 £10,000 cash from Guinness & Mahon Dublin on 2nd

27 August 1990?

28 A. Yes.

29 119 Q. "A Mr. Murray or a Mr. Farrelly of Guinness & Mahon

21
 1 Dublin facilitated me in this regard."

2 A. Yes .

3 120 Q. Can you tell me how that came about, that you

4 withdrew money from Guinness & Mahon?

5 A. I called up Guinness & Mahon and I asked them could

6 I have £10,000 of my own money and could they get it

7 for me.

8 121 Q. So you were talking about the money that was in

9 Guernsey?

10 A. I was, yes.

11 122 Q. But why would you ring Guinness & Mahon in Dublin

12 about that?

13 A. The thing is this, they were the parent body and

14 they had direct contact with Guinness & Mahon in

15 Guernsey.

16 123 Q. In relation to your account?

17 A. Correct.

18 124 Q. Had you had contact with them before in relation to

19 your account?

20 A. With regard to -- well, I believe that College

21 Trustees and Guinness & Mahon were one and the same

22 operation.

23 125 Q. I am more concerned to know what actually happened

24 or what you were actually told than with your

25 interpretation of the events at the moment. But

26 what I am really concerned to find out here is why

27 did you believe you could ring up Guinness & Mahon

28 in order to withdraw money that you had in Guernsey?

29 Had anyone in Guinness & Mahon given you to

22
 1 understand that you could do that?

2 A. I am sure I felt myself that I could justify my

3 demand.

4 126 Q. But had anyone in Guinness & Mahon told you this?

5 A. No.

6 127 Q. They hadn't?

7 A. They hadn't, no.

8 128 Q. And had you ever done it before?

9 A. No, this was my first withdrawal.

10 129 Q. Your first withdrawal at all from the accounts?

11 A. At all from the accounts.

12 130 Q. So you rang up Guinness & Mahon. Mr. Martin Keane,

13 was it?

14 A. No, Martin Keane was either not in my mind at the

15 time but I did know that there was a Mr. Farrelly

16 there, through relations of mine that their son was

17 in Guinness & Mahon. So I called up Brian Farrelly,

18 so far as I recall. I said; 'Brian, could you

19 engineer this for me?'.

20 131 Q. Did you tell him what you were talking about, your

21 particular account?

22 A. Yes, he knew all about it.

23 132 Q. Did you tell him it was a trust?

24 A. Well, he knew that too.

25 133 Q. How did he know?

26 A. The point is this; as far as I am concerned, and

27 this is a presumption on my part, that anybody with

28 monies that initially originated from Guinness &

29 Mahon to Guinness Mahon Guernsey to College Trustees

23
 1 were quite well aware of the line of communication.

2 134 Q. Right. This Mr. Farrelly, was he concerned -- I

3 mean, I presume not everybody in Guinness & Mahon

4 would know your personal affairs over in Guernsey so

5 was he a person who was dealing with the Guernsey

6 branch?

7 A. No, but I asked him could he find out could it be

8 done.

9 135 Q. But you said that he knew all about it anyway?

10 A. He knew all about it when I finished talking to him.

11 136 Q. He only knew about it because you told him?

12 A. That is true.

13 137 Q. That was my first question. Did you explain to him

14 that you had a trust in Guernsey?

15 A. I did, yes.

16 138 Q. Up to that, he didn't know anything about it?

17 A. I don't know, I don't know.

18 139 Q. You told him that you had monies in trust and that

19 your account number was "TC431", did you?

20 A. I didn't. I wouldn't have told him that.

21 140 Q. So how would he know?

22 A. I am quite certain that all he would have to do was

23 ring up Guinness & Mahon in Guernsey and then that

24 particular request would be forwarded on to a person

25 called Brian Ellis. He was the person when Mr.

26 Lipscombe retired.

27 141 Q. Did you explain to Mr. Farrelly that this money was

28 not in your own name over there? How would he know

29 to refer to it?
 1 A. That is a very good question. I don't know.

2 142 Q. So what exactly did you ask him when you rang up?

3 A. Could I have a loan of £10,000.

4 143 Q. A loan?

5 A. Well, he would know it wasn't a loan. But in other

6 words, I am sure I would have asked him, as I think

7 I was going to invest it in the Stock Exchange,

8 either Irish Life, they were all coming on-stream at

9 the time. And that is all I can say. You are

10 talking about what year? 1990, isn't it?

11 144 Q. Yes, 1990. But I am just wondering why you would

12 have asked him if you could have a loan. You were

13 talking about your own money?

14 A. I was talking about my own money, yes.

15 145 Q. Why would you put it that way?

16 A. I suppose a loan of your own money.

17 146 Q. One wouldn't get it, would they? You wished to use

18 some of your money that was in Guernsey?

19 A. Correct.

20 147 Q. And you believed that Guinness & Mahon in Dublin

21 would be able to organise that for you?

22 A. Yes .

23 148 Q. So nevertheless what you did was you rang up

24 Guinness & Mahon, a Mr. Farrelly, and you asked if

25 you could have a loan of £10,000, is that right?

26 A. Yes. Well, I am sure I didn't use those exact

27 words, but could he arrange to have £10,000 of my

28 money. Again, I may not have been as explicit as

29 that. If you wish to interpret, what I am trying to

25
 1 say is could I get £10,000 from Guernsey and they

2 knew what that would mean.

3 149 Q. Yes. Now a long time had passed since you first

4 went in to Mr. Keane with the suitcase?

5 A. Yes .

6 150 Q. Had you any contact with Guinness & Mahon in Dublin

7 in the meantime?

8 A. I am sure I had.

9 151 Q. In relation to your account in Guernsey or in

10 relation to something else?

11 A. In relation to my account in Guernsey.

12 152 Q. Right. So you would have been dealing through

13 Guinness & Mahon in Dublin in relation to your

14 account in Guernsey?

15 A. Correct. Yes, indeed.

16 153 Q. What dealings would you have had in relation to it?

17 A. I know that since John Lipscombe stated that he had

18 the funds with Rothschild and that they were

19 engaging in exchange, I was quite certain that I

20 wondered what on earth was the state of play with my

21 money, what form was it in and they would tell me.

22 154 Q. Guinness & Mahon would?

23 A. Correct.

24 155 Q. Was your money in different currencies?

25 A. It was, placed by College Trustees through

26 Rothschild.

27 156 Q. Right. On whose advice had you put it into

28 different currencies?

29 A. I didn't put it in.

 1 157 Q. You didn't ask to have it put in?

2 A. It would be Brian Ellis that would be managing that.

3 158 Q. But would he have put it into different currencies

4 on your instructions?

5 A. Not necessarily on my instructions.

6 159 Q. Then whose?

7 A. I am sure that if he wanted to maximise whatever

8 monies that he was managing, they were the trustees,

9 they were the managers. My connection with him was

10 he would call me and state; 'You owe us and we have

11 deducted from your account our fees and your money

12 is either in sterling or it is in Deutsch marks or

13 it is in dollars.'

14 160 Q. And you would be happy with that?

15 A. I would be happy with that.

16 161 Q. But he would tell you on each occasion which it was

17 in?

18 A. He would, yes.

19 162 Q. Were you aware -- well, you are now because you sent

20 us copies of the statements -- that you had a dollar

21 account, a Deutsch mark account...(INTERJECTION)

22 A. Yes, indeed. But I didn't have exact sums.

23 163 Q. Yes. Now the money that you withdrew on 2nd August

24 1990, you say that that is £10,000 cash?

25 A. Yes.

26 164 Q. Could it have been 10,000 Deutch marks?

27 A. No. Well, if it were 10,000 Deutch marks, certainly

28 I didn't get it in Deutch marks.

29 165 Q. Right. Can I ask you to look at page 90 of our

27
 1 brief, which is a Guinness & Mahon statement. This

2 is a statement issued by Guinness & Mahon in Dublin.

3 As you can see there, the date on it -- do we have

4 the date on it (Exhibit 4)?

5 A. 2nd August 1990.

6 166 Q. That is right. The cash withdrawn: 10,000.

7 That equates with the date and it equates with the

8 amount. But over on the left-hand side of that, you

9 can see the word Deutsch marks: "External Call D/A,"

10 which is deposit account, "Deutsch marks." Do you

11 see that there?

12 A. Yes, indeed, I see Deutsch marks.

13 167 Q. So this is a Deutsch mark account?

14 A. I don't know whether it is a Deutsch mark account.

15 168 Q. It is stated to be a Deutsch mark account. If you

16 see up at the top there where the heading is:

17 "College Trustees." Do you see that?

18 A. Yes .

19 169 Q. Over to the right of that, you have College Trustees

20 again and then you have "re account TC431."

21 A. Yes .

22 170 Q. So that refers to your account?

23 A. Correct, yes, it does.

24 171 Q. But it is an account then in the name of College

25 Trustees re "TC431" held in Guinness & Mahon in

26 Dublin in Deutsch marks from which 10,000 Deutsch

27 marks were withdrawn on 10th August 1990?

28 A. Yes. I have presumed that that was punts.

29 172 Q. Did you get it in cash or in a draft or what way was

28
 1 it?

2 A. As far as I know, I got it in cash.

3 173 Q. So perhaps it was taken out of a Deutsch mark

4 account but turned into Irish currency for you?

5 A. More than likely, yes, indeed.

6 174 Q. Which would mean that it wasn't exactly £10,000,

7 could that have been possible?

8 A. I wondered why and I thought it was punts and that

9 it was being used to purchase some of the shares

10 that was floating at the time.

11 175 Q. I see. Were you aware that you had a Deutsch mark

12 account in the name of College Trustees in Guinness

13 & Mahon in Dublin?

14 A. Yes, I did indeed.

15 176 Q. In Guinness & Mahon in Dublin?

16 A. The thing is this; I am not an accountant and the

17 monies I thought all along were in Guernsey but then

18 they could be in Dublin.

19 177 Q. When you say that they could be in Dublin, did you

20 know they were in Dublin or that any of your money

21 was in Dublin?

22 A. I presumed that this interlinkage between Guernsey

23 and Dublin, that as far as I could see, the monies

24 could be in either Guernsey or Dublin. They were

25 just writing bits of paper.

26 178 Q. Yes, I see. Very well. Anyway, we have established

27 now that your money was in a trust managed by

28 College Trustees in the Channel Islands in Guernsey

29 as far as you knew at the time?

29
 1 A. Yes.

2 179 Q. Now can I ask you to look at another statement from

3 Guinness & Mahon in Dublin. This is page 59

4 (Exhibit 5) (SAME HANDED TO THE WITNESS). Now this

5 is an earlier one in the same series that we just

6 saw the withdrawal from there. This time, it is

7 headed: "Guinness Mahon Cayman Trust/College." Do

8 you see that?

9 A. I do.

10 180 Q. Up at the top again on the right: "Guinness Mahon

11 Cayman Trust/College re account TC431."

12 A. Right, okay.

13 181 Q. What this is, I will just explain it to you, this is

14 an account held in Guinness & Mahon in Dublin in the

15 name of Guinness Mahon Cayman Trust, which was a

16 former name of Ansbacher?

17 A. Yes.

18 182 Q. Ansbacher originally was called Guinness Mahon

19 Cayman Trust?

20 A. Yes.

21 183 Q. With the reference "College" and I do not know if

22 you are aware from the media or aware from your own

23 knowledge that around 1981, College Trustees placed

24 some of the funds that it held on behalf of Irish

25 residents in an account in Guinness Mahon in Dublin

26 called Guinness Mahon Cayman Trust. In other words,

27 then invested them in Ansbacher?

28 A. Yes.

29 184 Q. That account was called Guinness & Mahon Cayman

30
 1 Trust/College Trustees?

2 A. Yes .

3 185 Q. That is what this is and it has an individual

4 reference to your particular account so that your

5 particular funds can be identified?

6 A. It has, yes.

7 186 Q. So this is the link between College Trustees and our

8 investigations, as far as you are concerned?

9 A. I know, yes.

10 187 Q. I just wanted to point out to you why we are looking

11 at your affairs at all.

12 A. May I say that I had often heard of the word

13 "Ansbacher" through the press in relation to so many

14 different people and I was quite content that my

15 particular funds were in Guernsey. Then to my

16 horror, I said 'I am linked', but I didn't know how.

17 188 Q. Yes. This is how. It was College Trustees placing

18 funds on deposit. But I accept that this may have

19 been done without your knowledge.

20 A. Certainly.

21 189 Q. But on the face of this document, would you agree

22 that this relates to your funds?

23 A. It does indeed.

24 190 Q. You are "TC431"?

25 A. I am indeed, yes.

26 191 Q. And this is your Deutsch mark funds here?

27 A. Yes .

28 192 Q. Held, as it happens, in this account of Ansbacher in

29 Guinness & Mahon?

 1 A. Correct. At the very beginning when I stated that I

2 was shocked and surprised and a bit annoyed that I

3 had never been told by Martin Keane about these

4 College Trustees and that there was a fait accompli,

5 that they had my funds and I did not authorise nor

6 did I know.

7 193 Q. I understand, yes. Just to finalise the whole

8 picture then, you have told us in your statement and

9 you have provided us with documents, very kindly,

10 that you settled up your affairs with the Revenue in

11 1994?

12 A. I did, yes.

13 194 Q. But is it the case, and we have to ask this for the

14 record, that up to that date you had not in fact

15 disclosed to the Revenue or you were not disclosing

16 at the time?

17 A. None whatsoever.

18 195 Q. Not alone the interest accruing on these accounts

19 but the monies that you had lodged to them?

20 A. Correct, yes, that is true.

21 196 Q. But then you sorted all of that out?

22 A. I did, yes.

23 197 Q. Now I think we will just take a 10-minute break and

24 you can have a cup of tea or coffee there. Then we

25 will come back and continue, we may not be much

26 longer. Thank you, Mr. Daly.

27 A. Okay.
?R
z, o
29 SHORT ADJOURNMENT
 1 MS. MACKEY: Now, Mr. Daly, we just

2 have really one or two

3 more questions which Mr. Rowan would like to ask

4 you. I don't think we will be needing to keep you

5 much longer.

6 198 Q. MR. ROWAN: Mr. Daly, in your

7 statement (Exhibit 3) to

8 us on page 2 of your letter, at the top in the

9 second paragraph, you say:

10

11 "The monies from my trans-Atlantic operation

profits to the United States were
12 placed on deposit with Guinness & Mahon
on a rollover basis and were only used
13 by me as stated on the document in File
C marked "withdrawals" on specified
14 dates as per my dairy."
15 A. Yes.

16 199 Q. So you have diary records of these matters?

17 A. No, I have not. I have a personal diary and if per

18 chance I note something special, I would put it in

19 it. I just happened to go back on an old bunch of

20 diaries I had and I was happy to see that in

21 endeavouring to answer all your questions, I just

22 flicked through my personal diaries and I saw that

23 on 2nd August I had withdrawn a sum of £10,000, I

24 put down £10,000.

25 200 Q. I mean, a diary is a contemporaneous record, I

26 suppose, is it not?

27 A. It is indeed, provided it deals with -- well, it was

28 dealing with my personal life because I had no need

29 to be concerned with the in and out of monies which

33
 1 were not taking place.

2 201 Q. In terms of keeping or maintaining a contemporaneous

3 record, I put it in an extravagant sort of way, but

4 if you had withdrawn £10,000, or 10,000 punts,

5 I think you said, you wouldn't have written down

6 10,000 punts if you had withdrawn 10,000 Deutsch

7 mark?

8 A. That is a good point. To be honest with you,

9 I cannot answer it. I do know that I spotted in

10 leafing through the various pages that I had

11 withdrawn 10,000. I presume that it was 10,000

12 punts.

13 202 Q. Can I ask you then as a way of clarifying this

14 because I suppose there is a way of clarifying it,

15 you wanted to buy into some equity stocks?

16 A. I would presume so.

17 203 Q. I think I am right in saying that you asked Guinness

18 & Mahon to acquire those on your behalf?

19 A. Correct.

20 204 Q. So that you would have given that money to Guinness

21 & Mahon?

22 A. I did not give them the money. As far as I can

23 recall, I asked them to use the monies that I knew

24 they could get access to for the purchase.

25 205 Q. So effectively, by saying to them; 'Go to my deposit

26 and get the money out to buy the shares with.', that

27 would effectively have been a withdrawal as well,

28 wouldn't it?

29 A. That is true.

34
 1 206 Q. When was that?

2 A. 2nd August. That is the one you are referring to,

3 is it not? 10,000?

4 207 Q. I am just a little confused, which is what I am

5 trying to clarify, of course, is that earlier in

6 your interview we thought we were dealing with a

7 confusion in August of you withdrawing 10,000 punts

8 when the record we had showed 10,000 Deutsch marks.

9 Are you saying that those are different issues?

10 A. To be honest with you, I am not sure because I never

11 asked Guinness & Mahon what precisely is the state

12 of the amount of money; are they in Deutsch marks,

13 sterling, whatever. So all I can tell you is that

14 on leafing through my diary, I saw a withdrawal of

15 10,000 punts, or which I thought were punts, I am

16 sure. This is 10 years ago.

17 208 Q. Yes, of course.

18 A. Consequently, I cannot be specific other than the

19 fact that, to the best of my knowledge, I withdrew

20 £10,000.

21 209 Q. Maybe we will just clarify what you had said to us

22 earlier, that the £10,000 punts, I think you said

23 you got in cash?

24 A. As far as I can recall, yes.

25 210 Q. You said that you thought you got it in cash?

26 A. Yes, yes.

27 211 Q. So that that money was not used for your

28 investments ?

29 A. No, it would not be used, no.

 1 212 Q. It was used for some other purpose?

2 A. Yes, and I am trying to establish the purpose.

3 In fact, when I quizzed myself as to what was this

4 10,000 used for, I initially thought could it have

5 been for the acquisition of shares in Irish Life or

6 Greencore or whatever else, stocks that were

7 available at the time. But I do know it was the

8 only time that I ever used what I thought were

9 personal monies.

10 213 Q. But I think just so that we don't end up being

11 confused and in order to clarify things, you don't

12 believe that the 10,000 punts which you believe you

13 got in cash from Guinness & Mahon, you don't believe

14 that that was used for acquiring equity stocks?

15 A. I think you are quite right, that if I per chance

16 got £10,000 in notes or whatever, that it would

17 certainly not have been used for the acquisition of

18 stocks and shares.

19 214 Q. Alright. In the alternative, you did say a few

20 minutes ago that you believed that the money which

21 was used by Guinness & Mahon to acquire equity

22 stocks on your behalf was money which you believed

23 they were able to get out of your deposit account?

24 A. Yes.

25 215 Q. Can you remember broadly, Mr. Daly, what value of

26 stocks you instructed them to buy and what were

27 those stocks?

28 A. I know that one was Irish Life, I think. In fact,

29 I did enclose two documents relating to the

36
 1 acquisition.

2 216 Q. There was a reference to Irish Life shares and there

3 was also a reference to Greencore shares?

4 A. That is right, yes.

5 217 Q. Were there others?

6 A. That they had purchased on my behalf?

7 218 Q. That you instructed them to purchase.

8 A. There may have been. You are talking a span of

9 35 years, nearly.

10 219 Q. No, I thought we were talking about 1992 otherwise?

11 A. Oh certainly not, that is the definite answer to

12 those. It could have been a share called Cable &

13 Wireless, but I presume that was done in the 1980's.

14 220 Q. At page 50, (SAME HANDED) This, Mr. Daly, is a

15 Guinness & Mahon contract note showing that on

16 15th July 1991, they purchased on your behalf 5,000

17 Irish Life shares (Exhibit 6)?

18 A. That is right.

19 221 Q. This further document is a letter on Guinness &

20 Mahon stationery dated 21st June 1991 showing that

21 they enclosed a share certificate for 1,000 shares

22 in Greencore (Exhibit 7)?

23 A. That is right. I supplied that letter myself.

24 222 Q. Yes, of course. So that was in 1991 that those

25 shares were being purchased?

26 A. Yes .

27 223 Q. The impression that you gave us earlier was that the

28 cost of those acquisitions would have been

29 effectively money taken from your deposit account?

37
 1 A. That is quite true.

2 224 Q. Can you remember now whether there were any other

3 share purchases around that time?

4 A. As far as I can gather, no. But then again, it

5 would all depend on what -- the big features, Irish

6 Life was one, Greencore. There may have been one in

7 the 80's which is known as Cable & Wireless.

8 225 Q. Would Guinness & Mahon also have acted for you in

9 that case?

10 A. Oh, they would have.

11 226 Q. Following this interview, would you please ask

12 Guinness & Mahon to provide you with full details of

13 any investments that they acquired or disposed of on

14 your behalf during the period that we have been

15 considering?

16 A. Certainly. I have already asked them.

17 227 Q. Was it a fact the funds for share acquisitions came

18 out of your trust account?

19 A. Certainly. May I state that I have already written

20 to them because they had sent me a letter earlier to

21 the effect that they were in negotiations with

22 Revenue or with yourselves and consequently that

23 should I require any documentation to write to them.

24 On the foot of that letter, I enclosed that very

25 same letter and I asked them; 'Now I need

26 documentation', because I am being interviewed by

27 you people. Excuse the language there. But the

28 fact of the matter was that I didn't hear from them.

29 228 Q. Okay.

38
 1 A. I got a letter stating that because there was an

2 invasion into their offices by Revenue going back

3 over inumerable years that they were unable to help

4 me.

5 229 Q. I am sure you can well imagine that there may have

6 been one or two other people requesting information

7 from them and I think that what may be the case is

8 that sometimes one has to be a bit specific as to

9 what one wants, therefore directing them to look in

10 a particular place. So it may well be that you are

11 going to have be a bit more specific with them as to

12 what information you want?

13 A. What I wanted was all statements that they could

14 give me regarding my account or my affairs.

15 230 Q. Yes. It may be that if you ask them specifically

16 about investments that they will go to a different

17 part of their organisation and ask that department?

18 A. Yes, indeed, quite true, but I can tell you

19 specifically so far as I was concerned there was

20 only one other share way back in the 80's and that

21 was Cable & Wireless. The other two are Greencore,

22 as here, with Irish Life.

23 231 Q. Thank you. When Ms. Mackey was asking you about

24 your initial contact with Guinness & Mahon, you

25 indicated that you had observed from the Press that

26 they were in the business of offering attractive

27 rates and that was what caused you to make contact

28 with them in the first place. Early on in your

29 interview today, something of that sort you

39
 1 explained?

2 A. Yes .

3 232 Q. And that you made contact with a Mr. Martin Keane?

4 A. Correct.

5 233 Q. Looking back at the notes that I made of your answer

6 to Ms. Mackey, you said that you made your first

7 approach to Guinness & Mahon around 1972, possibly

8 1971?

9 A. May I claim that memory here is conjecture on my

10 part, but I do know that the train of thought

11 running through my mind was why on earth should

12 I have to take cash from Allied Irish Banks? As far

13 as I was concerned, the answer I was given was 'we

14 want to get rid of your funds and we don't want to

15 leave any trace or money trail. Take the money in a

16 case.' And that is what I did because it was told

17 to me that there is going to be total disclosure of

18 people having funds in the North of Ireland. So

19 that probably was the reason why I took the money in

20 the...

21 234 Q. Yes, I appreciate the general point you are making.

22 What I was trying to be a little clear about was

23 that the impression that I gained listening to your

24 answers was that you first made contact with

25 Guinness & Mahon in the early 70's?

26 A. I think so. There is a blank. But the document

27 that I did receive, that I did hold onto, was the

28 College Trustees whereby they had an instrument.

29 You know, I think it is from 1978.

 1 235 Q. Yes .

2 A. But as far as I was concerned, monies that

3 I probably was still gaining was in the hands of

4 AIF.

5 236 Q. Yes. I was going to say that you may recall the

6 document on page 47, (Exhibit 2) this document which

7 was headed up: "Memorandum of Addition."

8 A. Yes .

9 237 Q. Do you remember that?

10 A. That is right, yes, indeed.

11 238 Q. When we were asking you about that document (Exhibit

12 2) which you provided to us, the handwritten sum

13 £119,665.55, you indicated that that was the first

14 lodgement that you made to Guinness & Mahon and you

15 will see that that is dated 1978?

16 A. Yes, indeed. May I say that this is the first

17 document that I could prove to myself that I had

18 funds, that I gave them funds. I can't for the life

19 of me see... "Resolve to treat the same as an

20 addition to the settled funds of the trust".

21 239 Q. Yes, I think the point which I am sure you can

22 appreciate, is that you said in answer to the

23 general question when did you first make contact

24 with them, you said 1971/1972. This is 1978. There

25 is quite a span of years there.

26 A. I am not saying that my recollection is quite

27 precise and exact, that there was money lodged in

28 1971/1972.

29 240 Q. Would your personal diary have thrown some light on

 1 the thing? For instance, presumably you would have

2 written in your diary that you had an appointment

3 with Martin Keane on 24th January 1978. Do you

4 write appointment details in your diary?

5 A. I do now. I do now since... The company was

6 inaugurated in 1973 or 1974 but amongst a whole

7 plethora of...(INTERJECTION)

8 241 Q. This is your present company?

9 A. Yes. But I think myself the diaries I held from say

10 the 1970's would be a plethora of school children's

11 remarks, things I would have to do regarding

12 exercises and I don't believe I was ever writing my

13 diary as something which was important to me unless

14 regarding the 10,000 on August 2nd, that sticks out

15 like a sore thumb.

16 242 Q. Equally, of course, if you were going to deposit

17 £120,000 odd, that might have just found an entry in

18 your diary as well?

19 A. It certainly did because there is a rather amusing

20 story about the second time that I went up the North

21 and I had all the money stuck in a big bag and

22 unfortunately I was hungry and went into a hotel and

23 carrying a bag underneath a table in a hotel, it was

24 afterwards that I suddenly realised the significance

25 of such a stupid thing. But I can recall quite

26 vividly that day going up to Newry and depositing

27 the money in the Bank of Ireland up there.

28 243 Q. What I would like you to do for us, if you would,

29 Mr. Daly, I would like you to please look back in

42
 1 your diary and see if your diaries throw any light

2 on when you might first have made contact with

3 Guinness & Mahon. Was it in the early 70's or was

4 it in fact not until 1978? I would like to you do

5 that, if you would, please.

6 A. Certainly, yes.

7 244 Q. I would like you also to make contact with AIB and

8 see if they can look back in their banking records

9 to establish when in fact the transactions with

10 Allied Irish Finance stopped, whether in fact it was

11 in 1978 or earlier?

12 A. I certainly shall. May I take a note of these?

13 245 Q. Yes. Ms. Cummins will remind you about these things

14 that we have asked you to do at the end of this.

15 We may follow that up with a letter to you about

16 them.

17 A. Right.

18 246 Q. Mr. Daly, just turning to File C of your document

19 (Exhibit 1) that is the "lodgements and

20 withdrawals", at point (c) we have discussed the

21 Allied Irish Finance monies. Then you say the

22 second lodgement, large lodgement was one of

23 £128,234.96?

24 A. Yes .

25 247 Q. This was from the Bank of Ireland?

26 A. Correct.

27 248 Q. We haven't discussed that account. So you had a

28 second account in the Bank of Ireland?

29 A. No. The monies came from AIF in two bulks.

 1 The first one, I have told you, that I brought down

2 to Guinness & Mahon. The second one I brought

3 across the border. So the second one where it is

4 very specific because it gives the exact amount as

5 counted by Bank of Ireland and I think I did enclose

6 a document to that effect whereby when the monies

7 were being transferred to the Isle of Man -- I think

8 it is there.

9 MS. MACKEY: Yes, we have that.

10 24 9 Q. MR. ROWAN: So the second large

11 lodgement was also money

12 which started off in Allied Irish Finance?

13 A. Correct.

14 250 Q. And you took it to Newry, the Bank of Ireland, and

15 they transmitted it on?

16 A. Correct.

17 251 Q. That was on 8th February 1983, according to the Bank

18 of Ireland statement?

19 A. That is right, yes, that is correct.

20 252 Q. Thank you. On page 45, this is a letter from

21 College Trustees of 21st March 1984 (Exhibit 8)?

22 A. Yes.

23 253 Q. It refers to College Trustees account "TC431"

24 holding participating redeemable preference shares

25 of US 1 cent each in a company called Old Court

26 International Reserves Limited?

27 A. Yes.

28 254 Q. So that would have been another investment which was

29 made on your behalf?

44
 1 A. Correct.

2 255 Q. Was the decision to invest in Old Court

3 International Reserves Limited a decision of yours

4 or a decision of the trustees?

5 A. A decision of the trustees because I found that

6 initially the money was lying in a city account

7 earning nothing or a very small interest rate and I

8 had lost control of the money and I was quite

9 annoyed and very angry that they were actually

10 sitting on my monies and it wasn't working properly.

11 256 Q. Alright. So you asked them to do something about

12 it?

13 A. I did, yes.

14 257 Q. And they came back to you and said; 'Here is a

15 proposal.'?

16 A. They came back to me after I had made my particular

17 criticism of them and they said; 'Well, here it is.'

18 It wasn't in this letter form but I said; 'Listen, I

19 need it in a letter form.'

20 258 Q. Then they proposed to invest a further 425,750

21 Deutsch marks in those redeemable preference shares,

22 according to the third paragraph. I think that is

23 what that says, is it not?

24 A. Yes.

25 259 Q. So that they put quite a large sum of your money in

26 those shares?

27 A. It would appear so, not on an instruction from me.

28 260 Q. I think you said that from time to time they charged

29 you fees?

45
 1 A. Every year.

2 261 Q. Every year?

3 A. Yes. As far as I was concerned, if I may make a

4 statement, that Guinness & Mahon when I recollected

5 and when I just looked back on the whole thing, they

6 were able to prey on the fears of Irish investors by

7 getting the funding into Guernsey in order to allay

8 any Irish investor that these monies would be

9 declared for Irish income tax, they had this trust

10 and consequently they were able to build an enormous

11 trust, I do not know how many people were investing

12 with them or had monies with them, but at least it

13 was a sure-fire way of keeping the monies under one

14 roof. That is my little observation on it.

15 262 Q. Did you form any impression of the effectiveness of

16 their advice to you in terms of investments?

17 A. Their advice to me was very, very poor. I actually

18 at the time joined Century Investment Club here in

19 Dublin in a very legitimate manner and could see

20 what could be done with monies if properly invested.

21 But unfortunately, I couldn't bring it back. It was

22 over in Guernsey. It was badly housed and badly

23 managed so I was glad in a way that this whole thing

24 came to a complete stop and I could get rid of it

25 because I think I lost more money in a very

26 legitimate manner if I had it by having it over

27 there in the first place.

28 263 Q. I think just one concluding question, Mr. Daly.

29 I believe that somewhere in the papers it was

46
 1 suggested that you closed your account with Guinness

2 & Mahon at around the time that you were sorting out

3 matters with the Revenue Commissioners?

4 A. Correct.

5 264 Q. So that was around 1993/1994?

6 A. 1994 .

7 265 Q. So that you closed your account with College

8 Trustees then?

9 A. Totally.

10 266 Q. MS. MACKEY: Could you just tell us how

11 you did that, Mr. Daly?

12 Who did you contact about that?

13 A. I picked up the phone and I called Brian Ellis and I

14 said; 'I need as much assistance and all the

15 information you can give me. I am facing an

16 investigation', and they sent me the papers.

17 267 Q. What about the funds?

18 A. They sent me the cheque. Sorry, they had

19 transferred the funds at that time to AIB Jersey and

20 consequently AIB Jersey supplied instruments, very

21 legally technically stating the total amount. In

22 fact, you have it there.

23 268 Q. You but you say College Trustees transferred it to

24 AIB Jersey?

25 A. Even at that time, even before my encounter with the

26 investigation branch, they already had monies with

27 AIB Jersey.

28 269 Q. College Trustees had?

29 A. College had. They were moving around the monies.

 1 270 Q. So just to get it clear, when the account was closed

2 with college, was that closed before the

3 investigation started when your funds moved to AIB

4 or did College subsequently close down your entire

5 fund? Were there still some funds left in College?

6 A. None whatsoever.

7 271 Q. So when did you finish your contact with College

8 itself?

9 A. When I asked them to give me the total amount of

10 funding, which is reflected in the document I gave

11 you, and they placed these in front of -- well, my

12 accountants did, Deloitte & Touche.

13 272 Q. When did College return your funds to you?

14 A. Well, College never returned the funds to me. I am

15 trying to figure this out. The funds are with AIB.

16 273 Q. They still are?

17 A. No, no. The funds at that time, say in January

18 1994, when the amount of monies had to be lodged

19 with the Revenue, then half the funds were sent

20 because I was charged 50% of everything I owned and

21 as a result, the residue was 50%, but in my name in

22 AIB Jersey.

23 274 Q. So it had no contact at that stage with College

24 Trustees?

25 A. None whatsoever.

26 275 Q. How did it get into your name? When did that

27 happen?

28 A. I am sure I asked them.

29 276 Q. You asked College?

48
 1 A. Yes .

2 277 Q. But this is what I am trying to ascertain; when the

3 end of the account in College Trustees came about

4 and when that money went into your own name in a

5 different bank entirely?

6 A. As the politician said, that is a good question and

7 I would love to find the answer.

8 278 Q. Did you instruct College Trustees at any particular

9 point to close down the trust?

10 A. I did, yes, indeed.

11 279 Q. That is what I am trying to find out. When did that

12 happen?

13 A. I am sure it happened in January 1994.

14 280 Q. January 1994. You instructed Mr. Ellis?

15 A. Yes, indeed.

16 281 Q. To close your account?

17 A. Correct.

18 282 Q. And to do what with the funds?

19 A. First of all to send me a cheque. In fact, the

20 Revenue have a copy of this. But half the monies,

21 they were still in Jersey but in my name.

22 283 Q. But did you instruct them at that point to put them

23 in your name?

24 A. I am sure I did, I am sure I did. I said I wanted

25 no more to do or nothing further to do with College

26 Trustees. The reason why they were left in AIB in

27 Jersey was the fact that -- here was a very

28 traumatic time for me personally.

29 284 Q. I understand.
 1 A. Consequently, as long as Revenue got their hands on

2 the cheques, they were happy. Then one of the

3 accountants in AIB said; 'If you leave your money

4 over there, you are going to be charged 48% DIRT but

5 if you bring your money back here to us in the

6 Carpet Mill Centre, then you are only going to be

7 charged DIRT at the normal rate.'

8 285 Q. Can I just summarise this and you tell me if I am

9 incorrect in what I understand now, that at a point

10 in January 1994 you instructed College Trustees,

11 Mr. Ellis, to close your account with them, to close

12 down the trust?

13 A. Yes.

14 286 Q. And to send you a cheque of 50% of that, which you

15 wished to pay to the Revenue Commissioners?

16 A. Yes, correct.

17 287 Q. And that with the other 50%, they were to put it

18 into an account in your name in AIB in Jersey, is

19 that it?

20 A. I am endeavouring to try and figure out how. I am

21 quite certain that prior to this chaotic situation

22 occurring, I knew all my monies were with AIB in

23 Jersey but still under...(INTERJECTION)

24 288 Q. In the name of College?

25 A. Under the name of College.

26 289 Q. Yes, I understand that. Now it is when that

27 stopped.

28 A. Whether I did it by phone, whether I instructed AIB

29 Jersey that this is not College money, it is my

50
 1 money and I have paid my dues to the State and I

2 have given them 50% and the rest of it is in my

3 name. Now I may not be exactly precise in what I

4 am saying but it is a very good thing and I would

5 like to even examine myself as to precisely.

6 290 Q. Do you think you may have any documents in relation

7 to that? Would you have any letter you may have

8 written either to AIB Jersey or to Guinness and

9 Mahon or to College at that time that may clarify

10 this for you, or that they may have copies?

11 A. I will certainly endeavour to do that.

12 291 Q. Will you look into that so that we might clarify

13 what instructions you gave?

14 A. Yes.

15 292 Q. Thank you, Mr. Daly. Would it have been the case,

16 do you think, that they would have accepted

17 instructions by telephone? How would they have

18 identified it was you and so on?

19 A. May I go home and ponder and think this out?

20 293 Q. You may certainly, yes, and if you can locate any

21 documents.

22 A. Because I will tell you one thing, whatever age I

23 was at that stage, I wanted to wash my hands of

24 everything. I have been cleansed. And I never

25 enjoyed the money, never even -- for such an amount

26 of money never to have.. Not that I am making a

27 point on that.

28 294 Q. Perhaps if you can clarify it in your own mind,

29 perhaps you would write it down for us and send us

51
 1 in what you recollect about the matter when you have

2 recollected it and if you can locate any documents,

3 whether you may have copies yourself or whether you

4 think College Trustees could furnish you with a copy

5 of something?

6 A. I am sure College Trustees, there is something

7 coming back in my mind, would have stated in a very

8 legalistic form of words that the entire amount of

9 money which they held on my behalf was X, Y or Z

10 amount and that the 50% of that was whatever that

11 was and that the balance -- it is an interesting

12 area. I am sorry I cannot help you.

13 295 Q. If you can clarify it for us, Mr. Daly?

14 A. Yes.

15 296 Q. Especially if you can get any documents that would

16 clarify it, that would be great. Thank you very

17 much.

18 A. Surely, yes.

19 MR. ROWAN: Mr. Daly, thank you very

20 much. I think that

21 concludes our interview today. The interview will

22 be transcribed and Ms. Cummins will be in touch with

23 you about coming into sign the transcript in due

24 course.

25 A. Yes. May I inform you of my movements in the coming

26 months?

27 MS. MACKEY: You can inform Ms. Cummins

28 at the end, that will be

29 fine, because she will be dealing with you so you

52
can sort all that out with her

Thank you very much.

THE INTERVIEW THEN CONCLUDED

»+- T u j u . ^ o o o
0
Appendix XV (148) (1)
 FILEC

LODGEMENTS AND WITHDRAWLS

Without die atqpport of all bank atalementolfindftin^^letorecaHe

exact dates. I ironed Brian Ellis of College Trustees Ltd, on April 28* asking hirfi for
the documentation on my file TC431 which was closed 7 years ago He sent me a fkx to
day whichl enclose. AaIha\«aUthcd<}aniinntatioaberelra3edto me in 1993for my
tax settlement 1 enclose those bank statements showing all funds on a rollover basis.
AO I can do is my reasonabk best to amwa: tlx questions you pose on pages 16 and 17
with the data r have ia File CL
(a) Martin Keane of Guinness Mahon Dublin transferred a scm in the region of
£120.000 to Guinness Mahon Guaxsney which I broughttobis bank in a suitcase in
cashfrom Allied Irish Finance (North of Ireland) circa December 1977

(b) Seemingly this money was taken over by College Trustees as of January24* 1978
by John Lipscombe then at Guinness M ^ n Guernsey and director of the Trust

(c) There were 1 very large lodgements, the one stated above as £120,000 and a second
one of £128,234.96. This second sum was brought in cashfa a suitcasetothe
Newry Branch of the Bank of Ireland on February 1983 and transferred to the
Bank of Ireland in the Isle of Man and later to Guinness Mahon Guernsey. I
enclose the BOI statement.
(d) My statement refers to thefeet that I withdrew £10,000.cashfiom Guinness
Mahon Dublin on the ^ of August 1990 A Mr Murray or Mr. Farrelly of Guinness
Mahon Dublinfacilitated me in this regard j.
• The Investxnex±Dqpartinent of Guinness Mahon Dublin bought 1000 shares
in Greencore and 5000 shares in Irish Life on my behalf I enclose those 2
documents.
SUMMARY of Enclosures on File C
In November/ December ofl9931 receivedfrom Mr. SJB.Woodward of College Trustees
a statementfromGuinness Mahon Guernsey which shows the transfers of all funds from
them to AJ.B. Bank (CJ.) Jersey

Should I receivefiirther documentationfrom archive storage in Guernsey as promised in

the enclosed fax I shall bring them to your attention immediately.
Appendix XV (148) (1) (c)
 MEMORANDUM OF ADDITION '

Onfaffa^***"**^-19/K .the itust^es accepted the •

. following property and reaolved to treat the same as •
an addition to .the settled funds of -the
Trusts- *U>*<»-6LJS*it'

For ColjMge Trustees LiimLted

• ' 1/ » *
• V
• #

• •m e m o r a n d u m op addition

'tin 19 •, the Trustees accepted the

following property and resolved to treat the same as
an addition to the settled funds of like'
'Trust:- .

For College Xrustees plaited

MEMORANDUM OF ADDITION
• 1.
• • • » * •

On ' 19 " 9 tho Trustees accented the .

following property and resolved, to .treat the earne rs
an. -addition to 'the. settled* funds of the '•
.Trust:-- - • 1 • '

•For College Trustees Limited

Appendix XV (148) (1) (d)
 P

l^rfareenMackeyBJL,
Office of the Inspectors,
Trident House,
Blackcock.
Co. Dublin

'May 2^2000
8
.V'

xjS^^Y^kar,

•^Pt _
*t. gtafe tijat I <rtn»n endeavour to provide every assistance with your investigation.

a s an introductiontotba data you seek I wish to statetibatas a result of a letter fiom Mr.
H. G. Oliver, an Inspector with the Investigation Branch of the Office of Chief Inspector
' of Taxes I availed of Section 3 of the Tax Amnesty Scheme of1993 byremittingall
arrears of taxes in full, due from the tax year 1958/1959 to 1990/1991.

Tte Incentive Amnesty Section 2 did not apply to me as a resufc of having been written to
by the Investigation Branch as of Sqatember 18th 1992 .
l am a bachelor aged 73 and aretired teacher. I waa always fhnynrinlly independent as a
result of my teacher's salary irrespective of the moneys held in trustfor me by College
Trustees Ltd located in Guernsey. As the deposits were o» a roll over basis l never
enjoyed incomefrom them except where stated on File C ( marked Guinness'Mahon/
College Trustees TC431) which is enclosed with this statement
•
In order to acquaint you astohow I came into fin^ with Guinness Mtfion I sketch a
short resume of my career.' I qualified as a teacher in 1947. From 1950 through 1958
as a young teacher I participated in tours of Europe during my Summer holidays
attending student workcamps with groiqps of International students in Switzerland,
Germany, France, Italy and the UK which enabled zse later to network worldwide.
In 19571 obtained a Summer job with an American Airline, Flying Tigers at Heathrow
Airport and gamed valuable experience in operating transatlantic charters to the.United
States. My task was to organise hundreds of Hungarian Refugees in charter flights
from Europe to the USA.

In 1958/591 started operating charters'from Ireland to the USA and successfully

continued to do so as a one man operation until 1974.
 Page 2

By this 19751 had chartered over 60 trmwnttonrir? airliners which waa the source of the
moneys with Guinness Mahon/College Trustees LtcLeamed by enormous hard work and
voy long hours.

The moneysfrom my transatlantic operation! profits to the United States were placed on
deposit with Guinness Mahon on a roll o w basis and were only used byme as stated on
the document in File C marked" witbdrawls" on specified dales as per my diary.

In 1977/78 an official of GuinwSas Mahon bank, MrMartinKeane told me of an

intending split between T,<-&h pounds and Sterling. He transferred the dqjosit to
Guinness Mikon Gue^:

Sincelwasr^^'inCKiernseyllaterw^
Guinnwr^cujh6n. I wastoldto contact a Mi& John lipscombe. He told me that my
fbro^v^ acquired by College I was
^j^urprised and annoyed to learn this fact as I had given no authorisatfon &r my iunds to be
^ p l a c e d anywhere or given to anyone except the bank of Guinness Mahon in Guernsey.

. I wastoklthai this was m my own interest as the mo

I was askedtofiU out a letter of wishes It was dated October 26* 1981.
My number was TC431

As I
never
gpt any correspondencefrom College Trustees LtdJflerw to Guernsey in
1984 and demanded a statement I learned tbatnayfimds had been placed withNJM
Rothchild & Sons ( CJ.) and were under professional management
Ifettuncoinfortable witfr this arrangement as I had no control over myfluids and so
demanded that John Lipscombe put the amount placed with Rothchild onrecordand in
writing which he did and signed it on March 21* 1984. • I later learned that when Mr
lipscombe retired that he was replaced by a Mr Brian E11&
He used to phone me once a year to tell me the yearlyfees of College and the amount of
my deposit which were on arollover basis..
On learning ofthefectthatl was under the scrutiny of the Investigation Branch as of
September 18th 19921 contacted a tax specialist in Debitte Touche. I was told to
procure all documentsfrom College Trustees Ltd.fa so &r as it was humanly possible.
Mr Pat Kenny of Deloitte Touche negotiated a tax settlement with the office of the Chief
Inspector of Taxes. His office repaired all my tax returns. File B contains this data.
On receipt ofyour letter on Friday April 14th. I immediately contacted Guinness Mahon
Dublin and College Trustees Ltd., Guernsey seeking additional documentation.
 Page 3 .

Attfae timeof writing this letter to you I have not obtained aqy farther doaTTTvmftrtTon
from either source. I severed aD dealings with them 7 years ago when I closed all
accounts and secured the documentsfer my tax settlement which I nowfijnxish to you in
FfleC.

I phoned your Office this rooming to obtain a direction as to whether or not I should send
the documentation containing stated amounts of moneys. I was informed I should send
afldoomientatkjntoyouwithtimstatemeiit

Files marked A and B contain letters concerning the Settlement of my Tax Affairs with

File C contains documents reIatfer><oCoIIege Trustees Ltd and Guinness Mahon and
relevant toyour investferffc^T

May I state categp^j^fyttmt I never heard ofthe word "Ansbacher" until recent Press
releases.
I n^^j^koew of its significance nor what it stood for.
I never knew of the existence of a John Rnae or 'where he came ftom.

I have given to you the names of the relevant people who represented Guinness Mahon/
College Trustees who conducted -to affairs to enable me wrongfully to evade the paymnet
ofthe taxes that I was legally bound to pay prior to 1991. I paid all my taxes infiill on
January 14* 1994 as shown on thefiles at a rate of 50% of all moneys held on deposit

I am now a compliant taxpayerand have beenfor J years. I hjive made amendsfor my

previous transgression which took place 7 years ago I would like attest all my statements
to be true..

I am, naturally, concerned about any possible threat toriyprivacy and confidentiality
which this investigation may pose through leakageas threatened on the front page of
todays Irish Independent. I had presumed that my compliance with the Investigation
Branch ofthe Chief Inspector of taxes was an end to this mutter. I now feel very
vunerable with this new investigation.

Unfortunately as I am under medical care due to an infected broken hip caused by a fell
and subsequent hip operation gone wrong please give me ample notice to attend in
person so as to arrange a suitable appointment to swear on oath that what I state is true.

Yours faithfully,

TiftLj
Appendix XV (148) (1) (e)
 I • •I
a o o f
a * ji h
n <• <• n
Appendix XV (148) (1) (f)
 OOSHKBM KMBM OWHJUI TOOT / COfJiW
c/o ooxMcra M u m cunour nam
» O BOX 1 1 7
OSJUJD C U M
BRITISH M j v r miXMB
h CALL D/X

UUCS . BrtWMW brought forward

2S jut •• muraoti bx
ooxmnM MUBH csmw TRUST / "VIMT

M */cnui
*** Copy ftataaant

0.00
1.7»,«iO.S« *1,727,4C0.S4
Appendix XV (148) (1) (g)
ACCOUNT NAME ypN.TRACT DATE 15 July 1991,
Ri^ERENCE NO 19910716341
STEPHEN DALY ESQ., ACCOUNT NO 09404000
CAPITAL SETTLirMENT DATE 15 JULY 1991

WE CONFIRM WE HAVE PURCHASED FOR YOU :

ACCOUNT DESCRIPTION PRICE CONSIDERATION

• .•
5000.00 IRISH LIFE 1.600 8000.00

. COMMISSION 25.00
1
ffaTALlRP 8025.00

-H t •», *

STEPHEN DALY ESQ.

29 RATHCAR ROAD EAST
RATHCAR
DUBLIN 6
For and an bahaif of
QUINNESS &MAHON LTD.

Guinntft & Uihon Lid. hcarportitd in Intend

R»l^ta/mlOII^:17CoBa0»Bntii,DuUnZflial'ttmdnaiii^i1O28Z
Telaphom: 6796944 Tslsx 83667 (QemnQ 30437 (Ferex)'
Appendix XV (148) (1) (h)
 n
t"

College Trustees Limited

BRB/CDS/TC 431

STRICTLY PRIVATE * CONFIDENTIAL

S. Daly Esq.,
29 Terenure Road East,
Dublin. 6
Ireland. 21st March 1984

Dear Mr. Daly,

We, College Trustees Limited, a member of the Guinness Peat
Group Pla hereby declare that we are holding at this date in
the registered name "College Trustees Limited Account TC 431"
Participating Redeemable Preference Shares of U.S. 1 cent each
in Old Court International Reserves Limited as follows:
Fund Class No. of shares Value in Deutschemarks
: as at 27th February -1984
Deutschemarks 7,715.372 401,546.54
Trench Francs 6,869.862 385,310.48
Japanese Yen -11,428.947 834,960.60
Total value as at 27th February 1A84DnlySaif817.G2

He farther declare that: the

the amount
amount of
of approximately
approximately Dm.425,750-
Dm.4
which is about to be transferred to N.M.JRothschild a Sons (C.I.)
Limited for our account will be utilised In its entirety to
purchase further Participating Redeemable preference' Shares -in
Old Court International Reserves Limited and that such further
shares will also be registered in the name of College' Trustees
Limited Account TC 431.
We hereby confirm that all and any assets' now registered or which
at any time in the future may be registered in the name of College
Trustees Limited Account TC 431 will be held in respect of the
trust known to you and that we as trustees of that trust are in
possession of a letter from you dated 26th October 1981 which ;
provides us with guidance as to the disposition of the capital
and income of the said trust.
icerely,

- •r \ /
J.G. Lipscombe
Director
Appendix XV (148) (1) (i)
 College Trustees Limited
Our Ref: BRE/KEH/CSMATS

5* May, 2000

STRICTLY PRIVATE A CONFIDENTIAL

TO BE OPENED BY ADDRESSEE ONLY

S Daly Esq
FTP Travel United
29 Terenure Road East
Dublin 6
IRELAND

Dear Mr Daly
Irefer toyourtetterof 18* Aprl, 2000, in which you request information and documents in
respect of what you refer toas "deposits of moneys that you had wtth this Company*.
Firstly, I should explain that this Company has never been a deposit accepting institution.
The Company's principal activity was that of acting as a Trustee and any funds addedtoa Trust
were crecfited toan account with a properly Icensed bank. Those accounts were all dearly
identified.
I have pteasu re in enclosing copies of the accounts of The Elinor Trust for the period ended 31"
December, 1991, andfor the year ended 31* December, 1992.
The Trust Fund was dstributed in early 1994 and so no accounts were prepared after those of
1992.
Inresponseto paragraph 3 of yourtetter,I can Inform you that the first transfer of funds Into
the Trusttookplace on 24* January, 1978.
I hope that the accounts and the Information In thistetterare sufficient for your purposes and
those of the Inspectors but, if you do need any more information please do not hesitate to
contact me.
Kind regards.
Yours sincerely
for COLLEGE TRUSTEES LIMITED

/USUa

8 R Ellis Enc
P. O. Box 223, Les Echelons, St Peter Port, Guernsey, Channel Islands, OY13NT,
Telephone: 01481 726641 Tetex: 4191532 O Fta: 01481 726218
Appendix XV (148) (2) (a)
 KENNEDY MCGONAGLE BALLAGH
Incorporating Bell Branigan O'Donnell & O'Brien

S () L I ( I 1 <) K S

20 NORTHUMBERLAND R O A D D U B L I N 4
I L L 660 ' ) 7 W I - A X 660 9434
EMAIL: inloK/ knib.ic
vwvw.knih.ie
) X 75
ler 7
Office of the Inspector Appointed by Orcler Your ref: C/D01/F07/T01
ofthe High Court to Ansbacher (Cayman) Limited Our ref: MO'S/DF
3 r d Floor
Trident House
Blackrock
Co Dublin

14 November 2001

Re: Stephen Daly ("SD")

Dear Sirs,

Thank you for the opportunity to influence your preliminary conclusion concerning
Mr. Stephen Daly

In your preliminary conslusions dated 18th July 2001 you find that Stephen Daly (SD)
was a client of Ansbacher. It is our submission that it would be inappropriate to
consider SD an Ansbacher client for the reasons outlined below.

The inspectors concluded that SD was the beneficial owner of the Elinor Trust, which
contained funds in account reference TC341 and which were deposited in the
Ansbacher account.

"Mr Daly enjoyed the use of funds on deposit by means of a service provided by
Ansbacher whereby he was able to withdraw funds in Ireland and was therefore a
client of Ansbacher."

The Elinor Trust was a trust set up by Guinness Mahon (Guernsey) with monies
transferred from Dublin to Guernsey. The money was transferred on the advice of Mr
Michael Keane of Guinness Mahon in Dublin, who advised SD that with the
impending split between the Irish and sterling pounds, he would be better off to hold
the money offshore. At this stage there was no mention of setting up a trust. There is
some debate as to when the account with Guinness Mahon was opened, but it is clear
that at least three years after the account was opened, SD was informed that his funds
had been acquired by
College Trustees Ltd and that a trust had been set up to deal with the funds. This had
not been authorised by him, and it is clear that theinvestor had intended merely for a
deposit account to be set up - this was emphasised in the interview.

Mit'ii m:i, .i. o ' s i i i a r o u ' . r p. u \i i. \iiii n Ri-xn: i;. d i x o n r t v i n c. h a r r y c o r d o n ,h ix;i;

a s s i s t a n t s : i i o n a iii.nry a o a t i i a u. i a y i o k
coNsri.TANis: i a i k t . n c t k uk \ n i u \ n m a r i i n a i . o ' c o r m \n
commissioners t o r o a t h s / m v i a r h s ivbtic

*•„,.• Member ol'lhe Association o f Independent European Lawyers.

In 1984 he found out that his funds had been placed with NM Rothschild & Sons
(C.I.) and were under professional management. The client then demanded that the
amount in Rothschild be placed on record and in writing. Thereafter the only
correspondence the client had with College Trustees Ltd was an annual telephone call
to discuss the Trustees fees and the amount of the deposit to be rolled over.

A couple of withdrawals from the account were made, the first was to facilitate the
purchase of shares, the second was a withdrawal of £10,000 in notes. Both
transactions were arranged by Guinness Mahon (Dublin).

As proof of the fact that SD was a client Ansbacher, the inspector produced a
statement which showed that Deutschmarks held under the identification number of
SD had been deposited in an account held in Dublin in the name of Guiness Mahon
Cayman Trust, a former name of Ansbacher. The inspector accepted however, that
this may have been done without the clients knowledge (See page 31 of the interview
transcript).

SD was under investigation by the Tax Office in 1992 and availed of the Tax
Amnesty. Once a settlement had been negotiated in 1994 SD closed all accounts he
held with the Trustees and has not had any further, dealings with them.

Given the circumstances, it appears inappropriate to classify SD as a client of

Ansbacher with all the connotations such a finding would have on both his personal
and professional lives. The document "Definition of a Client" produced by you is not
any justification to call SD a client of Ansbacher.

Your report can contain fact and opinions but not misstatement of fact. While SD
approached Guinness Mahon with a view to setting up a deposit account and was
advised to place the funds in Guernsey and did so. While a trust was set up to deal
with these funds, this was done without SD's knowledge and the only regular
correspondence he had with College Trustees was an annual telephone conversation
to discuss their fees.

It now appears (through your investigations, while some of SD's funds were placed in
the Ansbacher account, these funds were effectively not under his control and the
Inspectors have already accepted that this transfer may have been done without his
knowledge. In the circumstances it is not reasonable to consider SD a client of
Ansbacher. We urge you to reconsider your preliminary conclusion of the 18th July.
It is neither factually correct
nor fair to SD.
What does the ordinary English usage of the term "client" mean? In the context of a
relationship between a party and a professional person where that person is using the
services of the professional person the term "client" is clearly understood. It can also
mean " customer". Given the facts the statement that SD was a client of Ansbacher
does violence to the concept "client". Undoubtedly SD had money which he put into
the hands of third parties to manage. In fact in the course of management certain of
the funds may or may not have been placed in an Ansbacher account by a third party
does not justify the description "a client of Ansbacher". As the concept of being an
"Ansbacher account-holder" or a client of "Ansbacher", in the speak of the
investigation is an allegation which is seriously damaging to those against whom it is
levied. The current preliminary conclusion is unjustified and damaging to SD.

Might we suggest that if it is necessary to refer to SD at all in your report ( and why
he should be named in any public way at all is unclear, he can be identified as a
"party" who employed the services of Guinness Mahon. That part of his monies
lodged to Guinness Mahon were, for a limited period, deposited, unknown to him, in
an Ansbacher account.

Yours faithfully,

Kennedy McGoriagle Ballagh

Appendix XV (149) Mr William Forwood & Mrs Joyce
Forwood
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
William Forwood & Mrs Joyce Forwood.

a) Transcript of evidence of Mr William Forwood dated 17 July 2001.

b) Letter of 24 October 2000 - Mr William Forwood to Inspectors.

c) Extract from GMCT re College sundry sub-account at Guinness and

Mahon of 20 January 1987.

d) Letter of 17 May 1991 from Ansbacher Limited to IIB.

e) Extract from Report of the Central Bank of Ireland on Guinness and

Mahon as at 31 December 1985.

f) Internal Guinness and Mahon memo re York Securities Limited.

Appendix XV (149) (1) (a)
PRIVATE EXAMINATION OF MR. WILLIAM FORWOOD

UNDER OATH

ON TUESDAY, 17TH JULY 2001

I hereby certify the

following to be a true and

accurate transcript of my

shorthand notes in the

above named interview.

Stenographer
 PRESENT

The Inspectors: MR. P. ROWAN

MS. MACKEY BL

Solicitor to the Inspectors: MS. M. CUMMINS

Interviewee: MR. FORWOOD

 I N D E X

WITNESS EXAMINATION PAGE

MR. FORWOOD MR. ROWAN 5-38

MS. MACKEY 39 - 71

MR. ROWAN 72 - 76
 1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,

2 17TH JULY 2001:

5 MR. ROWAN: Formally, Mr. Forwood,

6 good morning to you and

7 thank you for coming today. May I introduce

8 myself: I am Paul Rowan. I am one of the

9 Inspectors. On my right is Ms. Noreen Mackey.

10 MR. Forwood: Yes.

11 MR. ROWAN: And Ms. Mary Cummins, our

12 solicitor.

13 MR. Forwood: Yes.

14 MR. ROWAN: I just want to say that

15 this is not a Court and

16 it is not a Tribunal. It is an interview.

17 MR. Forwood: Yes.

18 MR. ROWAN: However, we do have some

19 formalities in that we

20 take it under oath and we also keep a record of

21 the interview. So, without further ado perhaps,

22 Ms. Cummins, you would invite Mr. Forwood to take

23 the oath.

24

25

26

27

28

29

4
 1 MR. WILLIAM FORWOOD, HAVING BEEN SWORN, WAS EXAMINED

2 AS FOLLOWS BY MR. ROWAN:

5 1 Q. MR. ROWAN: We are going to divide the

6 interview into two main

7 parts. The first part is that we would like to

8 have some of the background which you have about

9 your time in Guinness & Mahon and whatever

10 involvement you had with Guinness Mahon Cayman

11 Trust?

12 A. Yes.

13 2 Q. Which of course is now known as "Ansbacher" Cayman

14 Limited?

15 A. Yes.

16 3 Q. Then the second part of the interview will be to

17 take up some specific matters with you?

18 A. Yes.

19 4 Q. And Ms. Mackey will undertake that part of the

20 interview?

21 A. Yes.

22 5 Q. You very kindly provided us over the months with

23 some information and I am particularly thinking,

24 Mr. Forwood, of your letter of the 24th October

25 and the copy of the statement which you provided

26 to us which you had already sent previously to the

27 Authorised Officer; Mr. Ryan (Exhibit 1)?

28 A. Yes.

29 6 Q. You told us that you qualified as a solicitor in

5
 1 London?

2 A. Yes .

3 7 Q. In 1954?

4 A. Yes .

5 8 Q. And thereafter became a partner in a London law

6 firm?

7 A. Yes .

8 9 Q. Did you have a specialisation as a solicitor?

9 A. Yes, essentially commercial.

10 10 Q. Yes?

11 A. But most particularly in the field of occupational

12 pension schemes.

13 11 Q. I see?

14 A. I should be so boring.

15 12 Q. Okay?

16 A. But that is —

17 13 Q. Then you said that you were asked

18 by Mr. John Guinness to join Guinness & Mahon?

19 A. Yes .

20 14 Q. How did you know John Guinness?

21 A. It is was actually through my work as a solicitor.

22 I acted for a small company in which I was

23 particularly interested called Transworld

24 Helicopters Limited and one of the Directors of

25 Transworld Helicopters went to Ireland with a view

26 to setting up a facility for training pilots and the

27 like at Shannon Airport. During the course of

28 this he became acquainted with John Guinness and

29 the Bank provided funds I think and as a result

 1 I met John Guinness and I think he was favourably

2 impressed by what he saw. I at the time was

3 suffering desperately from overwork and when he made

4 this entirely unexpected suggestion to me I rather

5 jumped at it.

6 15 Q. Okay. What did he suggest to you?

7 A. That I should join the Bank and that after six

8 months, well, I went over for two months I think and

9 I worked as an assistant cashier, that kind of

10 thing, and then I went back to London and I spent

11 six months in Guinness Mahon & Co, which was the

12 London Bank.

13 16 Q. Did you...(INTERJECTION)?

14 A. And also the parent Bank.

15 17 Q. Yes. When Mr. Guinness put the proposition to you

16 did you know that you were going to join the Bank

17 and after a period of aclimatisation?

18 A. Yes.

19 18 Q. You were going to take a senior management position?

20 A. Yes.

21 19 Q. You did?

22 A. Yes.

23 20 Q. Right. He felt that you would bring your commercial

24 law experience to the Bank?

25 A. Yes.

26 21 Q. Is that what he was looking for?

27 A. I think more than that. It was a very old fashioned

28 and very small affair. The Directors sat together

29 in what was known as the Partners Room.

7
 1 22 Q. We will come to that?

2 A. Yes.

3 23 Q. However, essentially you were bringing your

4 commercial law experience and your wider experience

5 to Ireland to the Bank?

6 A. Yes.

7 24 Q. Okay. You spent a period with Guinness Mahon &

8 Company in London?

9 A. Yes.

10 25 Q. What did you do during that period of six months

11 or so?

12 A. Again, it was learning, or intended to be a

13 learning, phase. I went to the various departments

14 in the Bank. I was also taken on visits to money

15 brokers probably. I can't even remember what they

16 were called now.

17 26 Q. Did you get involved in any commercial transactions

18 in that six months?

19 A. I don't think so.

20 27 Q. All right?

21 A. In fact it is quite likely that I sat in on, you

22 know, work which somebody else was doing.

23 28 Q. Quite likely?

24 A. Yes.

25 29 Q. So that in 1968 you moved to Ireland?

26 A. Yes.

27 30 Q. And you were appointed as Co-Managing Director with

28 Sir George Mahon and Mr. John Guinness?

29 A. Yes.

8
 1 31 Q. How did you divide out the responsibilities?

2 A. In no very formal fashion. We all sat in the same

3 room. We discussed approaches made to us to borrow

4 funds; that kind of thing. Obviously, I was no

5 banker. So, I tended to concentrate on corporate

6 advice; that kind of thing.

7 32 Q. Legal agreements?

8 A. Not so much. Takeovers and mergers; that kind of

9 thing.

10 33 Q. Right. When did the question of creating some

11 entity in the Cayman Islands first start to be

12 talked about?

13 A. I can't be exact but 1972 would be my best guess.

14 34 Q. I might be able to give you a little bit of help?

15 A. Yes.

16 35 Q. Page 95, Mary (Same Handed). These are the Minutes

17 of the conclave (Exhibit 2)?

18 A. Yes.

19 36 Q. I think they are referred to as?

20 A. Yes.

21 37 Q. And you will be familiar with those because you can

22 see under Minute 150 at the top your initials are

23 beside it?

24 A. Yes.

25 38 Q. If you go down to Minute 166 entitled "Cayman

26 Islands"?

27 A. Yes.

28 39 Q. You will see what it says there:

29 "M & G have set up a unit trust in the

Cayman Islands"?

9
 1 A. Yes.
40 Q.
2 "Agreed that we should investigate the
possibility of forming a company or a
3 trust there or in some other haven"?

5 A. Yes.

6 41 Q. Does that ring a bell?

7 A. I can very well imagine that that is how it

8 happened.

9 42 Q. You can see the date on the top of these Minutes?

10 A. 1969.

11 43 Q. 17th January 1969?

12 A. Yes.

13 44 Q. What actually was done about that, Mr. Forwood?

14 I mean it seems that Mr. Guinness's initials are

15 beside that?

16 A. Yes.

17 45 Q. Was he involved in pushing that idea forward?

18 A. Yes, I think he probably was. I can give you a

19 little bit of background to that if you are

20 interested?

21 46 Q. Yes. I was going to show you page 96, which is

22 probably of a little bit more help (Exhibit 3)?

23 A. Yes.

24 47 Q. And the third Minute down, Number 166/2?

25 A. Yes.

26 48 Q. Entitled "Cayman Islands"?

27 A. Yes.

28 49 Q.

29 "McGonagle has been instructed to

arrange for the incorporation of seven

10
 1 companies of which four will be tax
exempt companies. It is proposed that
2 we shall employ the Bank of Nova Scotia
Trust Company as Trustees; Barclays
3 DC&O as Bankers and WS. Walker as
Solicitors"?
4

5 A. Yes .

6 50 Q. That was putting much more organisation into it?

7 A. Yes .

8 51 Q. So, would you like to add now what you were going

9 to say a moment ago?

10 A. The interest in the Cayman Islands.

11 52 Q. Yes?

12 A. John Guinness was very much a sailing man and it is

13 my recollection that he went on a sailing holiday

14 in the Cayman Islands. While he was there he was

15 offered land. Anyway there was land available

16 which was thought to be ripe for development. When

17 he came back he discussed this with his cousin James

18 Guinness and it was decided to form a little company

19 to buy some land with a view to development.

20 53 Q. All right. May I just ask you to stop there

21 because we will come to that just in a moment?

22 A. Sorry.

23 54 Q. What is the reference in this Minute (Exhibit 3)

24 (indicating) to:

25 "McGonagle has been instructed to

arrange for the incorporation of seven
26 companies"?

27 A. Well, my guess is that McGonagle was a man called

28 Liam McGonagle.

29 55 Q. Yes?
 1 A. Who was a solicitor in Dublin.

2 56 Q. How had he come into the discussion about Cayman?

3 A. He was one of the solicitors whom the Bank used to

4 consult.

5 57 Q. What was the purpose of incorporating seven

6 companies?

7 A. I don't know nor can I remember at this stage what

8 a tax exempt company is.

9 58 Q. Okay. Let us turn to page 97, (Same Handed)?

10 This is a Minute, 294, entitled "Bank of Nova Scotia

11 Trust Co. (Cayman) Ltd," and it is a Minute of

12 June 1969?

13 A. Yes.

14 59 Q. It says:

15 "John Collins, Manager, has called to

see GEJM and JHG in connection with
16 the companies being set up for us.
L. McGonagle who was present at the
17 meeting is satisfied with the proposals
whereby an operation can be
18 "unscrambled" without any action having
to be taken in the Cayman Islands."
19

20

21 Who is the reference to "John Collins" here?

22 A. It was the Bank of Nova Scotia; wasn't it?

23 MS. MACKEY: Yes.

24 A. Nova Scotia Trust Company.

25 60 Q. MR. ROWAN: So, Mr. Collins was the

26 Manager of the Bank of

27 Nova Scotia; is that right?

28 A. Yes, there were two Managers I think.

29 61 Q. Yes. The other one?

12
 1 A. One was called John Furze.

2 62 Q. Yes. So, he was the person with whom

3 Guinness & Mahon dealt with in the Bank of

4 Nova Scotia or they were the people?

5 A. Evidently.

6 63 Q. Yes?

7 A. Yes, I am sure that is so.

8 64 Q. All right. So, carrying on from that: That

9 relationship developed I assume?

10 A. Yes.

11 65 Q. If we go to page 107, (Exhibit 5) (Same Handed) —

12 Mr. Forwood, just before we read that page could I

13 ask you what is meant by unscrambling in the

14 previous Minute? Do you know what that means?

15 A. No, I don't.

16 66 Q. Presumably, though it means to undo something that

17 has been done?

18 A. I am afraid I am completely mystified by that

19 (Exhibit 4) (indicating).

20 67 Q. The ordinary use of words might imply that?

21 A. Let me just read this again? I am afraid I don't

22 understand that.

23 68 Q. I see. Then going on to page 107, at the bottom,

24 and Minute 372 of October 1969?

25 A. Yes.

26 69 Q. Entitled:

27

28 "Collins of Nova Scotia Trust Company

has..."
29

13
 1 You need the other page, (Same Handed)

2 "...put up to us a proposition
involving a loan to purchase 150 acres
3 in the Cayman Island for $200,000.
We are offered 9% on the loan and a
4 minimum of 25% of the equity. It has
been agree that JR shall fly out to
5 investigate this project at once."

D
So, this was Mr. Collins putting the proposition
7
about the land?
8
9 A. Well, that is certainly what it looks like.

10 70 Q. So, the introduction to that opportunity came from

11 effectively the Bank of Nova Scotia?

12 A. So it appears from this (Exhibit 5) (indicating).

13 71 Q. Right. Who is JR?

14 A. There was a fellow called John Roberts who was with

15 the Bank for a short time and that is my best guess.

16 72 Q. Okay. Did the land deal get the go ahead? Did the

17 Bank decide to go ahead with this deal?

18 A. I can't say that it was that deal (Exhibit 5)

19 (indicating) but there was a deal. The Bank was not

20 involved in it. It was a little consortium of I

21 think Directors in London and Directors in Dublin.

22 73 Q. This was referred to in your letter (Exhibit 1).

23 You say:

24 "As a result a syndicate of investors

based in London purchased land..."?
25

26 A. Yes .

27 74 Q. Okay. You say those were -- that syndicate involved

28 Directors of Guinness & Mahon in Dublin and Guinness

29 & Mahon in London?

 1 A. Yes. I don't know whether there were other people

2 involved.

3 75 Q. I see.

4 A. I myself had a small participation.

5 76 Q. You had a participation?

6 A. Of 1% or something.

7 77 Q. Yes. Was it a successful venture?

8 A. No, not really.

9 78 Q. I mean did it make money?

10 A. No.

11 79 Q. It did not?

12 A. I think there are still some properties there.

13 80 Q. I see, right. So that in any event you say in your

14 statement (Exhibit 1):

15 "In or about 1970 Mr. J. Desmond

Traynor FCA, up to then a partner in
16 the accountancy firm of Haughey Boland
joined the Bank as a Co-Managing
17 Director with John Guinness and
myself"?
18

19 A. Yes .

20 81 Q. Can you recall, Mr. Forwood, how it came that the

21 Bank recruited someone from an accountancy firm and

22 more particularly Mr. Traynor specifically?

23 A. Yes. We were conscious, when I say "we" I mean

24 George Mahon and John Guinness and I, that we all

25 came from the same background. We were all educated

26 in the same school. We were all Protestants. None

27 of us really had, we thought, sufficient connection

28 with the wider world and we were very anxious to

29 expand and we were very much tarred with the

 1 Protestant brush let's face it; our clients, our

2 employees. We wanted to change this and we decided

3 that there was room for another. We debated this

4 for a long time and we had come across, all of us

5 had come across, Mr. Traynor. I can't remember how

6 but we had.

7 82 Q. Would he have been involved with the Bank on behalf

8 of Haughey Boland clients?

9 A. He could have been. He could have been.

10 83 Q. Because if you did not...(INTERJECTION)?

11 A. But in any event we all knew him for business

12 reasons.

13 84 Q. Right?

14 A. So, I suppose that's very likely.

15 85 Q. Yes?

16 A. We, the three of us talking together, wrote out a

17 specification, a kind of thing we were looking for,

18 and somebody said this could be Traynor and we

19 approached him. He had recently had a very serious

20 heart attack and I can remember him saying, "Give me

21 until tomorrow to decide whether to tell my wife.

22 If I tell my wife I shall accept because she will

23 make me." Anyway he did tell his wife and he joined

24 us and this probably tells us when; doesn't it

25 (indicating) (Exhibit 1)? I would have put it

26 about 1970 but it may have been earlier for all I

27 know.

28 MS. MACKEY: It was the end of 1969.

29 A. The end of 1969?

16
 1 MS. MACKEY: Yes.

2 8 6 Q. MR. ROWAN: You obviously thought that

3 Mr. Traynor had the

4 necessary skills, ability and importantly contacts?

5 A. Yes.

6 87 Q. In the wider circle?

7 A. Yes.

8 88 Q. In Ireland?

9 A. Yes.

10 8 9 Q. You invited him to join and you made him a

11 Co-Managing Director with Mr. Guinness and yourself?

12 A. Yes.

13 90 Q. What happened to the responsibilities when

14 Mr. Traynor came? Did that change things?

15 A. Well, evidently, yes, but arrangements continued

16 between the four of us.

17 91 Q. You were continuing to use the Partners Room?

18 A. Yes.

19 92 Q. And there were how many of you using the room then;

20 three?

21 A. Four.

22 93 Q. Four.

23 A. Well, I think four.

24 94 Q. By today's way of doing things that is a strange

25 arrangement?

26 A. Yes.

27 95 Q. I mean there would have been four telephones and

28 potentially four conversations going on?

29 A. Yes.

17
 1 96 Q. How did that work in practical terms?

2 A. Well, I have to tell you that the world has changed.

3 I mean the concept of a Merchant Bank I fancy has

4 really gone. They were fairly old fashioned.

5 97 Q. What does that mean? Can you explain to me what old

6 fashioned means?

7 A. I will try.

8 98 Q. As you understand it?

9 A. Well, for example the Partners: We weren't Partners

10 but it was still called the Partners Room. The

11 Partners used to sit in one room. I mean I was a

12 Director of quite an important public company in

13 the United Kingdom, in Britain, and they were book

14 sellers/stationers etc. etc., and they had been a

15 partnership and the Directors of the public company

16 sat in one large room at different desks.

17 99 Q. In a similar way?

18 A. Yes .

19 100 Q. To Guinness & Mahon?

20 A. Yes .

21 101 Q. I see?

22 A. This is why I say life has changed. It wasn't

23 unusual then.

24 102 Q. Right. Anyway when Mr. Traynor came on board he

25 seemed to become involved in the Cayman situation

26 quite quickly?

27 A. I think so.

28 103 Q. Okay. Am I right in believing that Guinness & Mahon

29 in any event historically had had discretionary

18
 1 trust arrangements in the Channel Islands and there

2 would have been a number of wealthy families for

3 whom the Bank would have operated historically?

4 A. It could well be there was a Channel Islands one.

5 When it happened: I don't know. Whether it

6 happened before or after the Cayman Islands:

7 I can't remember. It was very likely before.

8 104 Q. Yes. May we have page 117, please, (Same Handed)?

9 (Exhibit 6) the second Minute, 166/7?

10 A. Yes.

11 105 Q. Of June 1970?

12 A. Yes.

13 106 Q.
Mr. Traynor "reported on his meeting
14 in London. It was noted that it
was now decided to go ahead with
15 the incorporation of Guinness Mahon
Bahamas Trust Ltd. J.D.T. indicated
16 that as a result of the London meeting
if the decision was finally reached to
17 proceed with the incorporation of a
Bank in the Cayman the name to be used
18 would be G.M. Cayman Trust Ltd and it
would then also be decided to have the
19 share capital of both the Bahamas Trust
Company and Cayman Trust Company owned
20 by a new holding company in Cayman
etc."?
21

22 A. Yes.

23 107 Q. So, this seems to have been a decision that

24 following some discussion with Guinness Mahon

25 in London it was decided to create Guinness Mahon

26 Cayman Trust?

27 A. Evidently, yes.

28 108 Q. In June 1970?

29 A. Yes.

19
 1 109 Q. So that was where, as far as we can see, Guinness

2 Mahon Cayman Trust started off?

3 A. Yes.

4 110 Q. Page 118, please (Same Handed) (Exhibit 7)? That is

5 a similar Minute of a different body so we can pass

6 by that. It is exactly the same wording?

7 A. Right.

8 111 Q. Page 119 (Same Handed); Minute 166/7 of the

9 16th July 1970:

10 "Mr. Traynor produces a memorandum on

the proposal to incorporate Guinness
11 Mahon Cayman Trust Ltd as a holding
company for our various investments in
12 Cayman. Agreed that the establishment
of this company is desirable..."
13

14 And that Mr. Traynor will pursue the matter with

15 someone referred to as HMS?

16 A. Yes.

17 112 Q. So, that was the go ahead?

18 A. He was a London Director I think.

19 113 Q. I see, right, okay. Do you know his name?

20 A. Well, if I am right it would be. His name would be

21 Hugh Sassoon.

22 114 Q. I see, Okay?

23 A. A well known banking name.

24 115 Q. Yes. Turning to page 125, (Same Handed). This is

25 a Minute I think of 1971 and at 667/2?

26 A. Yes.

27 116 Q.

28 "The executive council...",

29 which I take it to be in the Cayman Islands?

20
 1 A. Presumably.

2 117 Q.

3 "...have approved in principle the

application for a banking licence.
4 The Company has now been incorporated
and we had subscribed in full for the
5 issued share capital of Jamaican
Dollars $20,000 which sum for the
6 present has been deposited with us."

8 So, GMCT had been incorporated and had had approved

9 its banking licence and it was ready to go?

10 A. Yes .

11 118 Q. Turning back to your letter you say (Exhibit 1):

12 "Probably in connection with this

transaction..."
13

14 Which was the land deal we talked about earlier,

15 "...two young men who had been working

for another bank in the Cayman Islands
16 became aware of the existence of the
Bank"?
17

18 A. Yes .

19 119 Q. And subsequently...(INTERJECTION)?

20 A. If I could just interrupt for a second?

21 120 Q. Yes?

22 A. It's evident from what you have shown me that

23 the sequence of events was not exactly as I had

24 remembered it.

25 121 Q. Yes. However, in any event Messrs. Collins and

26 Furze were acting on behalf of the Bank of Nova

27 Scotia in transactions in which Guinness & Mahon

28 was involved?

29 A. So it appears from these notes (indicating).

 1 122 Q. Yes. You go on to say:

2 "Subsequently they approached the Bank

and said they would like to establish
3 a new bank in which they would have a
shareholding"?
4

5 A. I evidently got that wrong because it appears from

6 here (indicating) (Exhibit 9) that the Cayman Island

7 Bank was in existence before they approached.

8 123 Q. Yes. I think that is correct from the chronology

9 of the thing?

10 A. Yes, yes.

11 124 Q. However, in any event a contact was made. Someone

12 made a suggestion to someone about them leaving the

13 Bank of Nova Scotia and joining GMCT?

14 A. I am fairly certain that the initiative came from

15 them.

16 125 Q. They said we could be of help to you?

17 A. Yes .

18 126 Q. Who then became involved in determining whether they

19 should join GMCT? Whose responsibility was that?

20 A. I suppose it was a joint responsibility. I mean it

21 was a Board decision.

22 127 Q. Right. However, did someone have carriage of the

23 implementation of it?

24 A. That I simply do not know. I know what part I

25 played because I did the lawyer's job at that stage.

26 128 Q. Yes. You say that it was considered that they had

27 useful connections and would be able to attract

28 deposits from overseas, particularly from the

29 United States of America?

 1 A. Yes .

2 129 Q. And then you go on to say:

3 "As an ex-lawyer I played a part

in drawing up a "participation
4 agreement"..."

5 Under which each of the two would own you think 20%

6 of the issued share capital and the Bank would own

7 the balance?

8 A. Yes .

9 130 Q. So that Mr. Collins would have 20% and Mr. Furze

10 would have 20%?

11 A. Yes .

12 131 Q. And the remaining 60% would be held by Guinness

13 & Mahon?

14 A. I think so.

15 132 Q. Right. What did that participation agreement

16 contain? What terms did it have in it as far as

17 you can recall, Mr. Forwood?

18 A. I really don't recall. The object of the exercise

19 was: These two young men had left the Bank of Nova

20 Scotia and were going to play an important part in

21 the development of the bank in Cayman and it would

22 be as well to tie them in.

23 133 Q. How senior were they in the Bank of Nova Scotia?

24 A. Well, I think they were running the Bank of Nova

25 Scotia's Cayman Islands operation.

26 134 Q. Trust?

27 A. Subsidiary or whatever it was.

28 135 Q. Yes?

29 A. So, fairly senior.

 1 136 Q. So the idea was to tie them in?

2 A. Yes.

3 137 Q. By giving them a shareholding?

4 A. Yes, and a fairly generous shareholding at that.

5 138 Q. And they were appointed as directors?

6 A. Presumably.

7 139 Q. Would there have been any clauses in the agreement

8 to prevent them leaving?

9 A. Very likely but I don't remember. I mean I think

10 it would have been difficult to enforce if there

11 were.

12 140 Q. Yes?

13 A. The idea was to give them sufficient inducement

14 to stay.

15 141 Q. So, they became involved?

16 A. Yes.

17 142 Q. I have not got much information as to when that was;

18 do you? Can you remember? I mean in the light of

19 our conversation?

20 A. I would have thought...

21 143 Q. Yes?

22 A. My guess is that -- that one is not dated (Exhibit

23 9) (indicating). Pretty early on I think.

24 144 Q. Right?

25 A. Early on.

26 145 Q. Because presumably someone had to run the Bank once

27 it was set up?

28 A. Yes.

29 146 Q. And, you know, one had to recruit people presumably

24
 1 in the Cayman Islands to run it so it follows I

2 suppose that they would have been recruited quite

3 soon after its incorporation?

4 A. I guess so. I mean I think once the licence was

5 obtained and there is a reference here to the

6 Executive council (Exhibit 9) (indicating).

7 147 Q. Right?

8 A. I think they probably pricked up their ears and said

9 "There is an opportunity for us here." So, my guess

10 is that it was fairly early on.

11 148 Q. Did Mr. Traynor play a part in the implementation of

12 this or did you play a part?

13 A. No.

14 149 Q. Or Mr. Guinness?

15 A. Perhaps but the major part would have certainly been

16 Mr. Traynor who rather took over this aspect.

17 150 Q. Yes. So, once Guinness Mahon Cayman Trust had been

18 set up what services did it offer?

19 A. There is a lot of guess-work here because I can't

20 remember. I didn't play an active role. I think it

21 took deposits from expatriate Americans who might be

22 based anywhere and I think it was a conventional

23 banking business. They lent their funds.

24 151 Q. Did it take deposits from Ireland?

25 A. I don't know. It is possible but I don't know.

26 152 Q. Okay. Can we turn to page...(INTERJECTION)?

27 A. Because shortly -- sorry to interrupt.

28 153 Q. Yes?

29 A. Shortly after that Exchange Control Regulations

 1 were introduced into Ireland so that I rather doubt

2 whether Irish funds could have been transferred to

3 the Cayman Islands; I think.

4 154 Q. Yes?

5 A. I don't know if anybody knows when these Regulations

6 were introduced.

7 155 Q. However, if funds had already been outside of

8 Ireland of course they might have been transferred

9 there?

10 A. That would have been permissible I would have

11 thought.

12 156 Q. They might have been beneficially owned by someone

13 in Ireland?

14 A. They could well be.

15 157 Q. However, already outside Ireland?

16 A. Yes .

17 158 Q. Page 129, please (Same Handed) (Exhibit 10)?

18 A. Thanks.

19 159 Q. Minute 667/5. The date of these Minutes are not

20 clear but it is Mr. Traynor;

21 "Agreed that any differential on back

to back arrangements involving
22 ourselves and Cayman will in normal
circumstances be split equally."
23

24 What does that tell us, Mr. Forwood?

25 A. Now to me a back to back arrangement is one where

26 there is a borrowing and there is a lending. So,

27 the suggestion is that there could be presumably

28 lending from the Cayman and borrowing in Dublin.

29 That is what it suggests to me.

26
 1 160 Q. So that someone in Ireland might take a loan

2 presumably from Guinness & Mahon?

3 A. Presumably because it does say any differential in

4 normal circumstances will be split equally.

5 161 Q. Yes?

6 A. So, that is what it suggests.

7 162 Q. Yes. Then the back to back arrangement would

8 involve a deposit?

9 A. Well, that seems so.

10 163 Q. In Cayman?

11 A. That is what it seems to suggest.

12 164 Q. Yes .

13 MS. MACKEY: Do you know what it means,

14 Mr. Forwood?

15 A. Sorry?

16 MS. MACKEY: Do you know what it means,

17 Mr. Forwood?

18 A. Well, I am guessing.

19 MS. MACKEY: However, what we want to

20 get from you is evidence.

21 So, if you actually do not know, you should say so.

22 A. Well, I am afraid there is going to be a lot of

23 "don't knows".

24 MS. MACKEY: Yes.

25 A. During the course of this interview.

26 MS. MACKEY: If that is the case you

27 should just simply say so.

28 A. Because it's a long time ago.

29 MS. MACKEY: Yes.

 1 A. And I wasn't directly involved.

2 MS. MACKEY: Yes.

3 A. And I may well have been a director of the Cayman

4 Island Company but I certainly never attended a

5 Board meeting. I never went to the Cayman Islands

6 and I think I only met Collins and Furze about once

7 each.

8 165 Q. MR. ROWAN: However, I believe I am

9 correct in saying that you

10 are trained as a commercial lawyer?

11 A. Sorry?

12 166 Q. You are trained as a commercial lawyer?

13 A. Yes .

14 167 Q. And that you were with Guinness & Mahon for seven

15 years approximately?

16 A. Yes .

17 168 Q. And that subsequently you tell us you set up as a

18 financial consultant?

19 A. Yes .

20 169 Q. I imagine that would have, all of that would have,

21 given you an opportunity to understand about back to

22 back arrangements?

23 A. Yes .

24 170 Q. I mean Ms. Mackey was asking you: Did you

25 understand what a back to back arrangement was.

26 MS. MACKEY: No, no. No, I was not.

27 Sorry, Mr. Rowan. What I

28 was asking is: Whether Mr. Forwood knew what was

29 meant by the specific thing and in other words did

28
 1 he recollect this discussion. What I was asking

2 you, Mr. Forwood, was whether you knew what was

3 being spoken about in this particular minute; namely

4 the split in the differential and whether you

5 recollected the circumstances?

6 A. Well, I think I must have known.

7 MS. MACKEY: Yes. Whether you

8 recollect it now really is

9 what I want to know?

10 A. No, I don't recollect it.

11 MS. MACKEY: Yes.

12 171 Q. MR. ROWAN: What I was trying to

13 establish was that you

14 understood even if you do not recollect the

15 particular discussion but you understand what

16 this minute is saying (Exhibit 10)?

17 A. I have given you my interpretation of it.

18 172 Q. What is the reference to "any differential"?

19 A. Well, presumably the interest rate charged on the

20 loan would have been higher than the interest rate

21 allowed on the deposit.

22 173 Q. Yes?

23 A. So, there would be a differential.

24 174 Q. Right?

25 A. I mean that is my interpretation.

26 175 Q. All right. The Cayman Islands and Guinness Mahon

27 Cayman Trust was involved in arrangements involving

28 back to back lending?

29 A. Well, that is what this suggests (Exhibit 10)

 2 176 Q. Okay. So, that is one of the services?

3 A. Yes.

4 177 Q. Page 131 (Same Handed). This is Minute 667/8 of

5 February 1972 (Exhibit 11)?

6 A. Yes.

7 178 Q. And it is the bottom of the minute?

8 A. Yes.

9 179 Q. Where Mr. Traynor is reporting that he has had a

10 series of meetings with John Furze and Kennedy

11 Crowley.

12 "There have been a number of enquiries

about setting up Discretionary
13 Settlements."

14

15 Can you recall anything about that minute (Exhibit

16 11)?

17 A. No.

18 180 Q. Can you express some views as to what the meaning

19 of it is?

20 A. I don't know whether I can really. I can't

21 elaborate on what is said there (indicating)

22 (Exhibit 11).

23 181 Q. Who is Kennedy Crowley?

24 A. They are a firm of chartered accountants.

25 182 Q. I see, right?

26 A. I presume they still are; aren't they?

27 183 Q. Yes. It says there have been a number of enquiries

28 about setting up discretionary settlements. That

29 was in 1972?

30
 1 A. Yes .

2 184 Q. Was that when the prospect of providing

3 Discretionary Settlements or Discretionary Trusts

4 started to become important to Guinness & Mahon and

5 Guinness Mahon Cayman Trust?

6 A. I don't know. If I saw this at the time, which I

7 guess I did, it was 28 years ago. I have no idea.

8 185 Q. However, you are familiar with the topic of a

9 discretionary trusts; are you not?

10 A. Yes .

11 186 Q. Yes. So, this seems to suggest, does it not,

12 that Guinness Mahon Cayman Trust were also

13 involved in the idea of promoting discretionary

14 trusts ?

15 A. So it suggests.

16 187 Q. In 1972?

17 A. Yes .

18 188 Q. Right. Page 13 (Same Handed) (Exhibit 1). Going

19 back to your statement, to the Authorised Officer,

20 at point number five at the bottom of page 2 of

21 that?

22 A. Yes .

23 189 Q. You say:

24 "In or about 1973 Maurice O'Kelly was

invited to join the Bank and in effect
25 became a fourth Co-Managing Director."

26 190 Q. What was the reason for that appointment?

27 A. He was a friend of Mr. Traynor. He had practised

28 as a Chartered Accountant. I think he may have

29 been articled to Haughey Boland; I can't remember.

31
 1 He practised as a Chartered Accountant in

2 Hong Kong and again I think this was the time

3 when George Mahon was insisting on retiring and

4 again we thought there was room for a vacancy and

5 this I do remember; that there was a very strong

6 recommendation from Mr. Traynor to take him on.

7 191 Q. What did Mr. 0'Kelly bring to the Bank?

8 A. He was a Chartered Accountant.

9 192 Q. Was he a Banker?

10 A. No.

11 193 Q. Yes?

12 A. We were very short on bankers.

13 194 Q. Did he bring with him a business of some sort?

14 A. No.

15 195 Q. Okay. When he arrived: Did that change

16 responsibilities ?

17 A. To an extent inevitably but we never had five in the

18 room but we had four.

19 196 Q. After Mr. 0'Kelly settled in did any one become

20 slightly more dominant than the others?

21 A. Well, John Guinness was the Chairman. Although my

22 experience was short it was longer than that of the

23 others but I suppose I have to confess looking back

24 on it that Mr. Traynor was very a very dominant

25 personality.

26 197 Q. How did that show itself?

27 A. He was rather inclined to do his own thing perhaps

28 with less consultation than others of us would have

29 thought desirable. You know that this is not

32
 2 is so.

3 198 Q. At around that time in the 1970's I believe

4 it is correct in saying that Mr. Traynor was

5 a Co-Managing Director and he also, I believe,

6 may have been the Chairman of Cayman at that time?

7 A. I guess he probably was.

8 199 Q. Yes?

9 A. That was certainly in his province.

10 200 Q. Yes. Did any one feel that that was quite a

11 lot of power vesting in one individual?

12 A. No, I don't think so.

13 201 Q. Right. You then say:

14 "In 1976 I decided to discontinue my

employment with the Bank and resigned
15 as a Director."

16 What prompted you to leave?

17 A. I would say there were two principal reasons.

18 The first: We had succeeded in expanding our

19 business and I think the work we did was recognised

20 as quality work particularly, I would like to think,

21 in my own field. The clearing banks, the Bank

22 of Ireland and Allied Irish Banks, both set up

23 subsidiaries as Merchant Banks. We discovered that

24 they had enormous power to direct their banking

25 clients to their Merchant Banking subsidiaries and

26 I came to the conclusion that we must cut back and

27 that either Des Traynor or I ought to withdraw.

28 Now, that is number one.

29 202 Q. Yes?

33
 2 had been a so-called merger in London between

3 Guinness Mahon, the Bank, and a company called Lewis

4 & Peat. I remember the name well. Lewis & Peat

5 were commodity brokers I think. The boss man

6 was a fellow called Kissin, K-i-s-s-i-n, who came

7 originally from Danzig. I didn't like him and have

8 no reason to suppose he liked me either. What

9 particularly offended me was a very strong rumour

10 that he was about to be ennobled by Harold Wilson,

11 who was at that time Prime Minister in England,

12 for a reason which I would have regarded as

13 discreditable and I was happy that I should go

14 and Des should stay.

15 203 Q. In any event you decided to withdraw?

16 A. To withdraw.

17 204 Q. And you say that (Exhibit 1):

18 "Thereafter, the only contact I had

19 with the Bank was as a tenant from 1976

20 to 1978 of a small office in a separate

21 building near the Bank's College Green

22 premises from which I carried on a

23 practice as a Financial and Legal

24 Consultant."

25

26 So, you had no contact with Guinness & Mahon

27 after that time?

28 A. No.

29 205 Q. None?

34
 2 206 Q. You make a statement?

3 A. Yes.

4 207 Q. And I just wondered whether that statement is

5 comprehensive?

6 A. Yes.

7 208 Q. It is?

8 A. I think so.

9 209 Q. Did you ever?

10 A. Unless I have misunderstood what you are saying.

11 210 Q. I mean were you ever invited to act as a

12 non-executive Director for instance on any of

13 the equity adventures which Guinness & Mahon

14 were involved in?

15 A. No, no.

16 211 Q. Did you ever get asked for advice by any one in

17 Guinness & Mahon; particularly Mr. Traynor?

18 A. I think markedly not. I thought I might have

19 been but I wasn't.

20 212 Q. Right. So that after you left, as I understand it,

21 there was a change in the management structure.

22 Are you aware of that? Mr. Traynor became the

23 Deputy Chairman and Managing Director?

24 A. I might have been aware of it at the time.

25 213 Q. Yes?

26 A. Incidentally I left out one small thing.

27 214 Q. Yes?

28 A. In reply to your previous question as to why I

29 left the Bank.

35
 2 A. I had been offered another job which sounded a very

3 attractive one and for a strange reason this fell

4 through and that is why I set myself up as a

5 Financial and Legal Consultant; whatever that may

6 mean. I didn't really know.

7 216 Q. Okay?

8 A. I waited for people to come to me.

9 217 Q. Okay. Finally, from my end of things: Did you

10 come across a man called Jack Stakelum?

11 A. Yes.

12 218 Q. Were you aware of his relationship with Mr. Traynor,

13 Guinness & Mahon and Cayman?

14 A. No. Well, I can remember that he was a partner

15 in Haughey Boland and I think was very close to

16 Mr. Traynor. I was not aware that he had any

17 connection with the Cayman company nor indeed would

18 I have been aware that he had any connection with

19 Guinness & Mahon.

20 219 Q. I see. Okay. Thank you very much. Ms. Mackey

21 will take over some of the questions.

22

23 END OF EXAMINATION OF MR. Forwood BY MR. ROWAN:

24

25

26

27

28

29

36
 1 MR. FORWOOD WAS EXAMINED AS FOLLOWS BY MS. MACKEY:

4 220 Q. MS. MACKEY: Mr. Forwood, as you know,

5 as I think we explained to

6 you, we are investigating "Ansbacher" Cayman and one

7 of the things that we have been asked by the High

8 Court to do?

9 A. Yes.

10 221 Q. Is to identify the clients of "Ansbacher" Cayman?

11 A. Yes.

12 222 Q. And it is really in that general area that I wanted

13 to ask you some questions. Can you hear me all

14 right?

15 A. Well.

16 223 Q. I can sit up nearer to you if it is any better?

17 A. I am going to try what I call my Irish hearing aid

18 and I am going to try -- it sounds terribly sexist

19 but...(INTERJECTION).

20 224 Q. A woman's voice is lighter?

21 A. It is known as high tone deafness which means I am

22 much better on men than I am on women.

23 225 Q. Would it be better if I sat nearer?

24 A. Actually it is not working too badly.

25 226 Q. Is it?

26 A. Yes.

27 227 Q. Good. Had you heard what I said there a few moments

28 ago?

29 A. Yes.

37
 1 228 Q. That we are to identify the clients?

2 A. I think so.

3 229 Q. So, it is in that connection that I now want to ask

4 you some questions.

5 A. Yes .

6 230 Q. During the time that you were in Guinness & Mahon

7 was the phrase suitably secured in the use that it

8 subsequently became? Were you familiar with the

9 phrase suitably secured as applied to a loan?

10 A. I never heard the phrase until somebody wrote to me

11 recently.

12 231 Q. I see. The evidence we have been given on oath by

13 the current management of Guinness & Mahon?

14 A. Yes .

15 232 Q. On behalf of them?

16 A. Yes .

17 233 Q. Is that that phrase was used to describe a loan that

18 was secured by a deposit with an off-shore

19 subsidiary of Guinness & Mahon. That could be an

20 off-shore subsidiary?

21 A. Yes .

22 234 Q. However, when they did not wish the fact of the real

23 security to appear on the documents they used the

24 phrase suitably secured normally in inverted commas?

25 A. Yes .

26 235 Q. Can I ask you to look at page 33, please (Same

27 Handed) (Exhibit 12). Just the first page actually

28 of it. This is an internal Guinness & Mahon

29 document in relation to a loan which, or two --

 2 received in or around 1978 I think; from the dates

3 within. If you look at the very final one "Number

4 two special account"? You see that at the bottom?

5 A. Yes.

6 236 Q. You see a loan and a figure and then in brackets

7 or in inverted commas the phrase suitably secured?

8 A. Yes.

9 237 Q. On the face of it, and according to the

10 evidence given by Guinness & Mahon to us, that

11 would indicate that that was secured on a deposit

12 that you or somebody belonging to you had with an

13 off-shore subsidiary with Guinness & Mahon. Our

14 only concern and the only reason we are asking you

15 about it at all is to see whether that deposit was

16 with "Ansbacher" Cayman or if it was with the

17 subsidiary in the Channel Islands because there was

18 subsequently at a later date a link between deposits

19 in the Channel Islands and deposits in Cayman. So,

20 I have to ask you: Did you in fact have a deposit

21 with "Ansbacher" Cayman or a trust?

22 A. No, is my answer to that.

23 238 Q. No?

24 A. No.

25 239 Q. No. Did you then have a deposit or a trust in the

26 Channel Islands managed by College Trustees because

27 there will be a link?

28 A. Can you tell me: College Trustees...(INTERJECTION).

29 240 Q. Yes?

39
 1 A. The name is familiar and I thought that it was the

2 trustee company we had in Dublin.

3 241 Q. No?

4 A. That was so named after College Green but it was in

5 the Channel Islands.

6 242 Q. It was in the Channel Islands. Actually,

7 Mr. Forwood, I will just explain to you why I would

8 even ask you about a Channel Islands situation?

9 A. Yes .

10 243 Q. What we have learned is that Irish residents

11 deposited money or formed trusts in the Channel

12 Islands ?

13 A. Yes .

14 244 Q. Which was perfectly legitimate at the time?

15 A. Yes .

16 245 Q. And College Trustees was the manager of the

17 Guinness & Mahon subsidiaries out there and of the

18 trust Companies. They managed the trust funds?

19 A. Yes .

20 246 Q. And up to about 1981 they deposited those trust

21 funds normally in banks in the Channel Islands?

22 A. Yes .

23 247 Q. However, between 1981 and 1989 it appears that

24 College Trustees often unknown to its own clients

25 deposited their funds, the Irish funds, with

26 "Ansbacher" Cayman?

27 A. Right.

28 248 Q. As a result of which many people who were really

29 Channel Islands Clients if you like became

40
 2 A. Yes.

3 249 Q. Often unknown to themselves?

4 A. Well, I mean that I didn't know but I had a trust.

5 250 Q. Yes?

6 A. In the Channel Islands.

7 251 Q. Yes?

8 A. I thought the trustee was called Guinness Mahon

9 Guernsey Trust.

10 252 Q. That would be right, yes. College...(INTERJECTION)?

11 A. Did it change its name?

12 253 Q. No, it did not. However, College Trustees

13 effectively managed the funds for Guinness Mahon

14 Guernsey Trust?

15 A. Yes. What I would like to do is take a couple of

16 minutes to tell you about this Jersey Trust.

17 254 Q. Certainly, yes?

18 A. I will be as brief as I can. My father-in-law died

19 in January 1961 and left his Estate on very loose

20 Discretionary Trusts but the intention evidently

21 was that the beneficiaries should be his three

22 children.

23 255 Q. Yes?

24 A. My wife, her sister and her brother.

25 256 Q. Yes?

26 A. After payment of Estate Duty there wasn't a lot

27 left except for a farm in Buckinghamshire.

28 257 Q. Yes?

29 A. In or about 1969 or 1970 my wife was approached by

41
 1 her brother and her sister and indeed her mother

2 who was still alive.

3 258 Q. Yes?

4 A. And a proposition was put involving the payment

5 out of, well, it wasn't payment because it wasn't

6 money but the appointment out of this asset, in fact

7 my wife and myself for some reason, on condition

8 that we should then immediately reappoint or

9 re-settle on various Jersey Trusts for the benefit

10 of the three of them. I demurred and I still have

11 a copy I think of a letter which I then wrote

12 giving nine good reasons why this should not happen

13 but at the end of the day for the sake of family

14 relationships we agreed and this was done and my

15 wife --

16 259 Q. Yes?

17 A. There was a company called Armagh Holdings Limited.

18 260 Q. Yes?

19 A. And it issued shares and my wife had a third of

20 these shares.

21 261 Q. Yes?

22 A. And they were settled on a Channel Islands trust

23 and the trustees would have been Guinness Mahon

24 Jersey and I readily believe it became College

25 Trustees. Now, that asset was valuable but produced

26 negligible income.

27 262 Q. Yes?

28 A. And I have an idea that I may well have myself

29 at that time added other assets; in particular

42
 1 undivided shares in another farm in Buckinghamshire

2 which produced negligible income.

3 263 Q. Yes.

4 A. And that so remained until we came over here.

5 264 Q. Yes?

6 A. Which was in 1993.

7 265 Q. Yes. So, is the trust still in existence or was

8 it wound up in 1993?

9 A. It was wound up.

10 266 Q. Yes?

11 A. I mean this has been a source of much family trouble

12 and grief.

13 267 Q. Yes. I do not want to make you relive any of that?

14 A. But I think the whole thing is going to be solved

15 quite soon.

16 268 Q. Right. Really.

17 A. After 40 years.

18 269 Q. My heavens. Thank you for that explanation. Really

19 what I am anxious to ascertain is: Do you think now

20 looking at the documents (Exhibit 12) that I just

21 gave you that the reference to "suitably secured"

22 there is to the money that you had in fact at the

23 time in the Channel Islands?

24 A. No.

25 270 Q. You do not?

26 A. I don't.

27 271 Q. Then what do you think it might refer to?

28 A. Well, just jumping ahead for a second.

29 272 Q. Yes?

43
 2 Securities.

3 273 Q. Yes, I was going to come to that?

4 A. I know you are.

5 274 Q. Right?

6 A. But I have actually written, you know, having

7 been reminded what York Securities was, I

8 was completely barking up the wrong tree on

9 that one.

10 275 Q. Fine. Yes?

11 A. I have written a little note which I shall read

12 you in due course.

13 276 Q. Fine?

14 A. In which I give my theory as to what that means

15 (indicating).

16 277 Q. Perhaps, you would like to do that now and we can

17 get on to York Securities?

18 A. Can I?

19 278 Q. Yes, that would be fine?

20 A. I just wonder all the same whether this is going

21 to throw out your line of questioning.

22 279 Q. It will not?

23 A. Because there is quite a bit of this.

24 280 Q. It will not, Mr. Forwood, because I actually wanted,

25 all I wanted to know at that point, was whether you

26 had a Cayman trust that was backing your own loan.

27 You tell me you had not?

28 A. No.

29 281 Q. You explained about the Channel Islands ones and you

44
 1 now think that your explanation for York Securities

2 may explain the "suitably secured" here reference

3 (Exhibit 12) (indicating)?

4 A. Yes .

5 282 Q. So, if it fits in fine?

6 A. Yes. So, shall I.

7 283 Q. Please, yes?

8 A. Again, I think I must go back. When I came to

9 Ireland I saw advertised a house which I fell in

10 love with. It was a big rather dilapidated house

11 with 260 acres of land.

12 284 Q. Yes?

13 A. And I agreed to buy it and then discovered that

14 the Land Commission had, as they were then entitled

15 to do, said they wanted it. I went to see the Land

16 Commission and said, "Do you really want this

17 dilapidated house," and they said, "No," and I said,

18 "If I take the house how much land will you allow me

19 to keep," and eventually it came down to 100 acres

20 which was largely rough woodland.

21 285 Q. Yes?

22 A. I had to buy the whole thing and then sell them for

23 £150 an acre 150 acres. It was always my ambition

24 to recover what I had been deprived of because it

25 made a delightful whole. The Land Commission was

26 supposed to distribute this land among local farmers

27 who hadn't got enough land for a viable holding but

28 they didn't. When they were disbanded they sold the

29 land to the Wicklow County Council and they didn't

 1 distribute it either.

2 286 Q. Yes?

3 A. At a certain stage, which could have been 1974,

4 150 acres which was just over the wall came up for

5 sale and I thought if I could acquire this I could

6 then go to Land Commission, I think by this stage

7 it was the Wicklow County Council, and offer them

8 a swap because the land I was hoping to acquire was

9 better land.

10 287 Q. Right?

11 A. Now, before the auction a fellow came to see the

12 Bank looking for a loan and he explained that

13 he wanted to bid for this land which was very

14 embarrassing for me because had I simply turned him

15 down he would have said or might have said, I am

16 sure he would have said, that it was because I was

17 trying to eliminate a competitor.

18 288 Q. Yes?

19 A. So, I said I would see him and I said, "Why do you

20 want this land," and he said he had reason to

21 suppose that he could get planning permission on

22 a corner of it to build little houses. So, I said,

23 "All right then. Why don't we bid together? You

24 want 15 acres and I shall have the rest".

25 289 Q. Yes?

26 A. "And you pay a tenth of the price".

27 290 Q. Yes?

28 A. That is what happened.

29 291 Q. Yes. Who was this gentleman?

 2 292 Q. Yes?

3 A. Of whom I hadn't previously heard, you see?

4 293 Q. Yes?

5 A. Some years later I think I was approached again

6 by Nulty who said that the planning permission

7 would be easier to obtain if part of my land were

8 incorporated in it and at that time probably he

9 introduced me to two people called Rhatigan.

10 294 Q. Yes?

11 A. Anthony and Brian Rhatigan.

12 295 Q. Yes?

13 A. And in retrospect I think Nulty's, you know -- his

14 job may have been to find developable land for them.

15 296 Q. Yes?

16 A. Now, I said, "All right." It seemed, you know,

17 likely to be a profitable arrangement and a

18 company was formed and I think it was a

19 shelf company.

20 297 Q. Yes?

21 A. Which is why the name meant nothing to me. I

22 always talked about Kilquade where the land was.

23 298 Q. Yes?

24 A. And I fancy I conveyed my land and they conveyed

25 their bit of land.

26 299 Q. Yes?

27 A. To this company.

28 300 Q. Yes?

29 A. In consideration of the issue of shares.

47
 2 A. And because I had more land than they had; I

3 had slightly more than a third.

4 302 Q. Yes?

5 A. Now, the planning permission was obtained. It may

6 already have been obtained. Any way it was there.

7 303 Q. Yes?

8 A. And it was for quite a large number of houses.

9 I can't remember how many but I would say at

10 least fifty.

11 304 Q. Yes?

12 A. And the idea was to put in what they called

13 infrastructure.

14 305 Q. Yes?

15 A. And then sell individual sites.

16 306 Q. Yes?

17 A. And money was borrowed by the company.

18 307 Q. From Guinness & Mahon?

19 A. Well, I have got here (indicating) an extract from

20 the Company's register.

21 308 Q. Yes?

22 A. And it's evident that money was borrowed from

23 Guinness & Mahon.

24 309 Q. Yes?

25 A. I don't know whether you have seen this

26 (indicating)?

27 310 Q. I think we have?

28 A. You have?

29 311 Q. Yes?

48
 2 is one in 1978 which could be right; money borrowed

3 from Northern Bank Finance Corporation.

4 312 Q. Yes?

5 A. Paid off in 1982.

6 313 Q. Yes?

7 A. And then there is another one; again, Northern Bank

8 Finance Corporation.

9 314 Q. In any event we need not concern ourselves with

10 those?

11 A. Sorry?

12 315 Q. We need not concern ourselves with the various

13 loans?

14 A. Right.

15 316 Q. In any event money was borrowed?

16 A. Yes.

17 317 Q. Yes.

18 A. It says here 1st October 1987.

19 318 Q. Yes. Yes?

20 A. Now, if I could just read from my note at this

21 stage?

22 319 Q. Yes?

23 A. Money was needed to complete infrastructure

24 and it is evident that it was borrowed from

25 Guinness & Mahon.

26 320 Q. Yes?

27 A. The security I am quite sure was the partially

28 developed land backed by personal guarantees.

29 321 Q. Yes?

49
 1 A. I think I remember refusing a joint and several

2 guarantee.

3 322 Q. Yes?

4 A. So that mine was confined to my appropriate

5 proportion.

6 323 Q. Yes?

7 A. This in turn was supported I suspect by an equitable

8 mortgage by deposit of title deeds of my house and

9 land at Woodstock.

10 324 Q. Yes?

11 A. Worth many times my potential liability.

12 325 Q. Yes?

13 A. No other security could possibly have been required.

14 326 Q. Yes?

15 A. The Inspectors seem to believe that the expression

16 suitably secured is some kind of code denoting

17 backing for a source outside the Country.

18 327 Q. Yes?

19 A. I don't believe this, sorry I have to say,

20 and have another theory.

21 328 Q. Yes?

22 A. JD. Traynor had many qualities but he was

23 (a) secretive, and (b) dictatorial. I think that

24 if he was personally satisfied that a loan was

25 adequately secured he would have issued an edict

26 accordingly.

27 329 Q. Yes?

28 A. And this may have been expressed as suitably

29 secured.
 2 A. What arrangements the Rhatigan's may have made I

3 probably did not know and certainly do not know now.

4 331 Q. Yes?

5 A. So, the development from my point of view was

6 not a success. The end of the story was that Tony

7 Rhatigan and I were bought out by Brian Rhatigan

8 yes.

9 A. I think for a pound a piece.

10 332 Q. Yes?

11 A. He, Brian, however made arrangements to release us

12 from our potential liabilities. I simply lost

13 my bit of land and probably some money as well.

14 333 Q. Yes. Mr. Forwood?

15 A. Now, that is the York Securities story.

16 334 Q. Thank you very much. Can I show you some documents

17 relating to York Securities?

18 A. Yes.

19 335 Q. And may be we can work out what is meant by these

20 documents. Page 46, Mary, please? (Same Handed)

21 (Exhibit 13). This is an internal Guinness & Mahon

22 document and it is related as you can see to three

23 loans given to York Securities?

24 A. Yes.

25 336 Q. You see what it says in relation to Number three

26 loan?

27 A. Backers 2 and 3.

28 337 Q. Yes, yes. Under Number three:

29 "We consider this security to be

adequate in all cases."

51
 Do you see that

3 A. Yes.

4 338 Q. And then:

5
"This loan is cash backed"?

7 A. Well, I don't think it was in my case.

8 339 Q. Yes?

9 A. But I can give you two reasons.

10 340 Q. Yes?

11 A. For thinking that it was not.

12 341 Q. Yes?

13 A. One is that I don't believe the cash was there.

14 342 Q. You do not believe?

15 A. The cash was there.

16 343 Q. Yes?

17 A. Because this Jersey trust had valuable assets

18 but they weren't cash.

19 344 Q. Yes?

20 A. And the other is that my wife and I were

21 discretionary beneficiaries under this trust.

22 345 Q. Yes?

23 A. Together with our children and possibly charities;

24 I don't know.

25 346 Q. Yes?

26 A. It would have been possible for the trustee.

27 347 Q. Yes?

28 A. To exercise his discretion and pay, you know, hand

29 over, the assets to us.

 2 A. Which is what eventually happened.

3 349 Q. Yes?

4 A. But the trustee would not.

5 350 Q. Yes?

6 A. Have the discretion or authority.

7 351 Q. Yes?

8 A. To use his assets.

9 352 Q. Yes?

10 A. To back a borrowing.

11 353 Q. I understand that. Can I show you another page?

12 It is page 49, please. (Same Handed) (Exhibit 14)

13 This is an extract from a report made by Guinness &

14 Mahon to the Central Bank of Ireland and this is an

15 Appendix to that report and it is described as

16 "loans set off against deposit accounts." Do you see

17 that?

18 A. Yes.

19 354 Q. And under Irish pound loans we have, one, two,

20 three, four, five, six down you see:

21
"Rockford Investments/York Securities."
22

23 Do you see that?

24 A. Yes.

25 355 Q. That is under the heading of loans set off against

26 deposit accounts. So, again we have a reference to

27 York Securities, in the mind of Guinness & Mahon in

28 any event, being backed by cash but you cannot give

29 me any explanation for that?

53
 2 356 Q. Is Rockford Investments...?

3 A. Yes.

4 357 Q. A familiar name?

5 A. I mean I had forgotten the name.

6 358 Q. I was going to ask you about that as well?

7 A. But that was it. That could not have been done

8 with my authority.

9 359 Q. What was Rockford Investments, Mr. Forwood?

10 A. Well, I fancy it was the name given to this trust

11 in the Channel Islands.

12 360 Q. That was the name of your trust?

13 A. Yes, I think so.

14 361 Q. I see, I see. So, that does seem to indicate that

15 it was linked then with York; does it not?

16 A. It does.

17 362 Q. In relation to cash?

18 A. It does.

19 363 Q. Yes. However, not with your authority?

20 A. No.

21 364 Q. I see. It has been our experience in investigating

22 this whole business that in many cases where a loan

23 proves to have been backed by a deposit abroad the

24 person whose deposit it was was unaware of it?

25 A. Yes.

26 365 Q. It seems to be something that Guinness & Mahon did

27 without consultation. They seemed to have used it

28 as comfort?

29 A. Well, I fear so.

54
 2 A. I fear so.

3 367 Q. Yes?

4 A. I mean I would have been furious.

5 368 Q. Yes?

6 A. Because it wasn't necessary any way.

7 369 Q. I understand. Can I show you something else now,

8 Mr. Forwood, and it is page 48 (Same Handed)

9 (Exhibit 15)? This is a letter headed "Ansbacher".

10 Do you see that?

11 A. Yes.

12 370 Q. It is signed by Joan Williams who was Mr. Traynor's

13 secretary?

14 A. Yes, I remember.

15 371 Q. I do not know if you ever knew Ms. Williams?

16 A. I remember her well.

17 372 Q. Yes. This was after Mr. Traynor's move to the

18 offices of CRH in Fitzwilliam Square and he is

19 writing from that address, or Joan Williams is,

20 to Irish Intercontinental Bank where "Ansbacher"

21 had an account at that time. They had moved

22 their accounts from Guinness & Mahon in 1991?

23 A. Yes.

24 373 Q. You see this letter:

25

26 "Dear Peter, further to my letter of

yesterday's date the Draft for the
27 sterling equivalent of Ir.£25,000
requested therein should be payable
28 to York Securities Limited. Apologies
for the omission."
29

30
55
 1

2 What Joan Williams appears to be saying there is

3 that "Ansbacher" has asked for a draft to come

4 from their account in IIB, from "Ansbacher's"

5 account, payable to York Securities. So, what we

6 have is "Ansbacher" paying York Securities funds.

7 It appears as if York Securities had some right

8 to draw funds from "Ansbacher" in 1991?

9 A. Could I look for a little information from you?

10 374 Q. Certainly?

11 A. Because I think you are much better informed

12 than I am.

13 375 Q. Yes?

14 A. I fancy that I was a Director of York Securities.

15 376 Q. Yes?

16 A. Do you know when I ceased to be a Director of York

17 Securities ?

18 377 Q. I do not know. No, I do not know that. I have an

19 idea it was around the time you left Ireland but I

20 am not certain?

21 A. Well, there is something very odd about this

22 list of charges.

23 378 Q. Right?

24 A. There is one here (indicating) the 3rd May 1990.

25 379 Q. Yes?

26 A. And it is to AIB Finance Limited.

27 380 Q. Yes?

28 A. And the particulars of property:

29
 1 "All that, the property known as Unit 8
and 2 acres at Dunleer Industrial
2 Estate, Drogheda, County Louth,
comprised in folio..."
3

4 Such and such. Now, I have never heard of that.

5 381 Q. Yes?

6 A. And I think that must have been after.

7 382 Q. After you left?

8 A. I mean there was never anything.

9 383 Q. Yes?

10 A. But Kilquade.

11 384 Q. Yes?

12 A. So that I think I was gone.

13 385 Q. And that was what year?

14 A. May 1990.

15 386 Q. 1990?

16 A. I must have been gone then.

17 387 Q. Can you find out, Mr. Forwood, when you left

18 York Securities? Can you find that out for us?

19 A. Well, does the company register retain such details.

20 388 Q. It should, yes. Yes, you should be able to check

21 it there?

22 A. Because, you know, I asked for it.

23 389 Q. We will check. You did not get it; did you not?

24 A. No.

25 390 Q. We should be able to check that?

26 A. Could you?

27 391 Q. We should be able to?

28 A. I mean I really would be grateful.

29 392 Q. Yes. Yes?

57
 2 393 Q. Can you check?

3 A. And there is another one, you see?

4 394 Q. However, just leaving that aside for a moment,

5 Mr. Forwood?

6 A. Yes.

7 395 Q. Can you think of any reason, getting back to the

8 letter I just showed you (indicating) (Exhibit 15),

9 why York Securities would be getting a payment, just

10 supposing it was within your time?

11 A. Yes.

12 396 Q. Can you think of any reason why York Securities

13 would be entailed to draw money from "Ansbacher"?

14 A. None whatsoever but I suspect that it wasn't in

15 my time. You see there is another one here

16 (indicating).

17 397 Q. Yes?

18 A. A borrowing from AIB Finance Limited.

19 398 Q. Yes?

20 A. 3rd January 1991.

21 399 Q. Yes?

22 A. Now, I know nothing whatsoever about a borrowing

23 from AIB Finance Limited.

24 400 Q. Yes, yes?

25 A. You see at that time the borrowing from Guinness &

26 Mahon had not been repaid.

27 401 Q. Yes, yes. Can I say one thing to you, Mr. Forwood:

28 We have spoken to both Brian and Anthony Rhatigan?

29 A. Yes.

58
 2 A. Yes.

3 403 Q. And we asked them questions?

4 A. Yes.

5 404 Q. And we put to Brian Rhatigan this draft in 1991

6 (Exhibit 15)?

7 A. Yes.

8 4 05 Q. And this payment out of "Ansbacher"?

9 A. Yes.

10 406 Q. And we asked him if he could explain it and he

11 said, "No, but that this was not surprising

12 because Mr. Forwood financed York Securities".

13 That was his evidence. We then said, "Well, do you

14 think then Mr. Forwood organised this," and he said,

15 "He was the person with the money. We didn't have

16 money. He was the financier and the banker." So,

17 I put that to you as the evidence we have to date

18 and that is the reason I am asking you about it?

19 A. All right.

20 407 Q. I am being totally honest with you?

21 A. Well, I certainly can say I'm speechless. I mean I

22 am not a property developer by trade.

23 408 Q. Yes?

24 A. I have explained how I got involved in this affair.

25 409 Q. Yes?

26 A. I was desperately interested in the sale of sites

27 and celebrated every time one was sold.

28 410 Q. Yes?

29 A. But that was my part.

59
 1 411 Q. Well.

2 A. And I was not a rich man and I would have thought

3 that the Rhatigan brothers, well they appeared

4 to be...

5 412 Q. They appeared to be?

6 A. Substantial.

7 413 Q. There may be a simple explanation for all of this,

8 Mr. Forwood. It may be what I suggested to you at

9 the beginning; that your Channel Islands funds had

10 in fact been lodged in "Ansbacher" by College

11 Trustees because now that you told me that Rockford

12 is in fact your Channel Islands Company?

13 A. Yes .

14 414 Q. I am going to show you some documents linking

15 Rockford with "Ansbacher"?

16 A. Yes .

17 415 Q. So, it would appear as if that may have happened?

18 A. Yes .

19 416 Q. So, if I could show you first of all page 50 (Same

20 Handed) (Exhibit 16)? We will look at that one

21 first. That is a statement of the account that

22 Guinness Mahon Cayman Trust had in Guinness & Mahon

23 in Dublin after the time that College Trustees began

24 to lodge money with it?

25 A. Yes .

26 417 Q. And the account was entitled:

27

28 " Guinness Mahon Cayman Trust/College

Trustees".
29
 1

2 You see it up at the top?

3 A. Yes .

4 418 Q. Right?

5 A. And I can see:

£
o

7 "Re: Rockford" .
o
o
9 419 Q. And you see Rockford there, yes. There is a sum of

10 money. What is it? £2,000 in credit?

11 A. £2,000.

12 420 Q. So, that appears to be a lodgement into Rockford at

13 that time which was then lodged by College Trustees

14 with "Ansbacher" and it turns up in "Ansbacher's"

15 account in Guinness & Mahon in Dublin. So, this

16 is a lodgement in January 1987. Now, you mentioned

17 to us earlier that you transferred some funds from

18 time to time or assets to the trust yourself?

19 A. Yes .

20 421 Q. Could you have done so in 1987? Would that ring any

21 bell with you?

22 A. No.

23 422 Q. No?

24 A. Could I? I don't think so.

25 423 Q. You do not think so?

26 A. No.

27 424 Q. Because this is certainly a lodgement. This

28 is something for the benefit of Rockford here

29 (indicating) from what appears (Exhibit 16)?

 2 425 Q. Could anyone else be dealing with Rockford's

3 affairs other than yourself? Is that possible?

4 A. I mean Rockford.

5 426 Q. Yes?

6 A. Was administered by, well, I now know, College

7 Trustees.

8 427 Q. Yes?

9 A. And presumably I knew then.

10 428 Q. Yes. However, may be you did not?

11 A. But it was a Channel Islands set-up.

12 429 Q. Yes, yes. However, as I explained to you

13 College Trustees.

14 A. Yes.

15 430 Q. Deposited the funds?

16 A. Yes.

17 431 Q. Unknown?

18 A. Yes.

19 432 Q. Unknown quite frequently?

20 A. Yes.

21 433 Q. And here is another example of it?

22 A. Yes.

23 434 Q. To the client?

24 A. Yes.

25 435 Q. I will just show you another Rockford connection

26 and that is page 51 and 52 (Same Handed) (Exhibit 17

27 & 18). Again, is that 51 you are looking at there

28 (Exhibit 17), Mr. Forwood?

29 A. Wait a minute?

62
 2 A. This one (indicating) (Exhibit 17).

3 437 Q. Yes?

4 A. Okay.

5 438 Q. It is a letter from Joan Williams to IIB lodging

6 a cheque to "Ansbacher's" account. Do you see that?

7 A. Yes.

8 439 Q. And the cheque is then overleaf (indicating)

9 (Exhibit 18)?

10 A. Yes.

11 440 Q. And you see what it is?

12 A. Ye.

13 441 Q. It is a cheque, a revenue cheque in fact,

14 payable to Rockford and it is being lodged into

15 "Ansbacher's" account. So, I think the conclusion

16 that we have come to is probably the correct one;

17 that College Trustees had in fact moved Rockford's

18 funds into "Ansbacher" ?

19 A. Yes.

20 442 Q. That appears during the period which they did that?

21 A. Yes.

22 443 Q. That seems to be the case?

23 A. Yes.

24 444 Q. For all of their clients?

25 A. Yes.

26 445 Q. So that might explain the "Ansbacher" connection

27 to York Securities as well. That may explain the

28 "Ansbacher" backing for York Securities?

29 A. Yes.

63
 2 in connection with York Securities?

3 A. But I should have been absolutely furious.

4 447 Q. You would?

5 A. Apart?

6 448 Q. As many clients were?

7 A. Apart from the fact.

8 449 Q. Yes?

9 A. That the amount astonishes me.

10 450 Q. Yes?

11 A. But I can't challenge that.

12 451 Q. Yes?

13 A. Because although these assets were not income

14 producing.

15 452 Q. Yes?

16 A. There were occasional disposals.

17 453 Q. Yes?

18 A. So that, you know.

19 454 Q. There would have been funds?

20 A. There could have been.

21 455 Q. Yes?

22 A. I can think of one.

23 456 Q. Yes?

24 A. Which was substantial.

25 457 Q. Yes. I think that explains that?

26 A. I mean why should I authorise this (indicating)

27 (Exhibit 14)? I had given them my lands as

28 security.

29 458 Q. You did not?

64
 2 459 Q. You did not authorise this?

3 A. I don't know how much the total borrowing was.

4 460 Q. Yes?

5 A. But my share of it was little more than a third.

6 461 Q. Yes. I think the way Guinness & Mahon were looking

7 at it was, "Here is a company asking us for a loan"?

8 A. Yes.

9 4 62 Q. "We know that one of the shareholders has funds

10 off-shore. We take comfort from that. We already

11 have other security"?

12 A. Yes.

13 463 Q. Title Deeds and guarantees and so on?

14 A. Yes.

15 464 Q. That was the way they operated as far as we can see?

16 A. Yes.

17 465 Q. And so for their own books they were quite satisfied

18 that in the heel of the hunt, if you know push came

19 to shove, there was money off-shore?

20 A. Yes.

21 466 Q. And the client did not know this at all?

22 A. Right.

23 467 Q. That appears to be the case. I think that

24 satisfies me as to what all this is about?

25 A. Yes.

26 468 Q. I think that is clear?

27 A. Yes.

28 469 Q. There is just one other question I want to ask you:

29 Do you know anything about a company called

65
 2 A. No.

3 470 Q. That does not ring any bell?

4 A. No.

5 471 Q. I do not think it is anything to do with you?

6 A. Northgate Investments: Definitely not.

7 472 Q. Not. Yes?

8 A. Marlborough Holdings.

9 473 Q. Let me just see now?

10 A. Can you give me any information.

11 474 Q. It is a company of which you were a director

12 but I think you may well have been a director

13 purely because the Board of Guinness & Mahon was

14 represented on it. It was a company connected

15 with Liam McGonagle; Ken 0'Reilly-Hyland;

16 Des Traynor; Owen Ryan; and yourself and it

17 carried out property development in Marlborough

18 Street in Dublin. I think it is quite possible

19 that you were on the board there?

20 A. Yes.

21 475 Q. Solely as a respective of Guinness & Mahon?

22 A. Yes.

23 476 Q. I do not think we need worry about that?

24 A. I suspect... (INTERJECTION) .

25 477 Q. I think that is the case?

26 A. I can't remember where Marlborough Street in

27 Dublin is.

28 478 Q. The final question I want to ask, Mr. Forwood, is on

29 page 86 (Same Handed) (Exhibit 18). Mr. Forwood, if

66
 1 you would like to keep these documents we have made

2 these copies for you?

3 A. That is all right.

4 479 Q. You are welcome to take them home if you wish?

5 A. Well...

6 480 Q. Whatever you like yourself. You can leave them

7 here if you want?

8 A. I would like to say yes.

9 481 Q. Whatever you would like to do?

10 A. Yes.

11 482 Q. This is an internal memo from Guinness & Mahon

12 (indicating) again of October 1981 (Exhibit 18)?

13 A. Yes.

14 483 Q. It is in relation to rules they were formulating

15 about when to dispose or retain documents?

16 A. Yes.

17 484 Q. The only one that need concern us is Number 4 down

18 at the bottom; the second Number 4. The number 4

19 in brackets. The final item. Do you see this?

20 A. Yes.

21 485 Q. It says:

22

23 "Filing at Woodstock: JAW will talk

to William Forwood regarding the filing
24 in Woodstock and about the removal of
old files and replacement of new ones."
25

26

27 Woodstock: Was that the name of your home,

28 Mr. Forwood?

29 A. Yes.

67
 2 Guinness & Mahon were actually kept in Woodstock?

3 A. Yes.

4 487 Q. That is the reference there (indicating) (Exhibit

5 18) ?

6 A. Yes.

7 488 Q. Was there a reason for this? Were they particular

8 files?

9 A. I think this must have started, there was

10 17 rooms in the basement, when I was still

11 with Guinness & Mahon.

12 489 Q. Yes?

13 A. And when I left Guinness & Mahon I said,

14 "Well, you are welcome to keep them there."

15 490 Q. Right?

16 A. I was not paid rent.

17 491 Q. You were not?

18 A. Paid a rent.

19 492 Q. Yes, I see?

20 A. But I was bought a dehumidifier.

21 493 Q. I see?

22 A. At least I was lent a dehumidifier which

23 I subsequently kept.

24 494 Q. Yes. They were not particular files of Guinness &

25 Mahon?

26 A. I have no idea.

27 495 Q. They just used the storage?

28 A. There were a lot of them.

29 496 Q. I see. So, they were nothing that you had any

68
 2 A. No.

3 497 Q. No, fine?

4 A. Well, not so far as I am aware.

5 498 Q. That is grand?

6 A. There were a lot of them and I never looked at one

7 of them.

8 499 Q. Right. Mr. Forwood, I have no further questions to

9 ask you. Have you any winding up ones?

10

11 END OF EXAMINATION OF MR. FORWOOD BY MS. MACKEY:

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

69
 2 MR. ROWAN:

5 500 Q. MR. ROWAN: I think there was just one

6 question which I perhaps

7 might have asked you when we were talking about the

8 property investment in Cayman?

9 A. Yes.

10 501 Q. In which you had a small interest?

11 A. Yes.

12 502 Q. When you released that interest, Mr. Forwood,

13 what did you do with the proceeds?

14 A. If there were any proceeds. I mean I just can't

15 help you on that. It was a small affair. I think

16 my investment was £1,000 which was worth more then

17 of course.

18 503 Q. We have some information to suggest that Guinness

19 & Mahon believed that the investment would make a

20 profit?

21 A. Yes.

22 504 Q. Generate a profit?

23 A. Yes.

24 505 Q. Of in the region of $200,000?

25 A. I don't think so. I don't think so but of course

26 my share was 1% so I remember that the land in

27 question was in a rather strange name.

28 506 Q. MS. MACKEY: Turin, was it?

29 A. Sorry?

70
 1 507 Q. MS. MACKEY: Turin?

2 A. No, much stranger than that.

3 MS. MACKEY: I see.

4 A. I am not prepared to disclose it in the presence of

5 ladies.

6 508 Q. MR. ROWAN: Without giving you a copy

7 of it there is a minute in

8 November 1970 which says (Exhibit 19):

9 "Mr. Traynor has just returned from a

visit to the Islands. Satisfactory
10 progress is being made with the
disposal of parcels of land.
11 Considerable delays have occurred which
are outside Turin's control"?
12

13 A. How do you spell that?

14 509 Q. T-u-r-i-n's?

15 A. Right.

16 510 Q.

17 "We agreed in principal to extend by

perhaps three months certain of the
18 funds to allow Turin to compensate for
the delays in the past. It looks as
19 if we will make $200,000 profit which
is most satisfactory."
20

21 So...(INTERJECTION)?

22 A. Would Turin have been a purchaser of sites?

23 Does it appear from that?

24 511 Q. It looked more like someone who was actually acting

25 in the purchase?

26 A. I couldn't possibly see that; could I?

27 MS. MACKEY: Certainly.

28 512 Q. MR. ROWAN: Page 123 (Same Handed)

29 (Exhibit 19)?
 1 A. Thanks.

2 513 Q. This is 166/10?

3 A. I can't actually make head nor tail of this but

4 one possible interpretation is that Turin was a

5 prospective purchaser.

6 514 Q. His name?

7 A. I am...

8 515 Q. Sorry. That name crops up in other minutes?

9 A. Does it?

10 516 Q. Yes. The feel that I have from reading all of

11 those minutes is that whoever or whatever Turin

12 was they were actually involved in disposal of the

13 land?

14 A. Would it?

15 MS. MACKEY: I actually thought it

16 might have been the name

17 of the land.

18 A. Sorry?

19 MS. MACKEY: I thought it might even

20 have been the name of the

21 land. I was not very sure.

22 A. No.

23 MS. MACKEY: No.

24 A. I am prepared to write down the names that I can

25 remember and hand them to Mr. Rowan.

26 MS. MACKEY: You do not want to say

27 them out loud then. It

28 is not Turin then.

29 A. No.
 1 MR. ROWAN: All right.

2 A. It wouldn't be an estate agent; would it?

3 MS. MACKEY: Perhaps.

4 517 Q. MR. ROWAN: They might well be. We do

5 not know who or what they

6 are?

7 A. The name means absolutely nothing to me.

8 518 Q. I see. All right. That is all right, Mr. Forwood.

9 I think that concludes our questions. What will

10 happen now is that Ms. Cummins will supervise

11 the tidying up of this transcript?

12 A. Yes .

13 519 Q. We will require you to read it through and then to

14 sign it and have it notarised. So that we will

15 send you a draft document?

16 A. Yes .

17 520 Q. Hopefully we will have corrected any obvious errors

18 in it and if you are content with that perhaps you

19 would then please follow Ms. Cummins' instructions

20 in due course?

21 A. Yes .

22 521 Q. If you wish to have a copy of it for your own use

23 you can purchase a copy from the firm who looks

24 after the stenography.

25 A. Yes .

26 522 Q. And we can arrange that for you.

27 A. Yes .

28 523 Q. However, you can let Ms. Cummins know that.

29 A. Yes .
 2 MS. MACKEY: Thank you, Mr. Forwood.

3 A. Thank you.

5 THE EXAMINATION WAS THEN CONCLUDED.

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

74
oOy B Almy/c^^ ,
Appendix XV (149) (1) (b)
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Appendix XV (149) (1) (c)
Appendix XV (149) (1) (d)
 A Mtmbtr if At Hvoy AmbaeJter HoUbygt PLC Utrcham Banking Croup
P.O. Box H7. (toad Cayman. Briibk Wat India
Please reply to: Hwa*: (*») 94M<S3M
42 Fazwflliam Square, T«kjc c? 4305
Dublin 2. Rue (IW) MfrOMt
(W9) 949-3267
Tel: 765144/763065
Fax: 612035

Garrett Logan, Esq.,

Irish Intercontinental Bank Limited,
91 Merrion Square,
DUBLIN 2.

Dear Garrett,
Could you please arrange to lodge the enclosed cheque for
Stg.£t,057.50 to Ansbacher Limited Call Account No.02/01087/81

Yours sincerely,

For ANSBACHER LIMITED

\i>Uh\ •

DPC/AJW
 900 I.F.D. I I 10595 3884 10-12-01
62
. ( ) o 2a
J w t99t

WC..T
Jf this docurwtt * pmanud THROUGH A BANK-
jj, I Mitfnax moratv. ihaCMhwr ofinhndFtavinija ualpay:
j *»
RPAYEE -
Rockford Iavestsents Halted
7-11 Britannia Place [fl.057.50 I
O * Bath S t r e e t
K * J.M.CRAWLEY
St Keller PnnopaJ Rntnca 0H>car of Inland Ravanoa
Jersey
Channel Islands Tha tiyH'i (igniwi ta raqumd <whM V tw documant
; F-0.W.90I la Ml pnttmd ttnugk pay—'a awn bmk account

•»0000DI»» i0»'lB0li: 0 5=15 3aaun*

' vW
/
•^•uTfi
Appendix XV (149) (1) (e)
 Arsct-r etpc-

mentt xtii

it-aff —«1w»t Pcpwft Account*

Loan Deposit Wat B«1w

IRflwns £ £ £

Rockford InvMtMfits/Yorfc
Securities 172.965 194.243 (21.278)

'Q
Appendix XV (149) (1) (f)
 %

t
n

91. YORK SECURITIES LIMITED ASSESSMENT.

No.1. Loan : £101.796.

No.2. Loan : £211,153.
•f
No..3. Loan : £112,222.
vJsi-
Security : No.1.Loan.
Joint and several guarantee of Brian
and Anthony Rhatigan.
( No.2.Loan.
Joint and several guarantee of-William
( and Joyce Forwood supported by
j, 0<3>L0in equ1table Deposit of Title Deeds of
( Woodstock.

We consider the Security to be adequate in all cases.

THIS LOAN IS CASH BACKED

e — ; n nrritir for Drawdown: &M. & Co. (If war £1m total exposure)
Appendix XV (150) Mr Ronald T Fredette
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Ronald T Fredette.

a) Letter of 25 November 1991 - Ansbacher Limited to Guinness and

Mahon.

b) Guinness and Mahon statement of 20 November 1985 - GMCT/College.

c) Guinness and Mahon statement of 22 January 1986 - GMCT/College.

d) Guinness and Mahon statement of 17 February 1986 - GMCT/College.

e) Guinness and Mahon statement of 20 February 1986 - GMCT/College.

f) Guinness and Mahon statement of 19 March 1986 - GMCT/College.

g) Guinness and Mahon statement of 24 March 1986 - GMCT/College.

Appendix XV (159) (1) (a)
 FIT 17. i: ' ^'v:
A : —» ••> j
Ansbacher limited
Please reply to: P.O. Box 187, Gtaad Cayman, O ynan lihmdt, British West Ipdtea
42 FitzwiDiam Square,'' Telephone (809) 949-8635 Tela* CP 4305
Dublin 2. Facsimile (809) 949-7946 (809) 949-5267
Tel: 765144/763065
Fax: 612035

25th November, 1991.

M. David Humphries, Esq.,
Senior Manager - Operations/
Guinness & Mahon Limited,
17 College Green,
DUBLIN 2.

Dear David,
I confirm Padraig Collery's letter of the 20th November
requesting US$5,000 cash and US$5,000 in Travellers Cheques
payable to Mr. Ron Fredette,
rhe above amounts are to be debited to Ansbacher Limited
ce Foinciana Fund Account No.08428030.
C should be grateful if you could advise the total cost of
rhe above.
C enclose herewith the signed receipts for the Travellers
Cheques.
roi sincerely.

r . D . Traynor.

25H0M«3»
DT/AJW

AMPOPOTTHI iiMiiiiMn«i«M«ioHiaT«uwa^
ttlOUGUWMIBIUKIKII^MMVMIK&Un^
Appendix XV (150) (1) (b)
Appendix XV (150) (l)(c)
 I G+M GUINNESS+MAHON LTD
nrmiiannioum * o.»«« «A r«
CUIXM13 NtMQM CAWMM THUiT / COU«U
u i nuirn SMTcmmr ho.
o u.s. tnuu m
* C4M00*f »AM M.
> UTIUUl CAU. a/A LEDGER Own-M*"! ttMMt
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Appendix XV (150) (1) (d)
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Appendix XV (151) Mr Colm Hyland
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Colm Hyland.

a) Transcript of evidence of Mr Colm Hyland dated 11 July 2001.

b) Statement of Mr Colm Hyland dated 14 May 2001.

c) Guinness and Mahon statement of a/c re GMCT/College of 20 February

1984.

d) Guinness and Mahon statement of a/c re GMCT/College of 18 October

1985.

e) Guinness and Mahon credit committee minute of 21 September 1977.

f) Extract of transcript of evidence of Mr Geoffrey Miller dated 20 February

2000.
Appendix XV (151) (1) (a)
PRIVATE EXAMINATION OF COLM HYLAND

UNDER OATH

ON WEDNESDAY, 11TH JULY 2001

I hereby certify the

following to be a true and

accurate transcript of my

shorthand notes in the

above named interview.

Stenographer
 PRESENT

The Inspectors: JUDGE 0'LEARY

MS. MACKEY BL

Solicitor to the Inspectors MS. M. CUMMINS

Interviewee: MR. C. HYLAND

 1 THE INTERVIEW COMMENCED, AS FOLLOWS, ON WEDNESDAY

2 11TH JULY 2001

5 JUDGE 0'LEARY: Thank you very much

6 indeed, Mr. Hyland, for

7 coming. We have a number of questions to ask you.

8 We should not be long, it will be quite short. The

9 position is that we have been investigating the

10 affairs of a company called Ansbacher, which has

11 been called other things as well, like; Guinness

12 Mahon Cayman Trust, GMCT and various names of that

13 kind down through the years.

14

15 One of the jobs we have been asked to do by the High

16 Court is to identify persons who were, at the

17 appropriate time, which is basically during the

18 1970's, 1980's and 1990's, who were clients of this

19 firm, Ansbacher, under that name or under one of its

20 previous names.

21

22 We are not investigating those people, I want to

23 make that clear but we must find out who were the

24 clients of Ansbacher. The next thing we have got to

25 do is we have to try and establish that for that

26 purpose and also to get a better understanding of

27 the company's operations, we have invited a number

28 of people from time to time to come in and chat to

29 us.

3
 1 It is a very informal procedure. The only formal

2 portion is that which is laid down by the Act under

3 which we operate and that is that the evidence will

4 be given on oath and that at the end of the

5 interview the evidence will be reduced to writing

6 and you will be required to sign it as an

7 acknowledgment that it is a correct record of what

8 went on here today. I will talk to you about that

9 later.

10

11 My name is Sean O'Leary, I am one of the inspectors.

12 In fact I am not the inspector who will be asking

13 you most of the questions today, that person is Ms.

14 Noreeen Mackey, who is also an inspector. There are

15 four inspectors but the two inspectors who have been

16 allocated to interview you are Ms. Mackey and

17 myself.

18

19 I have nothing else to say except that the only

20 really formal part of the procedure is the taking of

21 the oath. So, we will ask you to take the oath now.

22

23

24

25

26

27

28

29

4
 1 MR. COLM HYLAND, HAVING BEEN SWORN GAVE EVIDENCE AS

2 FOLLOWS

5 1 Q. MS. MACKEY: Mr. Hyland, just for the

6 record if I could get a

7 little bit about your background and your career. I

8 think you told us in your statement that you worked

9 with G.B. Miller, what are you by profession or

10 career?

11 A. I did a B. Com. in U.C.D. between 1961 and 1964.

12 Shortly afterwards I emigrated to Canada and spent

13 two and half years there and then came back to the

14 U.K. I worked in the U. K. for a multinational for

15 a period of time, for a year and a half and then

16 through that came in contact with a gentleman called

17 Jeff Miller, whom you have interviewed already.

18 2 Q. Yes?

19 A. He asked me to join, so, I basically

20 joined...(INTERJECTION).

21 3 Q. In what capacity did you join the company?

22 A. I joined on the understanding that I would at a

23 later stage be able to purchase a shareholding. I

24 suppose initially it was on a trial period, I was

25 coming home, I wanted to come home, I mean, the

26 60's, the whole idea was to go abroad and get some

27 experience and then come back.

28 4 Q. Did you join the board immediately?

29 A. No.

5
 1 5 Q. What was your role or function?

2 A. I suppose I was really brought back, we had acquired

3 a new agency, I was working for the company in

4 England, which constituted the main agency of G.B.

5 Miller, which was a company called W.R. Grace.

6 6 Q. Yes?

7 A. It was an American company and they were involved in

8 the production of vacuum packaging materials, which

9 were used in the meat industry and the cheese

10 industry and all of that type of thing. I would

11 have joined initially to -- well, we had acquired a

12 new agency and I suppose he wanted somebody to look

13 after that.

14 7 Q. You were coming back to manage that effectively?

15 A. Coming back to manage that, but I mean, managing in

16 the sense that it was a small company so it was very

17 much a hands on operation.

18 8 Q. Yes?

19 A. I went out selling and administering.

20 9 Q. In due course then did you in fact purchase shares

21 in the company?

22 A. I then became a director but not a shareholder and

23 then subsequently...(INTERJECTION).

24 10 Q. What dates approximately did these things happen?

25 A. I joined Millers in 1969.

26 11 Q. Yes?

27 A. I would have become a director I think probably

28 about 1970, then subsequently I think about '72, '73

29 maybe, I purchased a 10 percent share holding.

 2 A. That's my guess.

3 13 Q. Did you increase that shareholding at any stage?

4 A. I subsequently received an additional 5 percent in

5 1979, 1980, somewhere around 1979 or 1980.

6 14 Q. Yourself and Mr. Miller were the two shareholders?

7 A. There was another director called Ray McCutcheon but

8 I don't think he was a share holder and he left

9 shortly after that.

10 15 Q. To the best of your knowledge the two of you

11 constituted the entire...(INTERJECTION)?

12 A. Yes, and at a later stage another gentleman

13 purchased a 10 percent share holding. Shortly after

14 there was a disagreement and he left the company.

15 That is really how I go got to acquire my additional

16 5 percent if you like.

17 16 Q. Yes, I understand, in 1979?

18 17 Q. JUDGE 0'LEARY: Who was that, do we know

19 his name, that chaps name?

20 A. Dermot O'Regan.

21 JUDGE 0'LEARY: Thank you.

22 18 Q. MS. MACKEY: You sent us in a statement

23 Mr. Hyland, do you have a

24 copy of it there with you? Exhibit 1.

25 A. I do, yes.

26 19 Q. I would like to just go through it, I think that the

27 is the simplest thing, to go through that because

28 you have given us quite a lot of information and

29 thank you for that. To clarify a certain number of

7
 1 matters in that, you start off by telling us that

2 you do not have an Ansbacher account and that you

3 only became aware of the name through the media

4 coverage. As Judge O'Leary said to you at the

5 beginning, Ansbacher was not always called

6 Ansbacher?

7 A. Yes.

8 20 Q. It had a number of different names. It may be that

9 you are more familiar with it under one of its older

10 names. Its first name was Guinness Mahon Cayman

11 Trust, it was a subsidiary of Guinness and Mahon and

12 was called after it. It was also called Cayman

13 International Bank and Trust Company?

14 A. Yes.

15 21 Q. It was called then Ansbacher Limited and Ansbacher

16 Cayman Limited.

17 A. Yes.

18 22 Q. You explained to us here on page four of your

19 statement, Exhibit 1, about a proposal put to

20 yourself and Mr. Miller or to the company, by S.K.C.

21 about the setting up of a trust?

22 A. Yes.

23 23 Q. Could you fill in the background of that a little

24 bit for me? Could you tell me how this proposal

25 first arose and who the person in S.K.C. that dealt

26 with it was?

27 A. I think, as I have said in my statement, Exhibit 1,

28 I would have been aware of it but most of the

29 dealings would have been done by Mr. Miller.

8
 2 A. He was more office based.

3 25 Q. I understand but were you present at the meetings

4 that decided this thing?

5 A. I have no recollection, I knew the background to it,

6 put it that way, but if you ask me to swear on oath

7 was I present at meetings, I couldn't tell you.

8 26 Q. Who told you first about the trust, was it Mr.

9 Miller himself?

10 A. Mr. Miller, yes.

11 27 Q. That is the first you heard about it?

12 A. Yes.

13 28 Q. Had it already been established at that stage?

14 A. No, I think it would have been in the process. I

15 think the likely scenario and you must remember that

16 we are talking about 25 years ago.

17 29 Q. Yes?

18 A. The likely scenario would have been that he would

19 have had a meeting or a suggestion would have been

20 put to him, say maybe it was the review of the

21 annual accounts or something like that, and a

22 suggestion would have been made that it was possible

23 to set this up.

24 30 Q. Yes?

25 A. I would have been aware of it, I mean.

26 31 Q. What was put into this effectively was commission

27 that was being earned overseas?

28 A. Yes.

29 32 Q. You at this stage were already a shareholder; is

9
 1 that correct?

2 A. I would have been a 10 percent shareholder, I think

3 I would have been at that stage, yes.

4 33 Q. In the ordinary course of events you would have been

5 entitled to 10 percent of this commission; would

6 that be the case?

7 A. Correct, yes.

8 34 Q. In that sense part of the money that was rightfully

9 due to you was going into this trust; is that

10 correct?

11 A. Yes.

12 35 Q. Ten percent of whatever went in you were entitled

13 to?

14 A. Yes.

15 36 Q. Coming down a little further towards the bottom of

16 page 4, you say,

17
"In addition and at the Trust's
18 discretion both Mr. Miller & myself
were permmitted to draw monies in
19 proportion to our shareholding."

20

21 Who decided this, how did this come about or how did

22 you know you were committed?

23 A. Again, I presume since I was a 10 percent

24 shareholder in the company and also because the

25 trust was set up and monies were going, if I like,

26 it would have been -- it is rather difficulty to

27 explain because I suppose anything that would have

28 happened, if I was a 10 percent shareholder in the

29 company, I would have been entitled to it, yes.

10
 1 37 Q. That was your understanding at the time?

2 A. Yes.

3 38 Q. Are you familiar with the operation of trusts? The

4 money is actually put outside the control of the

5 owner of the money and it is at the total discretion

6 of the trustees to decide what to do with it?

7 A. Yes. Well, was that the case then?

8 39 Q. Yes?

9 A. All I can tell you is that somebody came to us with

10 a scheme, which, as far as we were concerned, was a

11 legal scheme.

12 40 Q. In fact it was someone in S.K.C. who told you you

13 could withdraw the money?

14 A. We would not have known about this quite frankly.

15 41 Q. Yes?

16 A. It was a suggestion that was put to us.

17 42 Q. It was your understanding that whenever you wished

18 to withdraw money you could do so. You were under

19 no illusions about that, you were quite satisfied

20 that if you wished to have money all you had to do

21 was ask?

22 A. I would think that -- if I think back, and again I

23 preface all this by saying you are asking me to

24 remember details of 25 years ago, I couldn't even

25 tell you what profits the company was making 25

26 years ago. You are asking me to remember details

27 like that.

28 43 Q. Yes?

29 A. I would think that the situation would have been

11
 1 that initially, and as I say, the main reasons, we

2 had had a couple of bank strikes, we were a company

3 that was growing, here was a possibility, of having

4 monies which could be used as backing, so that we

5 could use back to back facilities to develop the

6 business...(INTERJECTION).

7 44 Q. Yes, but I am talking about the withdrawing of the

8 money?

9 A. I am coming to that.

10 45 Q. Yes?

11 A. Here is the situation, we have this initially, I

12 would think that over the period that the

13 arrangement existed it became a little looser.

14 46 Q. Yes?

15 A. Put it that way. That initially we probably

16 wouldn't have drawn monies or it might have been, if

17 you like, a more rigid system in operation but I

18 think it is true to say that as time progressed and

19 if I go back towards the beginning of the 80's.

20 47 Q. Yes. When you did want money, Mr. Hyland, you

21 contacted Mr. Collery?

22 A. Yes .

23 48 Q. Was it always Mr. Collery or were you in contact

24 with Mr. Traynor at any stage?

25 A. No. I said I have never met Mr. Traynor in my life.

26 49 Q. It was always Mr. Collery?

27 A. Yes .

28 50 Q. Were you introduced to Mr. Collery and told this is

29 the man that will...(INTERJECTION)?

 1 A. You see, we had had commercial dealings with

2 Guinness and Mahon, we would have used them for

3 loans and I think foreign currencies, I think I am

4 correct in saying foreign currencies, foreign

5 currency transactions.

6 51 Q. Yes?

7 A. Let's say we were importing.

8 52 Q. Yes, I understand?

9 A. If we were importing from Germany and things like

10 that. Where I have a little difficulty is that

11 there is a number of people in Guinness and Mahon

12 that we dealt with but trying to, over the period of

13 time, trying to differentiate between who we dealt

14 with on either side is a little difficult. I know

15 for instance that we had dealings with a chap called

16 Leonard in there who was a banking manager.

17 53 Q. Yes?

18 A. He would come in and review and we would come in and

19 present our accounts to him.

20 54 Q. Really all I am concerned with are who you dealt

21 with in relation to this particular aspect, not who

22 you dealt with in relation to your normal business?

23 A. What I am saying to you is the difficulty I have is

24 over a period of 25 years actually distinguishing

25 who is who.

26 55 Q. All right.

27 A. Okay.

28 56 Q. Moving on then, were you aware at the time when

29 S.K.C. set this up where the trust was being

 1 established?

2 A. As far as I was concerned and this is where my

3 difficulty is, I certainly haven't heard of any of

4 the names you have mentioned.

5 57 Q. Leaving that aside, where did you think it was?

6 A. The Isle of Man or the Channel Islands.

7 58 Q. Yes?

8 A. The Cayman Islands, I have no recollection

9 of...(INTERJECTION)

10 59 Q. Your belief it was the Channel Islands?

11 A. Oh, yes. As far as I am concerned it was either the

12 Isle of Man or the Channel Islands.

13 60 Q. I think you are correct because I am going to show

14 you a document now, I think you are correct in your

15 belief that it was one or the other and in fact it

16 appears to have been the Channel Islands. I am

17 going to show you a document but I want to explain

18 something to you first about it?

19 JUDGE O'LEARY: Before I show you the

20 document could I ask one

21 question arising out of that if you would not mind.

22 A. Yes, of course.

23 61 Q. You thought it was going to be Isle of Man or the

24 Channel Islands?

25 A. Yes .

26 62 Q. When it was actually set up did you know whether it

27 was the Isle of Man or the Channel Islands?

28 A. I couldn't honestly tell you which one it was

29 because the two, if you like, were synonymous.

 1 63 Q. You had money there for a period of how many years?

2 A. Well, I think I have said in my statement, Exhibit

3 1, that I think this was set up in 1974.

4 64 Q. Yes, and you finally withdrew your last money in?

5 A. In 1984.

6 65 Q. For ten years you had money and you did not know

7 whether it was on the island in the Isle of Man or

8 one of Channel Islands?

9 A. As far as I was concerned it was being administered

10 by G. & M. I met somebody from the Channel Islands,

11 we were introduced to somebody from the Channel

12 Islands on one occasion when he came over here.

13 66 Q. MS. MACKEY: Do you recollect who that

14 was ?

15 A. Yes, I am sure you have his name already, a chap

16 called John Lipscombe.

17 67 Q. JUDGE 0'LEARY: Can I take it that from

18 the available information

19 and the fact that you were introduced to this man

20 from the Channel Islands that you thought it was the

21 Channel Islands?

22 A. I think it would be fair to assume that, yes.

23 68 Q. MS. MACKEY: Before I show you

24 this document then, Mr.

25 Hyland, I should explain to you that what we have

26 learned in the course of the investigation we have

27 been doing for the last year and a half is that one

28 of the subsidiaries of Guinness and Mahon within the

29 Channel Islands, and it was a company called College

 1 Trustees, and indeed Mr. Lipscombe worked for

2 College Trustees?

3 A. Right.

4 69 Q. It managed funds of Irish residents who had funds

5 with Guinness and Mahon in the channel Islands?

6 A. Yes .

7 70 Q. From sometime towards the end of the 1970's or mid

8 1970's onwards it placed those client's monies on

9 deposit with Ansbacher and in the majority of cases

10 the clients did not know that because they were

11 dealing at all times with College Trustees through

12 Guinness and Mahon but in fact the funds were placed

13 with Ansbacher. They were placed by Ansbacher back

14 in Guinness and Mahon, which is where you were able

15 to draw them out, in an account called Guinness

16 Mahon Cayman Trust, which was the name of Asnbacher

17 at the time, stroke, College Trustees.

18

19 I am going to show you a document now, page 58 Ms.

20 Cummins, please, sorry 59 actually, you can give

21 both of them but it is 59 I want to look at first.

22 Actually no, we will look at 58 first, we will take

23 them in order. You see at the top of the page

24 there, Guinness Mahon Cayman/College, Exhibit 2?

25 A. Stroke College, yes.

26 71 Q. Account name?

27 A. Yes .

28 72 Q. We have blotted out a number of the transactions in

29 this that do not relate to you but you will see

16
 1 under the column particulars, with the date 16th

2 February 1988, "Deutschemark Charges" do you see

3 that?

4 JUDGE 0'LEARY: 1984 is it not?

5 MS. MACKEY: 1984, sorry.

6
"Deutschemark Charges, 1032 at 385,
7 Hyland."
Q
o
9 Can you see that Mr. Hyland?

10 A. Yes, sorry, yes. I see DM charges, 1032 at 305,

11 yes .

12 73 Q. "Hyland"?

13 A. Yes .

14 74 Q. Would it be likely that you were getting

15 Deutschemarks at that stage, buying Deutschemarks.

16 Did you buy Deutschemarks occasionally?

17 A. Why would I have bought -- 16th February -- it is

18 possible, yes, quite possible.

19 75 Q. If we move on down further then you see a date 20th

20 February '84, and we have "Sterling, Re Hyland" and

21 we have £50?

22 A. Yes .

23 76 Q. Does that seem likely?

24 A. Had we separated from sterling at that stage.

25 77 Q. We must have if it was being purchased, yes?

26 A. You are suggesting these are charges, are they.

27 78 Q. That appears to be an actual Sterling transaction,

28 the one above is a charge for Deutschemarks, this

29 appears to actually be Sterling that was bought?

 1 A. For £50 is it?

2 79 Q. Yes, it appears to be?

3 A. Yes.

4 80 Q. If we look at page 59, Exhibit 3?

5 A. Yes, which is the second.

6 81 Q. Have you got a relative called Jean?

7 A. My wife is Jan Hyland.

8 82 Q. J-E-A-N?

9 A. No, it's J-A-N.

10 83 Q. J-A-N?

11 A. Yes.

12 84 Q. Do you have a daughter called Jean?

13 A. No.

14 85 Q. JUDGE 0'LEARY: I presume J-A-N is a name

15 which from time to time is

16 abused by people who do not know it?

17 A. Yes.

18 JUDGE 0'LEARY: You can see there on 15th

19 October...(INTERJECTION).

20 A. Maybe if you could explain to me the reason for your

21 question and then maybe I can help you?

22 8 6 Q. MS. MACKEY: I am not even asking you a

23 question at this stage I

24 am pointing out to you that your name appears on

25 these accounts?

26 A. Yes.

27 87 Q. In the name of Guinness Mahon Cayman Trust/College?

28 A. Right, yes.

29 88 Q. What you have indicated to us already indicates that

18
 1 your money was certainly in the Channel Islands?

2 A. Correct.

3 89 Q. Because you were of the belief that it was either

4 there or the Isle of Man?

5 A. Yes.

6 90 Q. The man you met was a Channel Islands man?

7 A. Yes.

8 91 Q. Whom we know?

9 A. Yes.

10 92 Q. In fact he was a College Trustees man.

11 93 Q. JUDGE 0'LEARY: Did you ever hear of

12 College Trustees at that

13 time?

14 A. At the time I couldn't say, I honestly couldn't say.

15 94 Q. Did you hear of it subsequently?

16 A. Oh, I did, yes, obviously reading the papers.

17 95 Q. Did you hear of it in the context of your money

18 subsequently?

19 A. No, no. Well, if I did I certainty have no

20 recollection of it.

21 96 Q. I see?

22 A. I think, your Honour, what I'll have to say is that

23 I didn't take a huge interest, I knew there were

24 monies there, the mechanics of it wouldn't be

25 something that I would take a great interest in.

26 97 Q. MS. MACKEY: Yes, I understand?

27 A. In terms of explaining, assuming that it is my wife,

28 it could easily have been that I said "You're in

29 town, would you ever pick up something?" And it

19
 1 would be as simple as that.

2 98 Q. Yes?

3 A. She wouldn't have been aware of this?

4 99 Q. JUDGE 0'LEARY: I understand that

5 100 Q. MS. MACKEY: It was really the name?

6 A. My wife is Jan, short for Janice.

7 101 Q. Yes. Taking all in all it would appear that your

8 money, which had been in College Trustees or been in

9 the Channel Islands, was moved by College Trustees

10 at the time that it moved all its other client's

11 monies to Ansbacher?

12 A. Yes.

13 102 Q. This is how your name appears in an account with the

14 name of Ansbacher over it and this is the reason

15 that we have asked you to come in and see us.

16 A. Yes.

17 103 Q. Would you accept that in fact that appears to be the

18 case, that your money appears to have been moved?

19 A. Moved to this...(INTERJECTION).

20 104 Q. Without your knowledge more than likely?

21 A. But this is, I mean, the figures that are here, I am

22 just looking at balances, am I reading £3 million?

23 105 Q. This is a statement of accounts of Guinness Mahon

24 Cayman Trust with a number of transactions relating

25 to other people in it, whose names we have blotted

26 out, they have nothing to do with you at all?

27 A. Right, right.

28 106 Q. The only transactions relating to you are those two

29 very small ones indeed?

20
 1 A. The small ones, yes.

2 107 Q. You can ignore those balances, which is the

3 accumulation of accounts of a whole lot of people?

4 A. Right.

5 108 Q. JUDGE 0'LEARY: We are not suggesting you

6 had £3 million Sterling?

7 109 Q. MS. MACKEY: Not at all, no?

8 A. I would like to know where it is.

9 110 Q. No, not at all. Those balances are not yours. The

10 items relating to you are those two very small ones?

11 A. Yes.

12 111 Q. JUDGE 0'LEARY: Could I explain to you,

13 Mr. Hyland, the system

14 they used was that when the money went out to the

15 Channel Islands and went through Cayman back to

16 Dublin it did not come back into one account for

17 each individual?

18 A. Right.

19 112 Q. It came back in grouped accounts?

20 A. Yes.

21 113 Q. There could be dozens?

22 A. Yes, okay.

23 114 Q. This is one of the grouped accounts and the only way

24 we can find out who was in the grouped accounts is

25 by clues like this; do you understand?

26 A. Yes, I do.

27 115 Q. There might be lots of other people that we have

28 similarly identified.

29 116 Q. MS. MACKEY: I really have only one

21
 1 other question, Mr.

2 Hyland, that is in relation to the time at which you

3 terminated this arrangement. You tell us there in

4 your statement, Exhibit 1, that at a given point you

5 broke off your relationship with G. B. Miller?

6 A. Yes.

7 117 Q. At that stage...(INTERJECTION)?

8 A. Well, we sold the company. The company was sold.

9 118 Q. The company was sold and at that stage you

10 liquidated your assets, you closed

11 down...(INTERJECTION)?

12 A. The small amount that was left.

13 119 Q. You withdrew whatever there was form the trust?

14 A. Yes.

15 120 Q. You say you parted company in 1984?

16 A. The company was sold in 1984 and I remained on as

17 managing director of it but working for a Swedish

18 multinational.

19 121 Q. Could it have been some time after that that you

20 actually withdrew the final amount. I am just

21 looking at this transaction on page 59, Exhibit 3,

22 in relation to Jean Hyland and that is October '85;

23 is that possible?

24 A. I would have thought that -- I mean, quite honestly

25 I would have thought in '84 because my recollection

26 was that we sold -- if you say it is October '85, I

27 thought we finished...(INTERJECTION).

28 122 Q. Do you have any documents relating to the

29 transactions?

22
 1 A. I don't, no. As I said in my statement, Exhibit 1,

2 we got very little documents.

3 123 Q. You do say there that you were shown figures?

4 A. Yes.

5 124 Q. Who showed you those?

6 A. I would have thought Padraig Collery. We were

7 parting company, Jeff miller and myself were parting

8 company, we had this approach from a company called

9 Kema-Nobel, who were setting up, they had bought a

10 company in England and they were setting up, if you

11 like, a new venture for them outside their normal

12 business and they made us an offer. I received

13 money for my shares. They asked me to stay on, part

14 of the deal was that Jeff Miller would retire.

15 125 Q. Yes?

16 A. But we had a slight falling out or more than a

17 slight falling out at the time of this deal because

18 he wanted to stay on and they didn't and things got

19 a little bit difficult.

20 126 Q. You think it was Padraig Collery who would have

21 shown you a statement at that stage?

22 A. Yes, at that stage and that is why I say that I

23 thought the thing had -- because my recollection was

24 that I had very little money left at that stage.

25 127 Q. Did he give you the statement or just show it to you

26 and take it away?

27 A. I think he might have given Mr. Miller statements.

28 128 Q. But did he give you any?

29 A. No.

23
 1 129 Q. Did you at any stage get anything from him, any

2 documents, or from the Channel Islands?

3 A. No, certainly not from the Channel Islands. Whether

4 I got -- I have very little recollection of

5 receiving any kind of written documentation. I

6 certainly don't have -- if the question you are

7 leading on to is, do I have anything, the honest

8 answer is I don't, but I have no firm recollection

9 of receiving anything at the time.

10 130 Q. Very good. I have no further questions Mr. Hyland?

11 131 Q. JUDGE 0'LEARY: Just a few, yes. What

12 was the name of the trust

13 that was established?

14 A. The name of trust was I think Goldtan. It is either

15 G-O-L-D-T-A-N or G-O-U-L-D-T-A-N or G-O-L-T-A-N. I

16 think it was, you know, one of those off-the-shelf

17 companies or trusts.

18 132 Q. Yes. That was it. Do you know what date it would

19 have been established?

20 A. Going from my statement, Exhibit 1, I seem to

21 remember that all this happened, it had to be prior

22 to '77 because that is document you sent me.

23 133 Q. Yes?

24 A. Incidentally I have never received any of these

25 documents from G. & M., my understanding was that

26 documents which were submitted should have

27 been...(INTERJECTION).

28 134 Q. Have you requested them?

29 A. No, I never requested them but I would have thought

24
 1 that they would have sent -- you know, if they were

2 sending you documents they would have sent me

3 documents, which they have never done.

4 135 Q. I think they are inundated with that situation but

5 I think you can obviously go and request documents

6 from them?

7 A. Yes.

8 136 Q. They might not have the same amount of detective

9 work as we; do you understand what I mean?

10 A. Right, yes.

11 137 Q. They have other jobs to do as well. If you had a

12 big account in your own name that might be one thing

13 but these are only, if you like, scattered

14 references?

15 A. Yes.

16 138 Q. All right, that is the name of that, that is number

17 one. When you say you received approximately

18 £25,000, and really the amount is of no great

19 relevance to us I can assure you, did you receive it

20 in one, two, twenty or a hundred tranches; do you

21 understand what I mean?

22 A. It would have been a multiplicity over a period of

23 years, you know, if I was going on holidays or

24 something like that I would go in and I suspect this

25 is where my wife's name was brought into this, she

26 wouldn't have really had a clue. I would just say

27 "Would you mind picking something up for me?"

28 139 Q. We will not bother her, you can rest assured of

29 that?

25
 2 140 Q. Multiplicity of small sums, would the average be

3 £500?

4 A. Probably £1,000.

5 141 Q. Probably £1,000?

6 A. You know, £500, £1,000, £1,500, probably not much

7 more. I quite honestly don't know, this £2,500, I

8 have no recollection of the time.

9 142 Q. Could I ask you about the physical piece of paper

10 you would get in your hand when you said you wanted

11 £1,000?
12 A. I have no recollection of actually getting a

13 physical piece of paper other than going in and

14 collecting money, now, whether we signed for

15 anything.

16 143 Q. MS. MACKEY: It was cash then, Mr.

17 Hyland?

18 A. Oh, it was cash.

19 144 Q. JUDGE HYLAND: Cash?

20 A. Yes, I received cash.

21 145 Q. Cash?

22 A. Yes.

23 146 Q. Mr. Collery would arrange that?

24 A. Yes. It was simply a question of going in and

25 collecting it over the counter.

26 147 Q. MS. MACKEY: And identifying yourself?

27 A. Yes, obviously.

28 148 Q. JUDGE 0'LEARY: Do you remember in 1982,

29 this is the last thing I

26
 1 want to ask you about, do you remember in 1982 you

2 decided to make an investment I think which required

3 borrowing money from ICC? Was it the purchase of a

4 warehouse?

5 A. Yes. I bought a warehouse in Coolock, correct.

6 149 Q. That required the borrowing of money from, I think

7 ICC but you had an interim or a bridging finance

8 situation where you were assisted by Guinness and

9 Mahon; do you remember that?

10 A. I don't.

11 150 Q. Do you remember getting some £40,000 from them for a

12 period of some months?

13 A. No, but, I mean, I am not saying that I didn't,

14 obviously you have documents there. I thought I did

15 a straight forward arrangement.

16 151 Q. All I can say really is that you applied for it?

17 A. Yes .

18 152 Q. I cannot say you actually got it?

19 A. That would have been the price of the unit I bought,

20 yes .

21 153 Q. Do you remember then an earlier, smaller sum of

22 money to do with a tax scheme, where you borrowed

23 money from Guinness and Mahon to tide you over until

24 you got a tax refund; do you remember that?

25 A. No, but would it be linked -- was it linked to that.

26 154 Q. No, nothing at all to do with that?

27 A. To the purchase of the warehouse.

28 155 Q. It might have been linked in this way, I understand

29 that when you had the industrial building you got a

27
 1 tax allowance?

2 A. A 50 percent... (INTERJECTION) .

3 156 Q. As a result of that your tax was reduced?

4 A. Correct, yes.

5 157 Q. Do you remember that?

6 A. I know the scheme, so I can remember that, but if

7 you are asking me do I remember the specific details

8 the answer is no.

9 158 Q. I wonder, Ms. Cummins, would you show Mr. Hyland

10 page 33 and 34? (Same Handed) You were still with

11 Millers at that stage, Exhibit 4?

12 A. Yes.

13 159 Q. Do you remember that scheme?

14 A. The answer is no I don't. But it does not seem, I

15 mean, the Industrial Building Allowances were

16 available.

17 160 Q. Yes?

18 A. Just reading briefly through it it seems to me that

19 there is nothing illegitimate about it.

20 161 Q. No, no, I am not suggesting that for a moment?

21 A. Right.

22 162 Q. All I am doing with that actually is trying to test

23 your memory; do you remember it at all?

24 A. I can certainly remember buying the building and the

25 main purpose of buying the building was to avail of

26 the allowances which were available at the time.

27 163 Q. Nothing wrong with that?

28 A. But in terms of...(INTERJECTION).

29 164 Q. You do not remember the details?

28
 2 165 Q. Would you show Mr. Hyland page 24? This is in 1977

3 you borrowed £2,500 from Guinness and Mahon; do you

4 remember that, Exhibit 5?

5 A. No. You asked me that in my statement, Exhibit 1,

6 in the original document and I said "No, I had no

7 recollection" and I repeated that earlier on. I

8 didn't receive this document before, Exhibit 5.

9 166 Q. You never received the document?

10 A. No, I am not saying that, I mean I signed it.

11 167 Q. Would you look at the second page, is that your

12 signature?

13 A. I would think it is, yes.

14 168 Q. In the records of Guinness and Mahon that loan is

15 described as a suitably secured loan?

16 A. In their records, yes.

17 169 Q. Yes, at page 26, Exhibit 6?

18 A. I have that document, you sent me that with the

19 letter.

20 170 Q. Yes?

21 A. So, I have seen this before.

22 171 Q. Suitably secured means that it was backed with funds

23 elsewhere?

24 A. Yes, you explained that.

25 172 Q. Do you remember that?

26 A. No, I said that earlier on that I don't remember

27 that but I am not denying it, but in terms of why I

28 would take a loan for £2,500 and they don't even

29 mention in this why.

29
 1 173 Q. I suppose, Mr. Hyland, in fairness, in 1977 £2,500

2 was a different sum of money than is it is now.

3 A. Yes .

4 174 Q. I suppose £2,500 in 1977 was a third of the value of

5 a three bedroomed semidetached house?

6 A. Yes .

7 175 Q. In current terms it would be £50,000?

8 A. Yes .

9 176 Q. It is a lot of money. Do you remember anything

10 about it?

11 A. The honest answer is no. I mean, I query the value

12 in 1977 because we had considerable inflation then.

13 I know that I bought my house for £18,000 in '75 and

14 I know that it had gone up considerably in value in

15 two years, between 20 and 25 percent.

16 177 Q. Even if it is ten percent, what is the house worth

17 now?

18 A. Oh.

19 178 Q. Half a million, so, you take ten percent of that

20 £50,000?

21 A. I can't deny that I took it out but what it was for

22 I have absolutely no idea.

23 179 Q. Do you remember the money in the Channel Islands

24 being used as security for that?

25 A. I can't, I mean, I can only tell you under oath that

26 I have no recollection of this loan but if that

27 document there says that it was suitably secured and

28 you say in your letter that suitably secured was a

29 code for it being backed then logically I have to

30
 1 accept that.

2 180 Q. Yes?

3 A. But if you ask me have I any recollection, with my

4 hand on the bible I can say I don't have any

5 recollection.

6 181 Q. MS. MACKEY: I think you said yourself

7 that part of the

8 arrangement about the trust was that it could be

9 used as backing?

10 A. Yes, but more for the business. As the original

11 scheme was proposed it was a means of providing back

12 to back financing for the business.

13 182 Q. JUDGE 0'LEARY: I want to ask you about

14 Mr. 0'Regan, was he a

15 party to this offshore deposit scheme?

16 A. No, to the best of my knowledge he was not involved

17 in that section of it because he was running one

18 section of the business, the income stream was

19 coming from another section, so, when he bought into

20 the business he bought in on the valuation, if you

21 like, we separated out and he bought in on a

22 valuation which only took into account the business

23 that he was responsible for, if you like.

24 183 Q. Yes?

25 A. It sounds like a convoluted deal. The other thing

26 that I am anxious about is that he had a personal

27 tragedy some years ago, his only son was killed in a

28 drowning and he has had enough problems, his wife

29 had a break down.

31
 1 184 Q. The information you have given assists us greatly in

2 that regard

3 185 Q. MS. MACKEY: I think you said you

4 checked the matter out

5 with Mr. Miller?

6 A. I checked the matter with Mr. Miller and he is

7 adamant that he was not involved.

8 18 6 Q. JUDGE 0'LEARY: The only thing that is

9 left then, Mr. Hyland, is

10 this, the transcript will be ready in due course.

11 Ms. Cummins, our solicitor, I am not sure if I

12 introduced you?

13 A. No, she introduced herself.

14 187 Q. Ms. Cummins, our solicitor will contact you and at

15 that stage arrangements can be made for it to be

16 signed?

17 A. Yes, okay.

18

19

20

21 THE INTERVIEW WAS THEN CONCLUDED

22

23

24

25

26

27

28

29

32
•3 O C V o W -
Appendix XV (151) (l)(b)
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Appendix XV (151) (l)(e)
 6-MI LOAW F/ic

562:

563: Cotm Hyland, Eiqj

Amounh £2/500

Purpose: Personal Loan

Term: 20/3/78

Rate: 13% fixed

Drawdown: Immediate

Security: Suitably Secured.

Recommended.
564:
 {ILl Q^Wj 4MkiL
<0^ < 3 f f j ^ o .

22 64 Q. Yes. Generally what was the scheme that was

23 operated?
24 A. Yes, this is what I am coming to now. The scheme
25 was that a company -- one of our companies that we
26 were distributors for, paid us on commission only.
27 65 Q. Yes?
28 A. And it was a smaller part of our business but it was
29 quite substantial and they were to set up, or they
13
 1 would set up, a company in Jersey which was an
2 overseas company.
3 66 Q. Yes?
4 A. And we would pay that company or they would appoint
5 that company as advisors to the Irish market, on how
6 they should market their goods to the Irish market.
7 An agreement would be drawn up and we would
8 relinquish half our commission. Our commission
9 was 5 percent. Half the commission was two and a
10 half percent and these would be paid into the
11 Guernsey company.
12 67 Q. What was the name of the company?
13 A. I can't remember the name of the company but I have
14 recalled -- the last meeting we were at they said
' 15 who that company was. You see, I didn't have
16 anything to do with that. This was a company formed
17 by British Ceedack Limited, who were our suppliers.
18 This was nothing unusual for them because they were
19 doing it with agents all over the world, keeping
20 money in London and various places overseas.
21 68 Q. Yes?
22 A. Part of their commission.
23 69 Q. Did British Ceedack Limited form a company on your
24 instructions in Guernsey?
25 A. Yes, yes.
26 70 Q. And, how . . . (INTERJECTION)?
27 A. Basically on my instructions.
28 71 Q. Half the commission that you were entitled to went
29 to this company?
1 A. Yes.
2 72 Q. Can you remember the name of the company?
3 A. I can't remember the name of the company.
4 73 Q- Have you any records available as to this
5 transaction?
6 A. I never kept any records of this.
7 74 Q. Yes?
8 A. I just didn't keep any.
9 75 Q. Who ...(INTERJECTION)?
10 A. I am like that.
11 76 Q. Did Mr. Reid in SKC ...(INTERJECTION)?
12 A. I approached British Ceedack. My father had been
13 agents for them since 1937 and I explained the
14 situation and their sales manager, who is now dead.
15 said, "Geoff, there is no problem. I am doing it
16 for everybody all over the world".
17 77 Q. All right. This will happen then. It was was set
18 up?
19 A. Yes, it was ...(INTERJECTION).
20 78 Q. The money, half the money, went into the
21 Guernsey company?
22 A. It went into this company, yes.
23 79 Q. Then what was the rest of the arrangement.
24 A. Well, I am trying to puzzle out how Guinness & Mahon
25 got involved in this and I think that they took on a
26 trust or bankers in the isle Of Man at whose
27 insistence or suggestion it was, were Guinness &
28 Mahon.
29 80 Q. I am sorry. Was it the Isle Of Man, did you say?
No, were Guinness & Mahon. The bankers who looked
after this company on behalf of Ceedack were
Guinness & Mahon. Now, this I am not I am under
oath so I have got to be very careful about this but
I was asked, "Was it such and such a company? Was
it such and such a company," at the last
Moriarty meeting. Several companies were mentioned
including College Trustees.
Yes?
At that time it didn't click but since then -- and
mind you I have also read this in the newspapers.
This is why I cannot positively say that it was
College Trustees but I am virtually certain it was
College Trustees. I think that that is how
Guinness & Mahon became connected with -- how I
became connected -- although I was a customer of
Guinness & Mahon I think that was my introduction of
the overseas company to Guinness & Mahon.
Yes?
Okay?
Yes.
Now, I thought this was -- well, God, I was 36 years
of age at that time. I was raising two boys and I
...(INTERJECTION).
If you could just ...(INTERJECTION)?
Anyway.
Just tell VIS ...(INTERJECTION)?
All right, so, then ...(INTERJECTION).
If you could just keep it ...(INTERJECTION) ?
 1 A. It went on then.
2 87 Q. Just keep it as short as you can, Mr. Miller?
3 A. Okay, I will. I am just getting a bit carried away.
4 88 Q. Yes. Just keep it as short as you can?
5 A. Yes, Okay. I think that is what it was. Now, I was
6 fully convinced that this was legal or I had been
7 told that it was legal: "Absolutely legal, yes.
8 The money is coming into Ireland. If your
9 commission wasn't paid to you and you just didn't
10 get your commission, you wouldn't have to advise
11 The Revenue Commissioners. This money is going to a
12 separate company outside the jurisdiction of Ireland
13 and it is staying there and it is mounting up."
14 89 Q. Yes?
15 A. "Occasionally this company may lend you a bit of
16 money" or something.
17 90 Q. Who?
18 A. Which I didn't use.

X
19 91 Q. Who advised you about this? Mr. Reid, was it?
20 A. I don't honestly know. I couldn't Bay definitely
21 who it was. I don't honestly know but I know that
22 I felt that while I couldn't really use the money I
23 could go into Quiimess & Mahon and draw against what
24 my guarantees, which I had already given them,
25 where, small amounts of money and that these
26 ...(INTERJECTION).
27 92 Q. Had you an accountant at this time advising you on
28 your own tax affairs?
29 A. Not really, no, I was -- this then just disappeared
1 more or less and X was ...(INTERJECTION).
2 93 Q. No, no. I just want to know ...(INTERJECTION)?
3 A. Yes.
4 94 Q. You had to make ...(INTERJECTION)?
5 A. We had ...(INTERJECTION).
6 95 Q. Mr. Miller?
7 A. We moved ... (INTERJECTION) .
8 96 Q. Mr. Miller?
9 A. We moved ...(INTERJECTION).
10 97 Q- Mr. Miller?
11 A. Yes, sorry.
12 98 Q. Just listen to the question?
13 A. All right, yes.
14 99 Q. I want to know, did you have an accountant looking
15 after your company's affairs?
16 A. Yes.
17 100 Q. During ...(INTERJECTION)?
18 A. Yes, SKC.
19 101 Q. SKC?
20 A. Yes.
21 102 Q. Did you have a separate accountant looking after
22 your own affairs?
23 A. NO.
24 103 Q. Your own tax affairs?
25 A. NO.
26 104 Q. Did SKC look after your own tax affairs?
27 A. Yes.
28 105 Q. They did?
29 A. Yes.
 y
y
y>
>

X
Y
*

V
>

20 113 Q. All right. What occurred then? Would you just tell
21 us what occurred briefly over the years then?
22 A. Over the years I occasionally said I wanted some
23 money from Guinness & Mahon and there was always a
24 little bit of a pause before I got it and then X
25 would go in and cash it, collect the monies. It
26 wasn't very much. We used it only for holidays and
27 things like that.
28 114 Q. who would you contact in Guinness & Mahon?
29 A. Padraig Collery.
1 115 Q. Padraig Collery?
2 A. Yes.
Appendix XV (152) Mr Denis McCarthy
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Denis McCarthy.

a) Transcript of evidence of Mr Denis McCarthy dated 15 June 2000.

b) Statement of Mr Denis McCarthy of 8 June 2000.

c) Guinness and Mahon statement of 12 January 1983 - GMCT/College.

d) Guinness and Mahon statement of 20 November 1981 - GMCT re

College.

e) Declaration of Trust - the Garenne Trust.

f) The Garenne Trust - balance sheet as at 31 December 1985.

2. Correspondence received from or on behalf of Mr Denis McCarthy.

a) Letter of 14 December 2001 - Matheson Ormsby Prentice Solicitors to

Inspectors.
Appendix XV (152) (1) (a)
 PRIVATE EXAMINATION OF

MR. DENIS MCCARTHY

UNDER OATH

ON THURSDAY, 15H JUNE 2000

I hereby certify the

following to be a true and

accurate transcript of my

shorthand notes in the

above named interview.

Stenographer
 PRESENT

THE INSPECTORS: MR. ROWAN FCA

MS. MACKEY B.L.

SOLICITOR TO THE INSPECTORS: MS. M. CUMMINS

INTERVIEWEE: MR. DENIS MCCARTHY

INSTRUCTED BY: MR. ANTHONY 0'GRADY

MATHESON ORMSBY PRENTICE

SOLICITORS

30 HERBERT STREET

DUBLIN 2.
 1 THE INTERVIEW COMMENCED, AS FOLLOWS, ON THURSDAY,

2 15TH JUNE 2000

4 MR. ROWAN: Good morning,

5 Mr. McCarthy. Let me

6 introduce myself, I am Paul Rowan and this is one of

7 my fellow Inspectors, Ms. Noreen Mackey.

8 Mr. McCarthy, this is not a Court this morning, nor

9 is it a Tribunal, it is an interview. As such, if

10 during the course of the interview you wish to seek

11 some guidance from your solicitor, please ask us to

12 stop and we shall do so. Equally, if your solicitor

13 wishes to offer you some guidance, if he would ask

14 us to stop equally and we will provide that

15 opportunity.

16

17 We are going to make a record of the interview and

18 after the interview we will ask you to come and sign

19 a transcript when you have had an opportunity to

20 read through it.

21

22 May I ask Ms. Cummins, our solicitor, to administer

23 the oath, please.

24

25

26

27

28

29

3
 1 MR. MCCARTHY HAVING BEEN SWORN WAS EXAMINED, AS

2 FOLLOWS, BY THE INSPECTORS

4 MR. ROWAN: Mr. McCarthy, Ms. Mackey

5 is going to ask you some

6 questions.

7 1 Q. MS. MACKEY: Mr. McCarthy, you sent us

8 in a statement, do you

9 have a copy of it with you there?

10 A. Yes.

11 2 Q. I would like to go through that in due course. Just

12 before I start to do that, for the record if you

13 would tell us a little bit about your career and

14 background in as brief a fashion as you can so we

15 can establish your business?

16 A. When I left school?

17 3 Q. Yes, what your career has been to date?

18 A. My family business was Odearest, O'Dee & Co. which

19 was founded by my grandfather, the late Michael

20 O'Dee, some 120 years ago.

21 4 Q. You went into this business?

22 A. Yes, I went into the business with my father and I

23 went in with my younger brother.

24 5 Q. You finally rose to what position in it?

25 A. When my father died I became chairman.

26 6 Q. You became chairman?

27 A. Yes.

28 7 Q. That was what year?

29 A. I am very bad at years.

4
 1 8 Q. Roughly.

2 A. Roughly the 1960's.

3 9 Q. In the 1960's some time. Would it be the late

4 1960's?

5 A. Middle 1960's, that is to the best of my

6 recollection now.

7 10 Q. If you cannot remember anything, it is quite okay,

8 just say.

9 A. I will do my best.

10 11 Q. Of course, but if you cannot be specific about

11 dates, just tell us that and that is fine. You

12 became chairman of Odearest in the mid 1960's and

13 you continued on until?

14 A. It was taken over then in the 1970's by an English

15 company called Bondworth.

16 12 Q. Called?

17 A. Bondworth.

18 13 Q. Did you continue on?

19 A. I continued on, yes, with my brother.

20 14 Q. As chairman?

21 A. No, not as chairman. I was managing director, joint

22 managing director. That is to the best of my

23 knowledge.

24 15 Q. Yes. Did that continue then up to?

25 A. Bondworth expanded a lot. They were a British

26 company but they expanded into Australia. They were

27 in the carpet business mainly, manufacturing and

28 wholesaling. They expanded into the manufacture of

29 furniture and then they went into business in

 1 Australia, France and Germany. They bought a lot of

2 shops in Germany.

3 16 Q. Did you have a role in this?

4 A. No, not really.

5 17 Q. Did you leave at that stage?

6 A. No, I was part of the group.

7 18 Q. Are you still with them?

8 A. No.

9 19 Q. Are you retired now?

10 A. Do you want me to follow up what happened?

11 20 Q. Insofar as it relates to you just and where you are

12 now.

13 A. Bondworth went into receivership and we bought the

14 company out.

15 21 Q. We being?

16 A. A group, my brother and myself.

17 22 Q. This group, were these people who were involved in

18 it already?

19 A. No, friends of mine.

20 23 Q. Friends of yours. Can you tell me who they were?

21 A. They were the McGrath Group.

22 24 Q. You bought out the company?

23 A. We bought out the company from the receiver.

24 25 Q. The entire of Bondworth itself?

25 A. No, no.

26 26 Q. Just Odearest?

27 A. Yes.

28 27 Q. That was when, Mr. McCarthy?

29 A. That would have been, again to the best of my

6
 1 recollection, it would have been 1972 or 1973.

2 Don't hold me to those dates.

3 28 Q. Okay, but roughly around then. Did you continue to

4 run Odearest, is that what happened?

5 A. Yes, but with the help of people who were nominated

6 from the McGrath Group.

7 29 Q. Did it continue to trade under the name Odearest?

8 A. It did.

9 30 Q. Your position was what then?

10 A. For a time I was managing director and then I think

11 I became chairman.

12 31 Q. What is your present position?

13 A. No, I have retired.

14 32 Q. You have retired since when, roughly?

15 A. If I knew you were going to ask me these questions,

16 and I have no objection to you asking

17 ....(INTERJECTION).

18 33 Q. If you cannot be precise, that is alright.

19 A. Early 1980's.

20 34 Q. That is grand.

21 A. I could be wrong about that.

22 35 Q. You are retired some years?

23 A. Yes.

24 36 Q. You are not in business now?

25 A. I was a director of companies, do you want me to

26 tell you about that?

27 37 Q. If you would, yes.

28 A. I was a Director of Eagle Star for about 25 years.

29 I retired from that this year. I am in my

7
 1 80th year, so they kept me for a long time. I was

2 on the Board of Beaumont Hospital for 20 or

3 25 years. I was on the Board of Leopardstown for

4 30 years.

5 38 Q. Leopardstown Hospital?

6 A. No, Leopardstown Racecourse. I was on the Racing

7 Board for 30 years. I was senior steward of the

8 Turf Club for 12 years and I am now presently

9 Chairman of the Drugs Centre in Pearse Street. I am

10 Chairman of the Charitable Trust which funds

11 research for Beaumont Hospital.

12 39 Q. Fine, thank you very much, that is grand for your

13 career. If we can have a look at your statement

14 (Exhibit 1) which you sent to us in answer to our

15 letter. You tell us at (B) of your statement that

16 you have never to your knowledge knowingly had any

17 dealings with the company. Now, the company in your

18 statement and in our previous letter refers to

19 Ansbacher or as it was formally called Guinness

20 Mahon Cayman Trust Limited.

21 A. Yes.

22 40 Q. To the best of your knowledge you have never had any

23 dealings with it?

24 A. That's right.

25 41 Q. Therefore you say at (C) you do not have any books

26 or documents. You say then at (D) that in the past

27 you have had dealings with Guinness Mahon Ireland

28 and I would like to ask you about that in a moment.

29 You go on at (E) and over the page, the top of your

8
 1 second page of your statement to say that the bank,

2 Guinness & Mahon, informed your solicitors that

3 there was an Ansbacher account entitled Re College

4 Trustees in which was listed payments to certain

5 offshore entities including payment to a Guernsey

6 incorporated company named Chunga in which

7 Mr. Traynor, on behalf of the bank, had invested

8 some monies belonging to you in 1973.

10 What I would like to ask you about is, firstly, your

11 contact with Guinness & Mahon itself and your

12 relationship with it and, secondly, your

13 relationship, if any, with Mr. Traynor himself. If

14 we could just go through these a little bit. Can I

15 ask you, first of all, when you first developed a

16 relationship with Guinness & Mahon, the bank?

17 A. To the best of my recollection I had a small account

18 there and I mean a very small account, a deposit

19 account and I am not exactly certain of this, but

20 something tells me in the back of my mind that I had

21 in around about the 1970's, 1971 or 1972.

22 42 Q. When you say you think you had, did you know

23 Guinness & Mahon at that stage or did you know

24 someone there?

25 A. I knew it as a reputable bank well thought of in the

26 City.

27 43 Q. Why is it that you think you may have had an account

28 there? Where was your normal bank?

29 A. My normal bank was with the Bank of Ireland.

9
 1 44 Q. What makes you think that you may have had an

2 account with Guinness & Mahon?

3 A. It is a very good question, but I am not really

4 certain of the answer to that question. I have a

5 feeling that I had a small account.

6 45 Q. Did you know Mr. Traynor of the bank?

7 A. I was at a dinner party in a friend's house some

8 time before this thing happened.

9 46 Q. Which thing happened?

10 A. Sorry, some time before I made an investment.

11 47 Q. Right, okay.

12 A. That was the only time I ever met him. He was never

13 a friend of mine or an acquaintance. I wouldn't

14 even call him an acquaintance, I suppose I could say

15 he was an acquaintance when I got to know him at the

16 bank but before that I only met him once at a dinner

17 party.

18 48 Q. So you met him at a dinner party and then you say

19 that was just a short time before you invested some

20 money?

21 A. Sorry, if I said a short time ....(INTERJECTION).

22 49 Q. It was some time?

23 A. Yes, not a very long time.

24 50 Q. Tell me about the investment, what was this

25 investment?

26 A. Yes, I will. My late father had horses with Vincent

27 O'Brien who was a famous trainer, as you probably

28 know, the best trainer Ireland ever produced. After

29 my father died, and I knew him very well, he said to

10
 1 me, 'Denis, why don't we have a get-together on a

2 horse?' I said, 'I haven't a lot of money, how much

3 would it be?' He said, 'about £1,400 or £1,500.'

4 So we went to the sales in 1971 or 1972 and we

5 bought a yearling which was subsequently called

6 Miss Chamozzle and that ran well. It ran, I think,

7 four times. It was unplaced the first time it ran

8 and it won then at the Curragh and I think it was

9 second the next time it ran at the Phoenix Park and

10 it won two others. It was sold eventually to Paul

11 Cole, one of the English trainers for

12 .... (INTERJECTION) .

13 51 Q. To Paul?

14 A. Cole, C-O-L-E.

15 52 Q. Yes. So it was on the profits of this sale that you

16 made ....(INTERJECTION).

17 A. Sorry, I am interrupting, £33,000 I got. There was

18 a time, if my memory is true to me, that Irish

19 Permanent was -- interest rates were very high and

20 the Irish pound was in trouble. This was a tax free

21 amount of money as far as I was concerned because it

22 was a horse, I thought that maybe I would talk to

23 somebody in Guinness & Mahon and I was put in touch

24 with the late Mr. Traynor.

25 53 Q. Can you say who put you in touch?

26 A. I can't remember really.

27 54 Q. Had you at that time financial or legal advisors

28 that you might have consulted?

29 A. No, I didn't consult any legal advisors. In

 1 retrospect, you know...

2 55 Q. So it would have been some mutual friend who

3 suggested you talk to Mr. Traynor or to Guinness &

4 Mahon?

5 A. No. I am inclined to do things a bit on the spur of

6 the moment, I think I did it myself on the spur of

7 the moment. I don't remember getting any advice

8 from anybody and certainly I got no professional

9 advice.

10 56 Q. So you contacted Mr. Traynor anyway?

11 A. Yes, I was put in touch with him.

12 57 Q. When you say you were put in touch with him

13 ....(INTERJECTION).

14 A. My recollection is somebody in the bank.

15 58 Q. You went to the bank and they put you in touch?

16 A. Yes, exactly.

17 59 Q. What did he say to you?

18 A. It is nearly 30 years ago.

19 60 Q. I know, as best you can remember.

20 A. He said, 'this is tax free money and as the pound is

21 possibly in danger of reducing in value, this could

22 be put offshore.'

23 61 Q. He actually said that?

24 A. Yes, or words to that effect.

25 62 Q. Yes.

26 A. After some consideration, and I didn't consult my

27 accountants or any professional advisors, that is

28 what happened.

29 63 Q. Did he give you any more details than that of what

12
 1 would be done with it? Did he talk to you at all

2 about a discretionary trust?

3 A. He did, but I can't remember exactly what. I just

4 wrote down a few notes, may I look at them?

5 64 Q. You may, yes, certainly. These are notes you have

6 just written for the interview today?

7 A. Yes, I wrote them this morning. It doesn't touch on

8 that particular point you are asking me.

9 65 Q. Maybe if I can ask you some questions and if you

10 think that you have an answer in your notes there,

11 we can refer to them that way. We might focus the

12 thing that way. You think you have some vague

13 recollection that he may have mentioned a

14 discretionary trust.

15 A. Yes .

16 66 Q. Do you think that he suggested to you that that

17 would be a good way of investing your money?

18 A. A safe way.

19 67 Q. A discretionary trust.

20 A. I am not sure what a discretionary trust means.

21 68 Q. That is what I was coming to. Did he explain to you

22 what a discretionary trust was?

23 A. No, and I still don't even know. I have a vague

24 idea.

25 69 Q. You do not recollect him explaining to you in some

26 detail what a discretionary trust was?

27 A. No.

28 70 Q. Did he offer you that as an alternative? Did he

29 suggest to you that you might simply open an account

13
 1 or did you get the impression that what he was going

2 to do was setting up a discretionary trust?

3 A. I had an idea that he was going to invest it as it

4 was tax free and didn't come under the -- or I

5 didn't think it came under any rules or regulations,

6 that it probably would have been a wise way of

7 safeguarding and maybe getting a better income.

8 71 Q. Did he tell you where offshore he might think of

9 investing it?

10 A. On the first day?

11 72 Q. Yes.

12 A. I don't know to be honest, I don't remember.

13 73 Q. Did he at a later stage?

14 A. Oh' yes.

15 74 Q. Where did he say?

16 A. Guernsey.

17 75 Q. In Guernsey?

18 A. Yes.

19 76 Q. Did he say to you that it would be with one of the

20 subsidiaries of Guinness & Mahon in Guernsey?

21 A. He didn't.

22 77 Q. Did he say what bank or what institution it would be

23 invested in?

24 A. I didn't get the impression that it was a subsidiary

25 of Guinness & Mahon but that he had a connection

26 with them.

27 78 Q. Did he say where it was or what company or bank?

28 A. He said Credit Suisse.

29 79 Q. He actually said Credit Suisse?

14
 1 A. He did, yes.

2 80 Q. We are going back now to what year, roughly?

3 A. 1973, I think, or 1974.

4 81 Q. Did he mention College Trustees?

5 A. No.

6 82 Q. He said Credit Suisse?

7 A. Yes.

8 83 Q. Was it decided at that meeting that that was what he

9 would do?

10 A. I might have waited a few days. It would be easy

11 for me to say yes, but I must admit that I can't

12 remember.

13 84 Q. It was either then or some time later that you made

14 a decision that you would go along with this?

15 A. Yes.

16 85 Q. Did you then transfer money to him or how did the

17 actual investment work? Did you give him a cheque

18 or a draft or whatever?

19 A. I think I gave the cheque that I got myself.

20 86 Q. To him?

21 A. Yes, again that is to the best of my recollection.

22 87 Q. That is all we can ask you to do today, to the best

23 of your recollection. Do you recollect what

24 procedures were followed in doing that? Did you

25 sign some document or mandate?

26 A. I don't remember signing any document.

27 88 Q. Did you understand that the money would be invested

28 in your name or through the name of some company?

29 A. I didn't think it would be invested in my name.

15
 1 89 Q. You did not?

2 A. No.

3 90 Q. Why did you not think that?

4 A. Because I think my understanding was that it was

5 possibly a trust.

6 91 Q. The money would be held for you by trustees?

7 A. Or in a trust. I was very raw in those days, I

8 didn't know very much about this.

9 92 Q. Your understanding was that this money would not be

10 held in your name?

11 A. That's right.

12 93 Q. But that beneficially it was your money and you

13 could use it, did you understand that?

14 A. I did.

15 94 Q. Did Mr. Traynor tell you that?

16 A. Yes, that was my understanding.

17 95 Q. Did you understand from Mr. Traynor that although

18 the money would not be in your name, that if you

19 wished you could call upon it, did you understand

20 that?

21 A. Yes, but I think the understanding was that it

22 wasn't a short-term, it was a long-term investment,

23 not a short-term.

24 96 Q. Yes, I understand that, it was not like opening an

25 account that you could withdraw money from the next

26 day if you wanted it.

27 A. No, exactly.

28 97 Q. Did you understand that you could if you wished

29 withdraw money if you needed it at some time?

16
 1 A. I suppose so, yes, but it wasn't my intention to do

2 that.

3 98 Q. Yes, but you did not feel it was so tied up that you

4 could not access it at all, did you?

5 A. I don't want to be awkward, I really don't think so.

6 99 Q. I think you said this was around 1973?

7 A. Yes .

8 100 Q. You have mentioned in your statement (Exhibit 1) to

9 us here on the second page this Guernsey

10 incorporated company named Chunga.

11 A. That's right, I have a note on that. Chunga seems

12 to be a company in Guernsey associated with Credit

13 Suisse and there does not seem to be any information

14 for the period from 1973 to 1978 in relation to what

15 was happening there. There is no information

16 despite my solicitors having written to Guinness &

17 Mahon, Guernsey and Credit Suisse.

18 101 Q. What you are telling me there now is that you have

19 done some researches at the moment and you cannot

20 find anything out about it?

21 A. Sorry, this was when I reported this to the Revenue.

22 102 Q. This is all in recent times you are talking about?

23 A. Within the last two years.

24 103 Q. What I am really asking you is did you do anything

25 about Chunga at that time? Was it a name

26 Mr. Traynor had mentioned to you in connection with

27 your investment?

28 A. No.

29 104 Q. Had you heard of Chunga at that time?

 1 A. Credit Suisse was there in my brain.

2 105 Q. Is the first time you heard of Chunga when Guinness

3 & Mahon contacted you or had you known about it?

4 A. I don't know, I don't want to in any way say

5 anything that is not what I know for 100%.

6 106 Q. Let me put it another way; are you happy that Chunga

7 is a company connected with your investment?

8 A. Yes, I think so, yes.

9 107 Q. Did you over the years -- sorry, I should ask you

10 how long this investment continued for or is it

11 still in existence or what happened to it?

12 A. When the settlement or when we proceeded to make a

13 settlement with the Revenue, the money had gone then

14 to a company called Garenne Trust and their only

15 asset was a loan of approximately £138,000.

16 108 Q. Sorry, when you say the money had gone to a company

17 called Garenne Trust?

18 A. It was a loan to Garenne Trust.

19 109 Q. When did all this happen? Before the settlement

20 with the Revenue, was it?

21 A. Oh' yes.

22 110 Q. Maybe we could follow the history a little bit of

23 it. This money was invested by Mr. Traynor in

24 Guernsey?

25 A. Yes.

26 111 Q. Then you say it went to a company called Garenne

27 Trust?

28 A. No, sorry, I may be misleading you there. One

29 single investment was made by me, one single. I

18
 1 didn't take any money out of my pockets or my income

2 and throw it over there. I just had one single

3 investment.

4 112 Q. Yes, I understand. Mr. Traynor invested that for

5 you in Guernsey?

6 A. Yes.

7 113 Q. With Credit Suisse, as you understood it?

8 A. Yes.

9 114 Q. And connected with that was this company Chunga?

10 A. Yes, apparently. It says here or my recollection

11 anyway at least, and I think this is correct;

12 "Chunga's only asset was a loan of

approximately £138,000 to the Garenne
13 Trust. This loan was forgiven."

14

15 115 Q. Mr. McCarthy, you say you jotted this down this

16 morning.

17 A. Yes.

18 116 Q. Where would you have got all that information from

19 this morning?

20 A. From letters that were sent to the Revenue.

21 117 Q. By you?

22 A. My solicitors.

23 118 Q. These are letters relating to this investment?

24 A. Yes, they must be.

25 119 Q. If they are relating to this particular investment

26 and this is the investment that we are looking at

27 here, it would be relevant to us to see those

28 letters insofar as they relate to this aspect. We

29 are not concerned with other tax affairs of yours in

19
 1 any way if you have other tax affairs.

2 A. No, I have no ....(INTERJECTION).

3 120 Q. We are not concerned with your affairs and your

4 discussions with the Revenue in any way. What we

5 are concerned with ....(INTERJECTION).

6 A. My other tax are absolutely and always have been...

7 121 Q. I understand. What we are concerned with is any

8 documentation you might have in relation to this

9 investment you made through Mr. Traynor which

10 resulted in what appears to be the setting up of a

11 Trust. If you have documents that actually show

12 what happened to the investment.

13 A. I am not sure. May I talk to my solicitor?

14 MS. MACKEY: Certainly you may, yes.

15 MR. 0'GRADY: May we go outside?

16 MS. MACKEY: Certainly.

17

18

19 (SHORT BREAK)

20

21 MR. 0'GRADY: Mr. McCarthy's view on

22 instructions to us would

23 be that the documentation in relation to this

24 investment on advice from us did not come within the

25 ambit of Schedule C or Appendix C to your letter.

26 If you are saying that it is relevant and he set out

27 everything in the statement or any connection that

28 he is aware of between the company and his

29 investment, if you are saying to us that that

20
 1 documentation is relevant, we will of course be

2 happy to provide that.

3 MS. MACKEY: That is what we are saying

4 and in fact I am going to

5 ask Mr. McCarthy to look at some Guinness & Mahon

6 statements now of the account of Guinness Mahon

7 Cayman Trust which is Ansbacher showing transactions

8 in relation to Chunga.

9 MR. 0'GRADY: Could I say finally or

10 submit as my final input

11 that we have requested copies of that documentation

12 from Guinness & Mahon and as of today we have not

13 received it.

14 A. That is in the statement, isn't it?

15 MS. MACKEY: Yes, it is, Mr. McCarthy.

16 On the basis of this and

17 what I am now going to show Mr. McCarthy, we say

18 that this documentation would be relevant to us

19 ....(INTERJECTION).

20 MR. 0'GRADY: And comes within the ambit

21 ....(INTERJECTION).

22 MS. MACKEY: Comes within the ambit

23 because it connects Chunga

24 with Ansbacher and, therefore, any investigation of

25 Ansbacher is entitled to look into Chunga which, as

26 Mr. McCarthy has explained to us, is a company

27 connected with the investment, therefore we are

28 entitled to look at the investment.

29 MR. 0'GRADY: The difficulty was we

21
 1 did not know precisely

2 what the connection between them was.

3 MS. MACKEY: I understand that. That

4 is fine and it was not

5 clear, I think, to any of us, either to ourselves or

6 to Mr. McCarthy until we began to tease the thing

7 out now with you what the connection exactly was.

8 A. The only thing is I never had anything to do with

9 the running of Chunga. All I know is that the

10 investment was made or appeared to have been made.

11 122 Q. That is the point and I think you have explained

12 that to us when you say that in fact the account was

13 not in your name or the Trust was not in your name

14 and that explains why you had nothing to do with the

15 running of it. Mr. Traynor, presumably, looked

16 after all that and it was done, it would appear,

17 through Chunga or in connection with Chunga.

18

19 Anyway, if I might just pass you a document or two

20 here to have a look at. First of all, page 28

21 (Exhibit 2). (SAME HANDED). This is a statement,

22 Mr. McCarthy, issued by Guinness & Mahon in Dublin

23 and it is a statement of an account that was held

24 with them. You will see the name at the top, it is

25 GMCT/College Sundry Sub-Account. I will explain to

26 you what that actually is. In Guinness & Mahon in

27 Dublin there was at that time, that is 1982, there

28 was at that period an account in the name of GMCT

29 which is Guinness Mahon Cayman Trust, and that is

22
 1 the former name of Ansbacher, the company we are now

2 investigating. The account was in the name of

3 Guinness Mahon Cayman Trust with a reference College

4 or College Trustees, as you see there GMCT/College

5 and what it was was a subsidiary of Guinness & Mahon

6 College Trustees in Guernsey placed money of Irish

7 investors into Ansbacher, into Guinness Mahon Cayman

8 Trust and that money was held in Guinness & Mahon in

9 Dublin in this particular account and transactions

10 relating to that money passed through this

11 particular account. The account in total comprised

12 the pooled money of numerous investors, Irish

13 investors who had money in the Channel Islands with

14 College Trustees of whom Credit Suisse is the parent

15 company in fact. If you see there in the

16 Particulars you will see the date of 20th December

17 1982 and you see Re Chunga, do you see that there,

18 Mr. McCarthy?

19 A. Yes.

20 123 Q. You see a credit of £1,000. That shows that the

21 company we have been talking about, Chunga, lodged

22 money or money was lodged on behalf or Re Chunga to

23 this account which is the Ansbacher/College Trustees

24 account in Guinness & Mahon. That is how we link

25 your Chunga and your investment with Ansbacher and

26 that is why we are talking to you today. What would

27 appear to have happened is that Mr. Traynor having

28 invested your money in Guernsey with Credit Suisse

29 of which College Trustees is a subsidiary, College

23
 1 Trustees in turn placed your money along with a lot

2 of other peoples' money with Ansbacher which at that

3 time was called Guinness Mahon Cayman Trust who in

4 turn placed it in this account in the name of both

5 of them, Guinness Mahon Cayman Trust and College in

6 Guinness & Mahon, and so we see Chunga appearing

7 there with a credit. That would appear to be money

8 that was lodged in connection with Chunga or perhaps

9 through the Trust, it is not very clear, but you can

10 see from that that a transaction relating to Chunga

11 has passed through this Guinness Mahon Cayman

12 Trust/College account. Does that not appear from

13 that document to be the case?

14 A. I have never seen that.

15 124 Q. I understand that. You may keep this document, it

16 is one of the ones, presumably, Guinness & Mahon

17 will furnish to you when they finally get around to

18 furnishing you with the documents you have asked

19 them for.

20 A. In any valuations that I got, that didn't come into

21 it.

22 125 Q. It is in the light of that that we do consider that

23 the documents for which you drew up your notes this

24 morning would be relevant to our enquiries and we

25 would ask you if you would furnish those to us so

26 that we could ....(INTERJECTION).

27 A. The ones to the Revenue?

28 126 Q. Let me put it this way Mr. McCarthy, whatever the

29 source documents you used for the notes that you

24
 1 drew up for the interview here today, the ones you

2 have been reading to us from, wherever you got the

3 information that you put into those notes would be

4 relevant to us.

5 A. They came from...

6 127 Q. If you would furnish those to us, we would be

7 grateful.

8 A. A copy?

9 128 Q. Yes, a copy, of course. Anything you have in

10 relation to Chunga or in relation to the investment

11 that Mr. Traynor made for you or in relation to this

12 Trust -- what did you call it again?

13 A. Garenne.

14 129 Q. How do you spell that?

15 A. I think it is G-A-R-E-N-N-E.

16 130 Q. Thank you. Anything you have in relation to those

17 would be of relevance to us and we would ask you if

18 you would furnish them to us.

19 A. Yes .

20 131 Q. That would be grand. Mr. McCarthy, just moving on a

21 little bit from that, did Mr. Traynor give you any

22 code or reference for your account? Did he ever

23 mention to you "B/G" as being a code or reference?

24 A. No.

25 132 Q. He never did?

26 A. Not to my recollection.

27 133 Q. Okay. In the course of the years up to the time

28 that you concluded your transactions with the

29 Revenue -- sorry, did you then close this Trust or

25
 1 account at that point?

2 A. Yes.

3 134 Q. You went and closed it down, you instructed

4 Mr. Traynor to close it, did you?

5 A. He was long dead.

6 135 Q. Was it Mr. Collery then? How did you close it down?

7 A. Directly with Guernsey.

8 136 Q. Who did you speak to there?

9 A. (Pause).

10 137 Q. Was it a Mr. Ellis?

11 A. It probably was.

12 138 Q. Brian Ellis?

13 A. There was another man, Woodward.

14 139 Q. Christopher Woodward?

15 A. No, I don't think it was Christopher.

16 140 Q. It may have been Mr. Woodward or it may have been

17 Mr. Ellis?

18 A. Yes.

19 141 Q. Had you had contact with Mr. Ellis, does that name

20 ring a bell with you?

21 A. Yes.

22 142 Q. Brian Ellis?

23 A. Yes, but not very much.

24 143 Q. He would be one of the officials in College Trustees

25 in fact, Brian Ellis.

26 A. I didn't know that.

27 144 Q. Over the years did you have contact directly with

28 these people at all stages for information and

29 transactions did you go through Mr. Traynor?

26
 1 A. In what regard? For what reason?

2 145 Q. For anything you wanted to do in relation to your

3 Trust, either information or transactions?

4 A. No, I would get valuations from time to time.

5 146 Q. You mean statements of the balances?

6 A. Yes.

7 147 Q. Where would you get those from?

8 A. In Guinness & Mahon or maybe sometimes sent

9 directly.

10 148 Q. From Guernsey?

11 A. I am not sure.

12 149 Q. Do you have any copies of those still?

13 A. No. Five years ago we had a house in Temple

14 Gardens, I have seven children, a big house and five

15 years ago approximately we sold that house and moved

16 to an apartment in Ballsbridge. My wife, Rhona,

17 decided that she wouldn't be able to take all the

18 paperwork which was a huge amount of paperwork

19 because of my involvement in various businesses,

20 some of them I didn't even mention to you. There is

21 nothing very sinister about any of them.

22 150 Q. No, no.

23 A. So she said that she would have to get them -- what

24 is the word?

25 151 Q. Shredded?

26 A. Shredded, yes.

27 152 Q. So a number of these documents got shredded, is it?

28 A. Yes, but this is long before anything like this.

29 153 Q. I understand. That explains why you have not got

27
 1 the documents. The statements that you got from

2 time to time, you say you sometimes got them in

3 Guinness & Mahon, was it Mr. Traynor who would give

4 them to you?

5 A. I didn't see Mr. Traynor that often. There were

6 various people in there.

7 154 Q. Would you go in and ask for a statement or were

8 these issued regularly to you?

9 A. Not very regularly. I can't remember to be

10 perfectly honest with you.

11 155 Q. Was it just on your request generally?

12 A. Being the kind of person that I am it was probably

13 on my request, but I am not certain.

14 156 Q. Would the statements simply indicate to you the

15 balance of your transactions?

16 A. No, it would give full details.

17 157 Q. Were they headed in some way?

18 A. Credit Suisse as far as I know.

19 158 Q. You do not have any copies. Did they show interest

20 accumulating on the balance?

21 A. Did they show interest?

22 159 Q. Yes .

23 A. I don't understand what you mean by that.

24 160 Q. Did interest accumulate on the balance and did the

25 sum of interest appear on the statements?

26 A. Some of the investments were in equities, there

27 wouldn't be any question of interest.

28 161 Q. So we are not talking about statements showing a

29 figure, a sum of money; are we not?

28
 1 A. Yes .

2 162 Q. We are?

3 A. Yes .

4 163 Q. That was that on deposit? Was that accruing

5 interest?

6 A. No, as far as my recollection goes, and I hope I am

7 being accurate, they came in the form of showing the

8 investments.

9 164 Q. In other words, showing shares in equities?

10 A. Yes, or maybe in gilts.

11 165 Q. Was the entire of your original investment dispersed

12 in the purchase of shares and equities in gilts or

13 was some of it on deposit itself in some kind of

14 fixed deposit that mounted up?

15 A. I don't think so.

16 166 Q. None of it?

17 A. But I don't know.

18 167 Q. So you do not know then whether interest accrued on

19 your original investment or not, whether there was

20 any sum of it in money that might have earned

21 interest, do you?

22 A. No, but if Goodbodys followed the example of what

23 was happening with the previous people looking after

24 it, after my investment, it probably would have been

25 in shares and in gilts.

26 168 Q. Are we talking about your original investment that

27 you made through Mr. Traynor?

28 A. Yes .

29 169 Q. How did Goodbodys come into this?

 1 A. To the best of my knowledge in the early 1990's,

2 1991 I would say or it could be a year one way or

3 the other, they decided ....(INTERJECTION).

4 170 Q. Who decided?

5 A. Credit Suisse, maybe because of bad performance that

6 they would give the portfolio -- is that a suitable

7 word to use?

8 171 Q. Right.

9 A. To Goodbodys.

10 172 Q. Prior to that from 1973 to 1991, however, Goodbodys

11 did not have the portfolio?

12 A. No.

13 173 Q. So what was happening to your original investment

14 during that period?

15 A. Sorry?

16 174 Q. What was happening to your original investment

17 during that period? From 1973 to 1991 where was the

18 money or what was happening to it?

19 A. I thought it was over in...

20 175 Q. What did you think it was doing there? Was it

21 simply mounting up?

22 A. I thought it was being invested which it was because

23 I was getting some accounts showing the investment.

24 176 Q. These were again purchase of equities and gilts?

25 A. Yes, I think, if I remember correctly, it is

26 possible they might have put some of it into

27 Guernsey.

28 177 Q. Could you have had some of it in foreign currency,

29 US dollars?
 1 A. I don't think so. I don't know, but I don't think

2 so.

3 178 Q. During the course of all those years did you

4 withdraw any of your original investment or use it

5 in any way and have it transferred?

6 A. Yes.

7 179 Q. You did?

8 A. Yes.

9 180 Q. How did you go about that?

10 A. May I have a look at my notes?

11 181 Q. Yes.

12 A. Loans were made to me at a later date.

13 182 Q. Loans?

14 A. Yes, they call them loans.

15 183 Q. Who called them loans, Credit Suisse?

16 A. Yes.

17 184 Q. Can you tell me about those and how that happened?

18 A. How I got them?

19 185 Q. Yes, what you did if you wanted one.

20 A. If I wanted one in the Guinness & Mahon time I would

21 have to ring up Guernsey.

22 186 Q. You would ring who?

23 A. I would ring somebody in Guernsey.

24 187 Q. Where would you have got their phone number from?

25 A. From Guinness & Mahon.

26 188 Q. Do you remember who it was you would phone?

27 A. Different people.

28 189 Q. Do you not recollect any particular name?

29 A. I can't really. Woodward, I think, would be one

31
 1 name, possibly Ellis.

2 190 Q. What would you say?

3 A. I would say -- well, it usually happened around

4 Christmas time, but this is only in the latter, as

5 far as I know, in the latter period. I would say

6 that I wanted X amount of money for whatever.

7 191 Q. And they would ....(INTERJECTION).

8 A. They would tell me where to collect it.

9 192 Q. Where would you collect it?

10 A. In the Guinness & Mahon time it was in Guinness &

11 Mahon.

12 193 Q. You would go in there and it would be available for

13 you there?

14 A. Yes.

15 194 Q. When you say they called them loans, did you have to

16 repay these?

17 A. No.

18 195 Q. So as far as you were concerned ....(INTERJECTION).

19 A. I only discovered that they called them loans only

20 recently.

21 196 Q. Where did you discover this recently?

22 A. I think it was through our solicitors.

23 197 Q. Through your solicitors?

24 A. I think so, yes.

25 198 Q. Would this be through documentation that you

26 referred to?

27 A. Possibly.

28 199 Q. So all this documentation should show us all of

29 this, should it?

32
 1 A. No, I can't say that.

2 200 Q. Is there documentation at the moment in the presence

3 of your solicitors that relates to these withdrawals

4 and to this Trust generally?

5 A. Not any more than I am giving you now.

6 201 Q. That you will be giving us?

7 A. I will give you any more that I can remember.

8 202 Q. You will actually give us copies of the

9 documentation, not just notes that you have made

10 from them?

11 A. What do you mean by copies of the documentation,

12 sorry?

13 203 Q. As I understand it from what you have said to us

14 today and especially since you came back from the

15 brief consultation with your solicitor, you have

16 notes there that you made this morning in

17 preparation for this interview and you made those

18 from documents either in your possession or in the

19 possession of your solicitor?

20 A. No, there are some notes made from this statement,

21 for instance, and some notes made from your document

22 here.

23 204 Q. Our letter?

24 A. Yes .

25 205 Q. You were reading out to me there earlier,

26 Mr. McCarthy, information that is not in either of

27 those documents, that was information in relation to

28 the Garenne Trust.

29 A. Yes .
 1 206 Q. I asked you where you got that and you said you had

2 some documents that you got that information from,

3 did I misunderstand you?

4 A. Documents, I don't know if you call them documents,

5 maybe they are documents, under the broad word of

6 'documents'.

7 207 Q. In other words, you have that information somewhere

8 else other than on that bit of paper there today; is

9 that right?

10 A. I think so.

11 208 Q. As I understand from what your solicitor said when

12 you came back into the room, you are prepared to

13 make that available to us if we consider it relevant

14 and we do consider it relevant?

15 A. Yes .

16 209 Q. So you will make that available?

17 A. Yes .

18 210 Q. Grand, that is clear. Just one other question,

19 Mr. McCarthy, and then I am finished.

20 A. Sorry, I don't want to interrupt you.

21 211 Q. Go ahead.

22 A. You don't want me to say anymore about Goodbodys?

23 212 Q. I don't think so, no. That is alright, thank you.

24 One other question I want to ask you, you have

25 explained to us about the withdrawals and what I

26 want to ask you is did you after the first

27 investment make any additions to the fund, any

28 further lodgments?

29 A. Not a penny.
 1 MS. MACKEY: Not a penny, okay. I have

2 no further questions,

3 Mr. McCarthy, thank you very much. Mr. Rowan may

4 have some questions.

6 213 Q. MR. ROWAN: Mr. McCarthy, fairly early

7 on in the interview you

8 mentioned that your initial investment with Guernsey

9 was made by Mr. Traynor and it was the proceeds of

10 the sale of the horse.

11 A. Half the proceeds.

12 214 Q. So half the proceeds I think you indicated

13 represented about £33,000?

14 A. Yes.

15 215 Q. A little later you indicated to us that Chunga's

16 only asset, I think was the way you put it, was

17 loaned to the Garenne Trust and I think you referred

18 to it as £138,000.

19 A. I have a note here the only asset appeared to be a

20 loan of approximately £138,000 to the Garenne Trust

21 and that was done without my knowledge or

22 initiative.

23 216 Q. I think my question has to be how did £33,000 get to

24 be £138,000 if you did not make any further

25 deposits, as you indicated to Ms. Mackey?

26 A. I think there was more in Chunga than my £33,000.

27 217 Q. Can you give me some explanation of that?

28 A. I don't know. I have sworn and I will swear again

29 that I never gave another penny, I cannot explain it

35
 1 to you and I might have got it all baw ways, but I

2 certainly never gave one shilling or one penny extra

3 for investment to Guernsey or to Guinness & Mahon.

4 I can't explain it.

t—1
Q. Presumably, Mr. McCarthy, your investment was
CO
5

6 growing in value over a number of years?

7 A. I would say so.

8 219 Q. So it would have been expected to have seen an

9 increase therefore in the value of it and that might

10 be a partial explanation?

11 A. Yes.

12 220 Q. Were there any other people involved in Chunga other

13 than yourself?

14 A. I don't know, Chunga has only been coming into my

15 mind in very recent times. I thought, maybe very

16 stupidly, that Credit Suisse had an account for me

17 taking care of the £33,000 that was invested and

18 Chunga is a name that has been haunting my mind but

19 I don't know of anybody that has any money in Chunga

20 except myself, but there may have been, I don't

21 know.

22 221 Q. The document from which you were able to ascertain

23 that £138,000, may we please have a copy of that

24 document specifically?

25 A. I am very stupid now and I should be able to tell

26 you where it came from, but I am sure it is there.

27 222 Q. May we please have a copy of it?

28 A. Yes.

29 223 Q. Thank you. You explained to us that in the early

 1 1990's Credit Suisse became disenchanted with the

2 management of your portfolio of investments,

3 disenchanted, presumably, with the way it was being

4 managed and moved to Goodbodys.

5 A. May I comment on that?

6 224 Q. Yes.

7 A. I didn't say, with the greatest of respect to you,

8 that they had become disenchanted, but it could be

9 an explanation, it is a possible explanation but

10 they didn't tell me they were doing it until it was

11 done and they never came to me and said, 'they are

12 not doing very well, we better go somewhere else.

13 We have gone to Goodbodys.' They did go to

14 Goodbodys without telling me, but I don't remember

15 them saying, 'your investments are not being looked

16 after properly.' I am inferring that they wouldn't

17 move, like you probably are, with the greatest of

18 respect, but they would hardly move if they were

19 selling them.

20 225 Q. Disenchanted was my interpretation of what I thought

21 was going on. You did not say that. It was really

22 the period up to that point that I was interested in

23 because you had an interest in Chunga and you also

24 had an interest in Garenne and over the period

25 College Trustees were managing the value of those

26 funds. I would like to understand a bit more about

27 that process, if I may. For instance, you obtained

28 from them periodic statements of your investment at

29 your request.

37
 1 A. Maybe not always at my request.

2 226 Q. But you obtained periodic statements?

3 A. Yes.

4 227 Q. Those statements would have shown you a portfolio of

5 investments which might have included money on

6 deposit?

7 A. I don't know and there is no point in me saying I do

8 when I don't know what they included. It is too

9 long ago, I can't remember.

10 228 Q. Mr. McCarthy, might there have been some money on

11 deposit?

12 A. You mean cash?

13 229 Q. Money on deposit, yes, a deposit account?

14 A. Anybody in the room could say yes or no, I honestly

15 don't remember.

16 230 Q. Might there have been details of some equities in

17 gilts which you mentioned?

18 A. I would imagine so, yes.

19 231 Q. Might there have been a holding of shares in

20 non-publicly quoted companies?

21 A. I wouldn't think so.

22 232 Q. Might there have been balances held in other

23 currencies?

24 A. I can't remember, but I don't think so.

25 233 Q. Essentially what you can remember is that there were

26 investments, inequities or gilts?

27 A. I am not saying that is the full extent but that is

28 what I can remember.

29 234 Q. If you can remember that, may I enquire did you have

38
 1 periodic discussions with College Trustees about

2 what equities or gilts your holdings should be held

3 in?

4 A. I never met College Trustees and I never had any

5 discussions with College Trustees.

6 235 Q. Let me ask you a more open question then; who was it

7 who decided what your fund should be invested in?

8 A. I would say the people in Guinness & Mahon.

9 236 Q. The people in Guinness & Mahon?

10 A. Yes .

11 237 Q. Guinness & Mahon where?

12 A. In Dublin.

13 238 Q. In Dublin?

14 A. That is my impression.

15 239 Q. So the people in Guinness & Mahon Dublin decided

16 what investments would be bought or sold?

17 A. To the best of my recollection.

18 240 Q. You were perfectly comfortable with this

19 arrangement, it worked well from your point of view?

20 A. I wasn't focusing my whole mind on this investment,

21 maybe I should have been but I had a lot of things,

22 I took on far too much in those times. To ask me

23 was I satisfied or was I not satisfied -- I mean I

24 am 27 years out of it, I can't really remember.

25 241 Q. I appreciate that a lot of detail slips from one's

26 mind, but I am sort of asking you

27 .... (INTERJECTION) .

28 A. I am not trying to be difficult.

29 242 Q. No, no, I appreciate that. I am sort of asking you

 1 for impressions that you have because quite clearly

2 you had a sizeable sum of money with Guinness &

3 Mahon and if that had been diminishing in value,

4 presumably you would have observed that?

5 A. As you know much better than I would know, markets

6 go up and down and have gone up and down over the

7 years, so I would be aware of that and that would

8 have a consequence on the value of any portfolio.

9 243 Q. It was likely that some shares did well and some

10 shares did not do so well in the ordinary course of

11 equity investment?

12 A. Yes.

13 244 Q. If there were investment gains made on occasion, how

14 were those dealt with from a taxation point of view?

15 A. They weren't taken out of the fund because they went

16 up. The only reason that I looked for any cash was

17 around the Christmas time and that is a general

18 statement. It wasn't triggered off by a fund going

19 up or down.

20 245 Q. I am conscious, Mr. McCarthy, that it is past

21 1 o'clock and I know we all need to get some

22 refreshment. Just one final question; did you make

23 any returns to the Revenue Commissioners in respect

24 of any interest that you may have earned over the

25 years on this fund that you had in Guernsey?

26 A. The Revenue are aware, fully aware of the whole

27 situation. The quick answer is that I didn't.

28 246 Q. You did not make any returns but you have since been

29 dealing with the Revenue?

40
 2 247 Q. On the matter?

3 A. Yes.

4 MR. ROWAN: Alright. Mr. McCarthy,

5 thank you very much indeed

6 for coming in to answer questions today. The

7 questions and answers will be transcribed and

8 Ms. Cummins will be in touch with you in due course

9 about getting you to come back in to sign a copy of

10 that transcript.

11 A. Right.

12 MR. ROWAN: Ms. Cummins will have a

13 brief conversation with

14 you on your way out about the documents which we

15 have discussed with you this morning and which we

16 hope you will be able to provide us with in due

17 course.

18 MR. 0'GRADY: May I just clarify what

19 you require in that

20 regard, essentially you have told Mr. McCarthy that

21 College Trustees managed his fund, so to that extent

22 ....(INTERJECTION).

23 MS. MACKEY: No, we have not told

24 Mr. McCarthy that College

25 Trustees managed his fund. We have told

26 Mr. McCarthy and yourself the connection between

27 College Trustees and Guinness Mahon Cayman Trust.

28 MR. 0'GRADY: We did identify in the

29 statement that we were

41
 1 told there were some payments and I am not sure

2 whether it was yourself or Mr. Rowan who said

3 something to that effect or put it to Mr. McCarthy

4 that College Trustees managed his investment.

5 MS. MACKEY: We asked you if College

6 Trustees did. Essentially

7 what we are looking for from Mr. McCarthy,

8 Mr. 0'Grady, are any documents he has in connection

9 with his original investment made in what he

10 understood to be Credit Suisse but which would

11 appear it would seem to be College Trustees.

12 A. Not to my knowledge.

13 MS. MACKEY: Not to you knowledge. In

14 any event, whatever he has

15 in connection with that investment to Credit Suisse,

16 anything he has in connection with the Garenne Trust

17 and any documents which were the basis of that note

18 that he prepared today for our interview and which

19 he has read.

20 MR. 0'GRADY: I suspect in fairness to

21 him that the document may

22 have been, and I am speculating, but may have been

23 prepared from correspondence with the Revenue and

24 not from original documentation.

25 A. Yes.

26 248 Q. MS. MACKEY: Presumably the

27 correspondence for the

28 Revenue was prepared from something else.

29 MR. 0'GRADY: There may well be, I

42
 1 simply do not know.

2 Presumably you do not require our file in relation

3 to correspondence to and from the Revenue?

4 MR. ROWAN: I think our difficulty is

5 that we learned from

6 Mr. McCarthy in response to our questions, we

7 learned some information this morning. That

8 information was available from some other source.

9 If that source was a document and we believe it was

10 applicable to the purpose of our interview today,

11 then we would like a copy of that document. We do

12 not exactly know what the documents are and you will

13 have to ascertain that with your client.

14 MR. 0'GRADY: I would simply like to

15 make the point as well

16 that the connection between College Trustees is not

17 something that Mr. McCarthy would have been aware

18 of.

19 MS. MACKEY: We appreciate that totally

20 and we are not in any way

21 making a criticism of Mr. McCarthy for not providing

22 this information to us, not at all, and we would not

23 like you to think that. We are simply clarifying

24 with you now, now that we have a broader picture, of

25 what it is we would like. Basically what we want is

26 the basis on which he prepared those notes and gave

27 us some information that he has jotted down there

28 today. For example, as Mr. Rowan said earlier, he

29 was able to indicate that the sole asset of Chunga

43
 1 was a sum of £138,000 and that information came from

2 somewhere.

3 MR. 0'GRADY: It was a loan of

4 £138,000.

5 MS. MACKEY: That information is

6 somewhere that we have not

7 seen yet, so that is the kind of thing that we are

8 looking for. Anything in relation to Garenne,

9 anything in relation to Chunga and anything in

10 relation to the investment with Credit Suisse in

11 Mr. McCarthy's possession or power is basically what

12 we are looking for.

13 MR. ROWAN: I think also we are

14 dealing with

15 Mr. McCarthy's recollection and it is a long time

16 ago and we fully understand that, but we also know

17 from other aspects of our investigation that Credit

18 Suisse became involved at a particular time with

19 Guernsey and the transition from Guinness Mahon

20 Cayman Trust to Credit Suisse and so on all have

21 time scales on them.

22 MR. 0'GRADY: Again you are saying the

23 transition from Guinness

24 Mahon Cayman Trust, that is something of which we

25 are not aware. We have been informed by Guinness &

26 Mahon that there were payments into this account,

27 this Guinness Mahon Cayman Trust account from

28 Chunga. You are inferring that Guinness Mahon

29 Cayman Trust managed the ....(INTERJECTION).

44
 1 MS. MACKEY: We are not inferring

2 anything.

3 MR. 0'GRADY: When you said the

4 transition from Guinness

5 Mahon Cayman Trust -- I am really trying to

6 ascertain precisely what you require and that is why

7 I am asking this.

8 MS. MACKEY: What we require is

9 precisely what I have

10 said. We can leave aside all inferences or what may

11 have transmogrified into what. We need anything you

12 have on Chunga, anything you have on Garenne, and it

13 is quite specific, and anything you have on the

14 investment with Credit Suisse. Those three aspects,

15 any documents referring or relating to those three

16 aspects.

17 MR. 0'GRADY: Okay, thank you.

18 A. I would just like to thank you for your kindness.

19 MS. MACKEY: Thank you, Mr. McCarthy.

20

21 END OF INTERVIEW

22

23

24

25

26

27

28

29

45
SoVJUxtor

2% p^VKSt tflOOO
 IN THE COMPANIES ACT, 1963-1999
AND IN THE MATTER PART H OF THE COMPANIES ACT, 1990
AND SECTIONS 8 AND 17
AND IN THE MATTER OF ANSBACHER (CAYMAN) LIMITED
(FORMERLY GUINNESS MAHON CAYMAN TRUST LIMITED, ANSBACHER LIMITED
AND CAYMAN INTERNATIONAL RANK AND TRUST COMPANY LIMITED)

STATEMENT OF DENIS McCARTHY

A. By undated letterreceivedfay me on 14 April 2000 (die "Inspectors' Letter") addressed to

me and signed by the three inspectors (the "Inspectors") appointed by the High Court to
Ansbacher (Cayman) Limited (the "Company") I have beenrequestedto provide as
unsworn statement inrelationto the matters set out in appendix C ("Appendix C") to the
Inspectors' Letter.

B. I have never to die best of my knowledge knowingly had any dealings with the Company
and had never even heard of the Company until in recent times I saw references to it in die
newspapers.

C. Because I have not, to the best of my knowledge, had any dealings with the Company, I do
not have any books or documents in my custody or power relating to die Company.

D. I have in the past had dealings with Guinness & Mahon (Ireland) Limited (die "Bank").

E. By letter dated 17 November 1999 die Bank indicated to me that I might be a person who
could be affected by the terms of High Court orders dated 13 September 1999 and 11
November 1999 (copies of which I attach). By further letter dated 6 December 1999 the
Bank indicated to me that I might be a person affected by the direction of the Inspectors
contained in a letter dated 24 November 1999from the Inspectors to fee Bank (copy of
which is attached). As I had never, to the best of my knowledge, had any dealings with the
Company, I passed the said letter dated 17 November 1999 on to ray solicitors, who
telephonedfee Bank to seek an explanationfor the Bank's opinion that I might be a person
who could be affected by die terms of High Court orders dated 13 September 1999 and 11
 November 1999. The Bank informed raysolicitors that there was an Ansbacher account
which was entitled Re College Trustees in which was listed payments to certain offshore
entities, including payments to a Guernsey incorporated company named Chunga in which
Mr Des Traynor, on behalf of the Bank, had invested some monies belonging to me in 1973.
My solicitors were informed that there were three references to Chunga in the account,
which, the Bank said, appeared to be references tofees in respect of company formation
services and annual administration fees. The Bank-indicated that the monies involved were
very small and that they were notifying me merely as a precaution.

F. I haverequestedthe Bank toftirniah me with copies of all documents in their possession

relevant to die matters outlined above. I do not have any documentation relevant to the
payments from the Ansbacher account entitled Re College Trustees in my possession. I
intend toforward any documentationftirnished t^ die Bank to me in relation to the matters
outlined above to the Inspectors.

G. I am willing to attend before die Inspectors for die purpose of being examined inrelationto
any information contained in this statement or in any docnments which I may be in a
position toforward to the inspectors upon receiving a replyfrom the Bank.

H. Regarding the matters set out in Appendix C, the position is,to the best of my knowledge,
and, subject to my comments in paragraphs^and /above (which comments represent die
totality of my knowledge of die matters upon which I have commented), as follows (in the
same numerical order as the items referred to in the Appendix C) :-

1. I did not cause to be executed a deed of trust or other instrument in the Cayman
Islands or elsewhere whereby the Company or some other person associated with it
or acting at its direction was a trustee or managed a trust, nor did I transfer monies
or other assets to any such trust, nor did I cause to be established in the Cayman
Islands a body corporate to which I caused to be assigned money or other assets
which were managed by the Company or some other person associated with it or
acting at its direcdon.

2. I did not avail of die service or of a service of a similar type offered by the
Company to that outlined in paragraph 2 to Appendix C.

O A
 3. I did not avail of die service or of a service of a similar type offered by the
Company to that outlined in paragraph 3 to Appendix C.

4. I did not avail of the service offered by die Company outlined in paragraph 4 to
Appendix C.

5. I did not avail of tbe service offered by die Company outlined in paragraph 5 to
Appendix C.

6. As I did not avail of any services provided by die Company, tbe issue of whether or
not I or someone on my behalf applied under die Exchange Control Acts for
permission in relation to any such transaction does not arise.

7. I did not avail of the service offered by the Company outlined in paragraph 7 to
Appendix C.

8. No company or trust in which I had a direct or indirect interest or which was

directly or indirectly controlled by me or whose income or part of whose income I
had power to enjoy had any dealings with die Company.

Signed: DENIS MCCARTHY

1 ^day of 2000.

M:\Brownem\TOG\McCtrtfay.doc

« r—
Appendix XV (152) (l)(c)
 .IT,

BANKERS* GUINNESS+I
ACCOUNT GHCT /COLLEGE SUNDRY SUU CO 17 College Green Dublin 2 P.O. BotO
•» .••
NAME

Pp CURRENCY STtRLlNG ACCOUNT NUMBER

LEDGER
ACCOUNT fcXTERNAL
DESCRIPTION STATEMENT DATE
ft i

PARTICULARS VALUE: D A T E DEBIT CREDIT

D A T £
T ; .

1,1)00.Qljj
Appendix XV (152) (1) (d)
 fctVM
UNCUS <M«T CHttM'M* 7W44
1,1, HUill MMMrMMMf H7Ji/B.W4i

LEDGER
(K1IMM. (Hk
»(M»IT •ttrwnf MI lomvil
it It

•II IS

• II •t

O 4
Appendix XV (152) (1) (e)
X. Definitions.
2. B » Proper taw including Power to change such
Iw.
3. T n i t i fox Mia and l a w t M t .
4. Tiuata of laooaa and capital.
5. Powers aa to payaaota to charttlaa.
Si Pomucb of appolntamt and idwMMBt.
7. Fowera to exclude and iaclnds Beneflolarias.
B. Payaanta fear the baooflt of ataora.

of fxuit property and Powav fox Vfeootaoo

to d u r g i faea and to pay ( d m .
10. Power to f a n BI^I«1«» and other aetltiaa.
11. Power not to interfere la aanageatnt.
12. m m c to i i t a loans.
13. h w u i to aall, laaaa and exchange, to
voti Mid ( I w proxies.
14. f o m n relating t o Chattels.
15. eaaaral prorisiona relating to tha exercise
of Powers.
16. m m to w ; the y a w n k m v t e .
17. U a l t t t l M as to twaawi— of Powers.
18. AppolllL—UL of M I k n t l M .
19. Tnd—nl fl catlco of Mtlxiag Truateea.
20. General ladanity of Trustees.
21. I m i a l o w aa t o discloaure of lafoxaation.
22. Maaa
23. Vewur to eh«t* mm.
24. Irrevocability of SattiLwe*.
Bchadulas
1. Initial Sattlad Property. :
2. Pixst aaia Beiteficlariaa.
3. Kxcludad paxaona.
T H I S D I C L k l t T I O l OF T R U S T is sad* the
F**r d«y of I^cmmma one Thousand Nine Bundred

and £>tf*rr

a *

COLLEGE TRUSTEES LZMZRD of St. Julian's Court, St. Julia's

Avenua, St. Patar Port, Guernsey (hereinafter called "the
Trustees").
1 0 1 T i l l D S S S I K I I I I I f l aa fbUcMat-

1. In thia Settlement itemir the context permits the following

worts have tha fallowing aaaniagai- .
(a) "tha Beneficiaries" asana and Includes all and aay of tha
persons naasd ok described la the aeoood schedule hereto.
Za determining whether or not a paston la cm of tha
Beneflcl arias a« adopted or legitimated person ahall be
treated aa a child of hia adoptive as legltlmetlve parent
aa tha case My ba and of no othax person and ntonaw
to tba issue.of aagr person ahall inoludi tha children
and raaotar laana at such person through all dagraaai
Ob) "Excluded Persons" aaana «>d'includes all and any of tha
persons naaad oc described la tha third achadwla haratoi
<o) "Charity" shall man any trot* foundation, conpaur « •
other hod/ (corporate «f unlnooxporate) established
exclusively far purposes recognised as charitable fey
. tha lava of tba Island of Jersay and the word "ebaritsble"
ahall ba construsd accordinglyi
(d) "Minor" wherever tba wort shall appear la this Sattlaaant
and only aa far aa It shall appear shall m m any Individual
who has net attained the age of twenty-ana notwithstanding
• that such individual vy by and la accordance with tha law
of his ok bar domicile ba of fall age, and tha obsession
•>*»n aga" "''"'I ba ocnstxusd aooordlaglyi
(a) • "hnoa* lncludsa aay individual or any body of persona
oorporafca or unIncorporate i
(f). "Tha Trustees" ahall aaan tba Trwstaa or sruataaa for tha
tins being hereofi
<g) "Trust Fund" asanat-
(&) tha sua of money mentlooadla tha first icheAile
heretoi
 <11) all M M y , investaents and property paid or cranafarrad to
and aecaptad by tha Trustees aa additions to tha Txuat fundi
and
(111) tba inveataenta and property froa tiaa to tiaa rspraaentlng
such aaoay, inveataeats and additions or any parts thereof,
(h) "9a Trust Period" shall aaan tha period fro* tha data hereof until
whichever of tba following days shall occur first aaoaly i-
(I) tha day cn which shall expire the period of eighty years
after tha execution of this Settlement;
(II) aoch day (if any) aa .the Tim f a nay at their discretion
appoint by deed eaecnted prior to tha day specified la
paragraph (1) of this svfe-elauaai
(ill) the day of expiration of twenty-one years after the death of
tha laat survivor of the Beneficiaries being parsons living
at tha dato hereof wan thou^i audi Xeneflciexy aagr not k m
bean a Beneficiary at the tins of tha execution hereof i
(1) "Property" shall aaan nd include any Heal or Personal Property
wharvaoever situate and any rl0ita or Interest legal, equitable or
otherwise in or over such property as aforesaid.
(j) words importing tha naaeoliaa gander ahall include the feminine
gander.
(k) words la the singular shall tnclwdi tha plural and words la tin
plural shall inolude the singular,
this fettle—nt is established mdar and la accordance with the loss of
the Island of Ooanaay and tha rl^ita of all parties and the ooostraction
and affeot of each and every provision hereof shall be nkjtet to tba
exclusive jurisdiction of and oooa trued and regulated only according to
tha lavs of tha said Island which shall be thatonxifor tha aUalatro-
tion hereof save only that notwithstanding tha foregoing provisioais of
this clause tha True tees a hall haws tba power at their discretion to
declare by Instrument la writing or by Deed whichever M y be applicable
according to tha Proper Law of this 8etfTenant (which axprasalon shall
nean tha 1m of' Ouernaey or of such other state or territory as aay have
been fron tiaa to tine declared by the Truatees In aasrolaa of tba powera
conferred by this clause) fron tiaa to tlas executed within tha Trust
period, that this Settlement shall thance forth take effect in accordance
with the law of aoa* other state or territory in any part of Ilia world
(not being a plaoe under the law of which (1) any of tha Trusts, Powers
and Provisions heroin declared and contained would not be oaforosabla or
capable of being exercised and m taking effect or (11) this •ettleaaot
would be capable of being revoked) and tha forun of administration ah all
thenceforth be the Courts of that state- or territory and tha law of that
state or territory ahall thancaforth ba applicable to this Sattlaaant
and fvuetheraora tha Truataaa shall have power to sake such conaaquential
altarationa or additions to this SetUeasnt to ensura that tha Trusts,
Powers and Provisions hereof shall (autatla sutandia) be es valid and
affective aa thay are undar tha law of Guernsey which expression herein
shall as an tha law of Guernsey or of auch other stata or territory as
•ay have been froa tiaa to tias dsclared by tba Trustaea in aaarclae of
tha pcMera conferredtoythis clause.
the Truataaa ahall stand possessed of tha Trust Fund Ifcon Trust aa to
investsanta or property other than aooey In their abeolute dlscratian
either to pexalt tha sane to reaala aa invested or to sell or convert
into acnsy all or any of such investasnts and Open Trust aa to aonay
with tha like discretion to invest tha s«as in their naaaa or under their
control in asy of tha investaenta hereinafter authorised with power at
tba lika discretion froa tiaa to tias to vary or tranapoae say such
investments for others of a nature hereby authorised.
The Truataaa shall atand poeeeaaed of tha Trust yuad and ahall apply tha
lnooaa tharefroa during tha Trust Period la such Banner and la soch
amounts for the benefit of «jy ons or all of the Banafialarlee as they
Shall la their absolute discretion think fit sad tha Trustees without
prejudice to tha foregoing provision ahall have power to aconsulate such
lnooae as they sea fit for the as-rtana period peradttad by tha Law of tha'
Island of Guernsey and any laoeae accusalatad aa aforeaald ahall fora
part of tha capital of the Trust and at tha eviration of tha Trust
Period QPCM pUBT aa to both capital and laoeae of tha Truet Pund for
all or such one or aora exclusive of tha other or others of tha
Beneficiaries in such shams and proportions If aors thai one sad
ganarally la auch awmar aa tba Truataaa shall then la their Aaolnts
discretion deteraiaa and la default of and Subject to such dsterainatiaa
WON ntar in -equal shares absolutely tax epch of tha Beneficiazi.es aa
shall than ba living ox sxistingi PROVZOB B W bp Beaafioiary nor all
of thaa in ocafelnatloa ahall have any tight of any kind as agalaat tha
Truataaa or tha Truet Pund or any other person or body of persons by
virtue only of being Beneficlaxiea any rule of law, equity or otherwise
to the contrary notwithstanding., in tha-event of tba failure or
determination of tha Trusts in this clause hereinbefore contained and
subject thereto and to tha provisions of these presents and to tha
Pmers hereby or by lax conferred on tha' Truataaa and to any and every
exercise of such Powers and In the event of no additional Beneficiaries
being sppolntad by the Trustees in exercise of their Powara herein
conferred prior to the eiqpiratiea of the Truet Period the Trustees shall
hold tha Trust Pund upon tha following Ttuatai-
(a) Mrlng tha Trust Period aa to any InCOM of tha Truet Fund accruing
during audi period UPON ntoBT to pay or apply tha aaaa to or far
auch charitable Inatltotlao or institutions or othar charitable
object orflbjeetaaa the Trustees shall in tholr absolute
discretion select and In such proportions if sore than one and
generally In such manner as the Trustees shall in their like
discretion determine i
Q>) At the expiration of tha Truat Period OMR flOR aa to both oapltal
and laccan of the Truat I M for such charitable object or objects
and If aore than one in such shares as the Truataee shall in tholr
absolute discretion determine i and
(o) In default of tha exercise of any Power or discretion under this
elanaa and la tha event of the failure or determination of the
other Trusts hereinbefore orwitn Inert QPGM TMXT for the Jersey rand
far Pllnd aiildren abeolutely.
notwithstanding tha Truata and Powers hereinbefore daolared aad coata1 nod
tha Trustees ahall have power eaardafela la their abeolute discretion
at any tlas or tlaaa prior to the taraisetion of the * m t Period to pay
or apply any part of tha capital or law— of the m a t Pund to or for
auch charitable Institution or inatitotlana or othar diaxltable abject
or objects aa tha Trustees shall la tholr absoluta discretion select and
in such proportions if more than one aad generally suoh Banner as the
Truataea Shall la thair Ilka dlacxation think fit and the receipt la
writing of the Treasurer or othar oftloar of any particular charitable
institution authorised to glee receipts for aonoys paid to that
Institution shall be a aoffloloat discharge to tha Ti as tees for any
pqamt paid to such institution hereunder.
Notwithstanding tha Truata and provisions hereinbefore da dared sad
contained the Truataea auw at tagr tiaa or tlaas ddring the snot Period
if la' thair absoluta discretion they ahall so think fit by " T
Znatrunent or Instruments la writing ortoyDeed or Deads tfcicharter may
be applicable aooordlag to tha proper 1m of this •ettleaaot rawooabla
during the Trust Period or irrevocable appoint such m» or ether Trusts
Powers and provislo^govoriiod by thalMbf ainyv«rt-*»f-tha-world of
and oonoemtng the Trust Tm/A or any part or parts thereof for the
benefit of the Beneficiaries or any one or more of them exoluelve of
the other or others at such age or tiaa or respective ogee or times
aad in auch shares and proportions aad avbjeet to such taxas and
limitations and with and subject to auch powers of appointment vested .
la any parson or persons and such provisions for maintenance education
or advanceaont or for accumulation of in COM during minority or for tha
puxpoee of raising s ana or suas of capital or for forfsitura in tha
avant of dssastra, insolvency or bnlmftejr as say ba applicable
according to tha proper law of this Settleasnt and otherwise at tha
discretion of any parson or persons -and with soch discretionary Trusts
and PcMers exercisable by such persona and gaaarally in such nanaar as
tha Truataes nay think fit for tha benefit of such Beneficiaries or any
ana or acre of thea aa sfonssid sad for the pmt|iose of giving effect to
any such appolntaaat by the seat Instrument in writing or Used whichever
•ay bji applicable according to tha proper law of this Sattlaaent revoka
all or any of tha Trusts Powers and provisions herein cxmtial ned with
respect to the Trust Fund or the part or parta' thereof to which audi
appointoasnt ralataa and so that in tha avaat of any audi appoiataant tha
Trnateee shall thanoa forward hold the-Truet Fund or the part or parts
thereof to which such appoint—it relates1 span with and si&ject to the
Truats Pcwsra and provisions so appointed la institution for aqr of the
Trusts Powsra sad provialaas hereof so revoked as aforesaid aid la
priority to the othar Truate towers and provisions hsrala declared aad
contained and. la aay qfpoiatasat under tha foregoing Power tha Truataaa
aay delegate te aay parson or persons all or any of the Powsra and
diacretieaa by this Sattlaaent or by law wriitsd la tha Trustaee.
Notwithstanding the Trusts, Powers sad provisions bsrein declared and
contained tha ttuataea shall have the following Powers emaroisabla
during the Trust Period, that Is to say the Power to eaoluda say persons
or elasa of persona froa the claas of Beneflciarlea hareof aad the
Power to Include any persons or claas of parsons In tha claas of
Beaeficiariee hereof and theae -Powers shall be easrcissbla in such a
way as to exclude a person previously inelndsd by tba exercise of these
Powers or -to include a person previously excluded feytha aaerclaa thereof
without limitation ss to tha audser of tlaes' which a person aay.be so
included sir eaeludsd. aotwithatending anything contained la thia Clause
or la this •ettleaant, la no elrcuuetaaosa ahall any IvnXnrtort Peracn ba
peralttad to be a Bansflclaqr.
Mhere tha Tx us Usee are authorlaed oar required to apply aay laaaas
or capital of the Trust Pund to or for tha benefit of aay person who la
a minor tha Trustees aay in their abeoluta discretion either pqr tba
aaae to him or bar aa his or bar abeoluta property notwithstanding that
he or she is a minor and tha raoslpt of any such alaor Beneficiary if
peralttad by the proper la* of this Ssttleaant shall be a good discharge
' to the Trustees therefor or pay tha aaaa to any paraat or guardian of
such alaor without seeing to the application thareof aad the receipt of
audi paraat or guardian shall be sufficient discharge to tha Trustees
far any laeeat or capital so paid or applied.
9. thm Truataea ahall ham tha following Powers i-
(a) TO invest or otherwise dlapoaa of or deal with tha Trust Pond and
to exercise their dlaocetloo over the sua aa if they wore ebsolute
henafleial ownera and the following clauses hhall not derogate from
the general Fowars conferred by this clausei
(b) TO oaa tha Tnaat laid in any way whatsoever according to tholr
atoaolute discretion aa thoutft they wore abeolute beoafielal ownera
eid notwithstanding any ruloof law at equity or otherwise to tha
contrary and without prejudloe to the generality of the foregoing
provision ahall have Power to acquire aay property whatsoever even
thou£> such property shall yield no laooaa and even though such
property bo a wasting asset and avea thou^t aocb property ahall be
of benefit to one or sore of tha Panaflelarieo hereof only to the
exclusion of the othar Beneflalerlos hexeofi the provlsleas of
this s«b-clause shall apply to say lavas tosnt or disposal of or
any ether dealing with any of the Trust Fund aad any restriction or
limitation t Rinsed by any rule of law or equity or-otherwise ahall
accordingly bo inapplicable hereto.
(c) *» borrow aoney or give or enter Into guarantaeo oo the security of
the Trust Pood with power to chsrge any part of tha capital or
laooaa (including any future Inoaasl of tha Trust nod with the
sopayasat of say aoneys .so borrowed or guaranteed aad to pay or
apply the aoney ao raised in say Master la whldi aoney forming part
of the capital of the Trust Fund aay be paid or applied and ao that
tha fruataoa shall have power to enter into any joint borrowing
arrangoasats with any parson and whether or not Involving' joint
or several liability and no purchaser laadar or ether person
paying or advancing aoney en a sale aortgage dkarge or other
transaction purporting to be aads by the Trastsos under or for aay
of tha purposes of this Settloaaat shall be concerned to see that
the aoney is wanted or that ao aero than la wanted Is raised or
otherwise as to the propriety of tha transaction or the application
of tha aoney.
(d) Further and without any prejudice to the generality of tba foregoing
provisions the Trustees shall be ogtmlf authorised hereby to
delegate any or oil of their duties or Powers undar this •ottlinint
to any person whatsoever without liability for loss and if such
person shall bo acting la the coarse of hla trade, profession or
vocation ha ahall bo ontltlad to proper reauneratlen out of tha
Trust Fund.
(e) Any Trustee heraof who is a corporation shall bo entitled to
remuneration for acting aa a Trustee hereof in accordance with its
scale of charges as published froa tiaa to tiaa if any or la tha
 abaence of audi pdbliahed acala aa aforaaald ahall ha an titlad to
raaaonahla remuneration tor so acting and any Trustee who Is a
profaaaianal person of any description shall ba antltlad to proper
rsauneratlcn for work undertaken in his capacity aa a profaaaianal
parson oat of tha Trust rund (either capital or Inooaa) and any
Trustee 'hereof ahall ba antltlad to proper remuneration for acting
la tha capacity of Trustee hereof out of the Trust find (either
wpital or lacoaa).
(f) 9m Tina Usee shall have Power to pmy aay dutlee and taxes for which
they nay be c o b s liable In any part of the world notwithstanding that
aucta liability aa aforesaid M y not be enforceable throu^i tba
Courta of the Island of (hwraaay or of audi other territory as mmj
have becoma tha fopm fear tha adalnlatratlon hereof by virtue of
tha eaarciaa by the gaeuataaa of their towers in that regard uadar
cIsbso 3 hereof.
(g) the Truateea shall not ba liable in respect of aay purported ewercise
of any dntiss or towers oadar this Crust save only that If they have
noted fraudulently they ahall not ba entitled to tha protection
conferred hereby.
(h) ihe Sruataea aay antar into1 any venture which they believe tobe of
benefit to tha Trust notwithstanding that ohs' or aore of tba Truataaa
(or if a corporation aay of tha offloara of tba
corporation) are
personally interested In such vantun.
(1) Tbe Trustees hereof aay invest any or all of tha Trust Pund la 'any
sharas, stocks, bonds, debentures of a Ceqpany la which they are
interested directly, or Indirectly, or whidi la interested la thaa
either directly or Indirectly, said tba True tees aay Invest any or
all of tha Ttuat Pund in aay Halt or Investment Trust or Pwd la
which they are lntaraated or which la managed by thaa notwithstanding
say rul* of law or equity or othexwlae to the coatrary.
The Truateee are ewraaaly authorieed hereby to fan any entity or
aasodatlcn incorporated or unincorporated in any part of tba world for
tha parpoaa of Investmsnt or far tha purpoaa of carrying-en trade with
the m a t property and la tba u a i d N ot tha foregoing power the
Trustses shall act la auch a manner aa thay ahall sea fit In their
absolute discrstlon.
Motwlthatandlag aay role of law or equity or otharwlae to tha contrary
the Truetses ahall not ba bound to concern theaselves in any way
lAatsoavar la tba management or conduct of tha investment or buslaass of
any such entity or aasodatlcn as aforaaald unleaa aad until tha Truataaa
ahall have notlca of any act of diahonaaty or niafaaaance on tba part of
any of tha managers or parsons la control of any audi entity or
 aasodatlon aa aforesaid.
12. Ths Trustaoa ahall harm Power at their abaolute discretion to land tha
whole or any part "of the Truat Fund to any persona whether a Beneficiary
or not vsider the Sroat hereby declared with or without security and iqxn
audi tarns as to repayment and lntaraat or intarast free an tha TTustsos
nay in tholr discretion think fit but ao that no auch loan shall be
on tome that repsynsat ahall be poatponod beyond tha Trust Period.
13. The Trustees Shall have the following additional Powers, namely t-
(1) To sell lease and exchange any property which nay at an
constitute tha wbole or any part of the Trust Fund either at public
auction or by private treaty for such conaideraticn and an such
. terns as tha Truataea daaa adviaable and whether fear the purposes
of reinvestment distribution or division and to make such oontxacts
and enter into "such iwrtartaHnga relating to the Truat tad or to
any of it as this True tees in their moon trolled dlacretion ccaisldar
advantagaoos to the Trust whether or net such leases contracts or
ondart akings extend or aay eatand beyond tha Trust Period.
(2) With respect to any property constituting the whole or part of tha
Trust Fund to osorciae all Powers which an Individual owner aijht &
s
aaerotae without being restricted in aay way by tha offlee of
Trustee Including (without hereby Hotting the foregoing'wide Power
or any general Power' herein contained) i-
<a) voting upon or la respect of any aharae so curt trios bond
notss or other evidence of intarast la or dbligatione of
any corporation truat association or pen earn whether car not
affecting the security or the apparent aecudty of the Truat
property or the purthaae or leaae of the assets 'of any such
corporation truat association or oonoasai
(b) giving proxies or Powers of Attorney with or without Powers
of substitution for votlag or eotlag on behalf of tha
r* Trustaaa as the-ownera of any such property.
14. Mheie.tho Crust Fund includes any chattels the Trustees shall have power
to lend let or hire any of such chattels to aay persca (whether or not
being a person interestsd hereunder) either gratuitously or for sa«h
consideration and qpen. auch terms aad for such periods es-the-Trustees
aay in thsir 'discretion think fit and Where eny chattels era lentl 1st
or hired to any other person or any other peraon is lawfully permitted
to use and enjoy any chattsls- in specie the Troatsss shall not bo
responsible for say loaa incurred through any damage to the ansa eauaed
by or through any aala car conversion thereof Bade by such person or
otherwise incurred through any neglect or default of each person,
(a) The Trustees ahall exercisa the Powers and discretions vested in
theai as they ahall think aoat obedient for the benefit of all or
 any of the para an* actually or prospectively interested under this
Settlement and nay exercise (or refrain froa exercising) any Power
or dlacration for tha benefit of any one or sore of then without
being obliged to oonaldsr the Internet of tha others or other.
(b) Sriiject to tha previous sob-clause every discretion vested in tha
Truataaa shall ba absolute aid mcontrolled and every Power veeted
in than ahall be exercisable at their absolute and 'im controlled
discretion and the Truataaa ahall have the ssaa diacratian In
deciding whether or not to exercise aay audi Power.
(c) MO Trustee hereof or director or other officer of aay corporation
which la a Trustee hereof ahall ba liable to accountforany
remuneration or other profit received by his la consequence of his
acting aa or being appointed to be a director or other officer or
servent of say oeapany tmn thou0t his appointmant was procured by
en emercies by him or by. the True tees of voting rl0ita attached to
aacurltlca in the Truet Pund 6r Ipy an abstention froa asercl aing
auah voting rights.
M . The Truataaa ahall have Power at aay tiaa or tlaae by Xaatxuaant or
Instruments in'writing or Deed or'Deeds aa appllMbla aocordlag to tba
prcper law of this Settlament revocable daring tba Tkuat Period or
irrevocable to give op or restrict aay Power hereby or by law conferred
en thaa notwithstanding tha fiduciary nature of any such Power.
17. Despite anything contained alaewhatra In thia Settlement no discretion or
Power conferred by this Instrument la writing or Bead aa asy ba
applicable according to tbe proper law of this iettlsasnt on tha Trustees
or on aay person shall ba eaerolaabla after tha ejqplraticn of tba trust
Period, sor ahall auch discretion or Power aa aforaaald ba aaarcissd la
any waye aa to infringe aay rale' agalaat pexpetoltiee.
It. (a) Tha Power to appoint aaw or additional Truateee hereof shall saat

hereof Tasatnlnp tha aforaaald Power shall seat la the Parscaal

Bapxaeentatlvaa of tba last True tee hereof.
(b) if amy Trustee hereof shall at aay timadeslre bo withdraw aad be
dia charged froa the Trusts hereof the aald Truatae asy do so by
notice in writing to tha remaining Truataaa or If the only Ttuataa
hereof at the aaterial tiaa is the Truataa who is desirous of
withdrawing tha aald Trustee ahall appoint caa or BOOT additional
Truataaa la accordance with tba previa lone of paragraph (a) of thia
clauae aad ahall than give notioa to the aald additional Trustee
or Truataaa as aforaaald.
(c) hay Trustss hereof who desires to withdraw In aooordaaoa with tba
provisions of paragraph (b) of thia clause shall prior to his
discharge frca the Trust hereof do or cause to ba doaa all such acts
 as are neoaseary for tha proper vesting of tha Truat Fund
latfi*continuing or new or additional Truataaa m the eaao aay bo.
(d) M l auch acta aad daodo aa aforaaald ahall bo dona at tha o^oaaa
of tha laooaa oar capital of tha Truat Pond W W 1 D BUT aa outgoing
Trustee who la llabla aa a Truataa hereof or who aay at tha death of
any person be llabla ao a former Trustap hereof, for any taxoa which
•ay be lapceed by the Proper Law or alsswhsre ahall not bo booad to
trana far the Trust tad unless reasonable security la provided far
indemnifying such outgoing Trustee agalnat such liability.
(0) Oa every change la the Trusteeship a mamorandna Shall be endorsed
«n or permanently annexed to this SettlMamt stating the naaea of
the Tfeustsos for tha Urns being aad shall be signed by the persons
so nanad and any person dealing with the tettleaent shall be
entitled to rely upon auch aeaausudHai (ok the lateet of audi
memoranda if MM ttaaa one) as sufficient evldsnoe that the Trustees
aeaed therein am the duly constituted Truetees for tha tiaa being
hereof.
(f) Xa tha ovoat of ao peraaa entitled under tha foregoing paragraphs of
this clause appointing a new Trustee hereof within oae nooth of the
last Trustee hereof peas lag to be a Trustee the Power to appoint one
or aore new Truataea of the Settlement shall veat in the aoet senior
practising Advocate for the tiaa being of the guernsey Bar.
19. Zf a Truataa retiree from the Trust hereof or bocnaaa by reason of
residence or place of lncorporeticn incapable of acting no a Truetee
hereof such Ti.ua too shall be raleaaad lpeo facto fsoa all claiae
rteaanrts aotiena proceediaga and accounts of aay kind on tha part of say
parson (whether in oatatonoa. or not) actually or prospectively interested
under the Sattleaaat for or in respect of the Trust Fund or the lnauaa of
tha Trust Fund or the Tiruets of this Settlement or an sot or thing done
or caittad la esacotloa or purported execution of such Trusts other than
aad except only actions i-
(1) arising frca aay fraud or fraudulent breach of Trust la which such
Trustee (or la the caaa of a corporate Trustee any of its officers)
waa a party or of which audi Trustee had knowledge i
(2) to recover frca ouch Trustee Trust property or the proceeds of Trust
property in the possession of such Trustee (or in the caaa of a
corporate Tsuatee any oflta of fleers) and converted to his use.
ao. In the execution of the Trusts aad Powers hereof no Trustee shall be
liable for any loaa to tha Truat Fund arising la consequence of the
failure depreciation or loss of any investment made la good faith or by
reason of aay act or calssicn mada in good faith or of any other matter
or thing exoept wilful and Individual fraud and "wrongdoing on tha part of
the Trustee whoa it is sought to be aada llabla.
31. Oh* Trustses ahall net except undar compulsion of law of tha
Island of Guernaay or of tha Proper Law aa defined In olsusa
2 hereof, divulge oc discloss directly or lndlzsctly to aqr
tax or fiscal authority eqy information relating to tha
Trust pund or tha Trust Bead or to tha aaaata or tha .
Beneficiaries thsrsof exempt that relating to this el sues
sad to the third schedule.
22. Thia Settlement shall hs know as Ths Oaraaaa Trust.
23. She nana of this Settlement amt be chsaged by the Trustees at.
their dlaeretlca to audt other aass or naasa aa they oanaldar
fit. 1 aoaorandoa recording each sad every change of aaae
shall be affixed to tha original trust deed.
24. This Settlement shall ba irrevocable.

Jersey (tad for Blind Children

Jersey Oxfasi a w g
Jersey midlife Pxsaervatioa Trust

"S3BJSSB5BS.
1.fegrparses who Is or is
traatad aa resident in the
lslsad.ef Ouemeey for tha
purposes of tsvatloa la
that Island.

•SAL of-

was hereunto affixed In

tha presence of i-

C5- *«*re*
 Rage 1.

THE GARENNE TRUST

BALANCE SHEET AS AT 31ST DECEMBER 1985

NOTE
INVESTMENTS AT COST
(Market Value £68,482) 1 82,631

CURRENT ASSETS

) Cash at Bank 79,348

CURRENT LIABILITIES

Creditors 7,711

71,604

£154,235

Trust Capital Account - See Page 2 £154,235

For SOVEREIGN TRUSTEES LIMITED, TRUSTEES

Direc

Date: ^ L
Appendix XV (152) (2) (a)
 MATHESON
SOLICITORS

30 Herbert Street
Dublin 2 Ireland

ORMSBY
TEL + 353 1619 9000
FAX + 353 1 619 9010

DX 2 Dublin

Prentice
e mail mop@mop.ie
www www.mop.ie

His Honour Judge Sean O'Leary, Noreen Mackey BL

Mr Paul Rowan, Michael Cusli SC
Office of the Inspectors Appointed by Order of the High Court
to Ansbacher (Cayman) Limited W
3rd Floor, Trident House m
Blackrock
Co Dublin
PRIVATE & CONFIDENTIAL
TO BE OPENED BY ADDRESSEES ONLY

Our Ref Your Ref 14 December 2001

TOG/MB C/M04/NSPM

Dear Sirs / Madam

OUR CLIENT - DENIS MCCARTHY

We refer to your letter dated 20 November 2001 to our client care of ourselves.

Regarding your preliminary conclusions, our client is not in a position to adduce evidence affecting
one way or another the preliminary conclusion that our client was a client of Ansbacher. We assume
that, in this regard, you have drawn this inference from ledger cards dated 20 November 1981 and 12
January 1983 in relation to account at Guinness & Mahon entitled GMCT re College B/G account
number 32713/03/68 and account in the name of GMCT / College Sundry Sub Co account number
63127/02/16 respectively and other information in your possession to which neither we nor our client
are privy.

Our client is quite categorical, however, that, if he was a client of Ansbacher, he was at all relevant
times totally unaware of this fact. He has been absolutely consistent in this regard both in his
instructions to ourselves, his statement dated 8 June 2000 submitted to you and in his evidence in the
course of his examination under oath by you on 15 June 2000. His evidence in this regard is as far as
we are aware, the only evidence in your possession which touches upon this issue.

It is of the utmost importance to our client that both you and all persons reading your final report are
not given the impression that our client was aware that he was a client of Ansbacher. Our client's
view is that the words 46even though he may have believed his trust arrangements were in the Channel
Islands" at best would not convey to the reader the fact that our client was unaware that he was a client
of Ansbacher and, at worst, could give the impression that you had some doubt, and had reasonable
grounds for having such doubt, as to whether he believed that his trust arrangements were in the
Channel Islands. For these reasons, we would submit on our client's behalf that your preliminary
conclusions in relation to our client should be amended to read as follows:-

DUBLIN LONDON PALO ALTO

PARTNERS ASSOCIATES CONSULTANTS
SirAnihony O'Reilly Donal Roche Patrick Sweet man Deirdre Morris Deirdre Dunne Nicola Rooney Lisa Broderick Anthony Walsh 1
(Chairman) William Prentice Brian Buggy Helen Kelly Paula Mullooly Lisa Sexton 1 Vanessa Byrne John Ryan 1
Garrett Gill Roderic Hnsor Don McAleese Sharon Daly N'eil Kecnau Frank O'Neill " Mark Varian John Gulliver 1
Michael Irvine J a m c» Hickey Simon McAleese Ruih Huuter Tony Williams Greg Lockhart 1 Tara MacMahon Bernard Doherty 1
Arthur Moran Pauline O'Donnvan Paul Ok-:field Tonv O'Grady Patrick Molloy Turlough Galvin Barry Lynch
Paraie Madigan Hilary Prentice
Giaham Richards Stanley Watson Andrew Doyle Anne-Marie Bohan Tanya Holly Robert O'Shea
Michael O'Connor Lorraine Compton
Alan Graham Robert Heron James Scanlon Kenneth Egan Sinead Duffy Paul Farrell
Edward Miller George Brady Jacqui Cross Kevin McGilligan
Michael Tyrrell Liam Quirke Michael Jackson Tara Doyle
Emer Hunt
Frank Nowlan Andrew Muckian Chris Quinn Patrick Spicer Susan O'Reilly
Stuari Margetson Tim Scanlon Catherine Galvin 1 Catherine Young

LONDON Third Floor Pinnacle House 23-26 St. DunstunN Hill London F.C3 SI IN England m . + 44 20 7618 6750 FAX +44 20 7618 6790
PALO ALTO 375 Forest Avenue Palo Alto CA,»430I 2521 l.'SA TIL + 650 470 0810 r\x + 650 470 0811
nut a memtvr of the Law Society of Ireland
 "The Inspectors conclude that Mr Denis McCarthy was a client of Ansbacher, although at all
relevant times he was unaware of this fact".

We would be grateful if you would let us know whether or not you agree to make this alteration to
your preliminary conclusions before progressing the matter insofar as our client is concerned.

Yours faithfully ,

\MOP_DUBLIN\523867.1