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 4 ] : A P P E N D I X X V ( 1 5 3 ) TO X V ( 1 6 7 )
 ISBN 0-7557-1355-9

© Government of Ireland 2002

Appendix XV (153) Mr Harold F Murray
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Harold F Murray.

a) Transcript of evidence of Mr Harold T Murray dated 1 February 2001.

b) Guinness and Mahon statement of 31 March 1980 re Guinness Mahon

Guernsey Limited.

c) Internal Guinness and Mahon memo of 30 September 1987 re

GMCT/College.

d) Guinness and Mahon statement of 20 January 1986 re GMCT/College.

e) Letter of 4 January 1994 - IIB to Kredietbank NV.

f) Internal IIB memo re Murray Group Holdings credit application of 3

February 1989.

g) Internal Guinness and Mahon credit committee memo of 29 April 1977.

h) Letter of 25 April 1989 - IIB to Murrays Europcar Limited.

i) Letter of 23 July 1993 - Murrays Europcar to IIB.

j) Letter of authority - Murrays Europcar to IIB in respect of accounts of the

company up to 31 December 1992.

2. Correspondence received from or on behalf of Mr Harold F Murray.

a) Letter of 3 December 2001 - O'Donnell Sweeney Solicitors to Inspectors.

Appendix XV (153) (1) (a)
PRIVATE EXAMINATION OF MR. HAROLD T. MURRAY

UNDER OATH

ON THURSDAY, 1ST 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 0'LEARY

MS. MACKEY BL

Solicitor to the Inspectors MS. M. CUMMINS

Interviewee: MR. HAROLD T. MURRAY

Represented by: MR. NORMAN FITZGERALD

0'DONNELL SWEENEY

SOLICITORS

15 - 16 FITZWILLIAM PLACE

DUBLIN 2
 I N D E X

WITNESS EXAMINATION

MR. H. MURRAY JUDGE O'LEARY

 1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,

2 23RD JANUARY 2 001:

4 JUDGE 0'LEARY: Mr. Murray, as you are

5 aware, we are appointed to

6 investigate the affairs of a limited liability

7 company. We are not appointed to investigate your

8 affairs. We are appointed to investigate the

9 affairs of a limited liability company.

10

11 Unfortunately, there are many people whose paths may

12 have crossed the limited liability company we are

13 investigating and we have to ask them a certain

14 number of questions relating to their knowledge of

15 or business with the company.

16

17 Now, it is a reasonably informal procedure except in

18 one regard and that is the evidence is taken on

19 oath. So I would ask the solicit or to the inquiry,

20 Ms. Cummins, to administer the oath.

21

22 MR. HAROLD MURRAY, HAVING BEEN SWORN, WAS EXAMINED

23 AS FOLLOWS:

24

25 1 Q. JUDGE 0'LEARY: First of all could

26 I introduce both of us.

27 This is Miss Noreen Mackey. She is one of the

28 inspectors and my name is Sean O'Leary, I am a Judge

29 of the Circuit Court and I am another one of the

4
 1 inspectors. There are four inspectors but for

2 simplicity sake, and to avoid the appearance of a

3 large number of people, we have, with regard to most

4 of the individuals, allocated one or possibly two

5 inspectors to deal, if you like, with any matters

6 arising in that case.

8 So Miss Mackey and I will deal with anything which

9 arises in your case which may be nothing at all but

10 anything that arises we will deal with it. Do you

11 understand?

12 A. Yes.

13 2 Q. Could I first of all say thank you very much for

14 coming this morning and you are welcome.

15

16 The position is we are investigating a company which

17 apparently, that is all I can say at the moment,

18 operated in Ireland even though, if you like, based

19 in the Cayman Islands, operated in Ireland and

20 provided a banking facility to certain individuals

21 within Ireland and it is our job to enquire into

22 these activities, did they take place, and

23 ultimately to report to the High Court.

24

25 If you like, we are creatures of the High Court. We

26 have if you like, no statutory basis other than

27 appointment by the High Court under the appropriate

28 legislation. It is not because I am a Circuit Court

29 Judge or Miss Mackey is a Barrister, that does not

5
 1 give us any rights. It is because we are appointed

2 by the High Court so, if you like, it is the High

3 Court that is doing the inquiry.

A

5 First of all, we know quite a bit about your company

6 and there is no point in me going through it in too

7 much detail with you, but I think the Murray Group

8 of Companies was established, I think, by your

9 father; is that correct?

10 A. Yes it was built up by my father.

11 3 Q. Is your father dead, is he?

12 A. My father and mother died in 1994, December 1995 my

13 father.

14 4 Q. He was a good age when he died, was he, Mr. Murray?

15 A. He was 82.

16 5 Q. And he established what was originally a car hire

17 company; is that right?

18 A. No, he started off in the funeral business.

19 6 Q. Did he, in fact, yes?

20 A. And he moved from the funeral business and I suppose

21 in the 40's into renting a small number of cars and

22 gradually the car rental business became, more or

23 less, the main business and then we moved into the

24 car sales business. He bought a garage in

25 Serpentine Avenue which was owned by a friend of his

26 who got into health difficulties and he bought the

27 garage off him to help his family out.

28 7 Q. So he followed the pattern of a fairly successful

29 entrepreneur during the course of his life?

 1 A. He was, yes.

2 8 Q. How many children did he have, do you mind me

3 asking?

4 A. He had nine children, one died at birth and the

5 other, my brother, died I think about 7 years ago,

6 my younger brother, Paul.

7 9 Q. But, if you like, there were?

8 A. Five girls and three boys.

9 10 Q. I think in common with a lot of people in the

10 1970's, and I want to emphasise we are not

11 investigating this, but in common with a lot of

12 people in the 1970's, your father took certain steps

13 in the early 1970's with the coming of capital taxes

14 and that sort of thing, he made certain arrangements

15 with regard to the establishment of a Trust and all

16 that sort of thing?

17 A. Well, are you referring to anything in particular

18 now?

19 11 Q. Well, did he establish a Trust?

20 A. What happened was we sold some properties,

21 I understand, and he established a Trust at that

22 time.

23 12 Q. So that was not unusual at the time?

24 A. No.

25 13 Q. Do you know what the name of that Trust was or is?

26 A. The Trust was the Woodward Trust, as far as I

27 understand it, and that was on the sale of

28 properties in '73.

29 14 Q. We are not investigating that. That is not a matter

 1 really of any consequence. We are accepting that as

2 fact. Do you understand?

3 A. Yes .

4 15 Q. So you need not worry, so far as we are concerned,

5 about that at all. So he established a Trust, he

6 got his money, whatever way he got the money, it

7 makes no difference to us, and he established a

8 trust called the Woodward Trust; is that right?

9 A. That's correct.

10 16 Q. And that was established where, do you know?

11 A. In Jersey. I think at that time there was some

12 worry, I believe, of devaluation of the Irish Pound

13 I think.

14 17 Q. He deemed it prudent to do it anyway?

15 A. Yes .

16 18 Q. That was fair enough. So he established the trust

17 and we have in fact the documentation and I do not

18 intend to go through that documentation with you.

1 Q
-L J

20 I think that trusts, they operate through companies.

21 Do you know the name of the company that this Trust

22 operated through?

23 A. I am not sure I understand what you mean by that.

24 19 Q. When a Trust is established, you see, the Trust is

25 established and it has to operate. In other words,

26 it has to function and one of the ways it functions

27 is that there is a company attached or owned by the

28 Trust. Were you familiar with the name of the

29 company which was attached to the Woodward Trust?

 1 A. No I don't think I know that. As I understand from

2 that particular point about that, we transferred

3 those funds from the sale to Jersey and they set up

4 the Woodward Trust there?

5 20 Q. Yes .

6 A. And that was my father's kind of whatever.

7 21 Q. I understand that?

8 A. He dealt with that entirely. It was not part of our

9 company, if you understand what I am saying.

10 22 Q. It was not part of the company?

11 A. It was not part of the company and it was set up

12 off-shore.

13 23 Q. But, of course, the funds had originally come from

14 the company; isn't that right?

15 A. They did, yes.

16 24 Q. So, to that extent, it had a connection with the

17 company?

18 A. It did. I understand the way it was set up that it

19 did originally have, yes but the funds weren't

20 needed as I understood.

21 25 Q. Does the name Sumac Limited mean anything to you,

22 Sumac Limited?

23 A. Sumac, no I heard it, I heard it somewhere but it

24 does not mean anything to me.

25 26 Q. You did not know about it, did you?

26 A. No, I should really point out that I was working at

27 the time in Esmonde Motors where I had moved from

28 Murrays at that time and I wasn't really, I didn't

29 even know the Trust was set up until recent times

 1 when this has all come to light. I am talking about

2 at that time now.

3 27 Q. Yes I understand that but you knew about the company

4 Sumac many years later, didn't you, you did business

5 with it?

6 A. I heard about that later, yes, but I am not sure

7 what the actual involvement of that was.

8 28 Q. What did you understand it to be? Don't mind what

9 I understood it to be. You tell me what you thought

10 it was?

11 A. I don't know how I was involved. I know that we set

12 up the Woodward Trust and, as far as I was

13 concerned, the actual money that my father put out

14 into Jersey was used sometimes for the guarantee of

15 loans. I do not really know.

16 29 Q. We will come to that later.?

17 A. When it comes to Sumac, I don't really know the

18 connection.

19 30 Q. You do not know anything about Sumac?

20 A. I don't know the connection and I don't understand

21 the connection.

22 31 Q. I see. Now, when did you say you acquired a

23 position of significance within the Murray

24 organisation?

25 A. Well a position of significance, I was asked to move

26 to Esmonde Motors in 1968 and I was there for many

27 years. That was a company that was involved with

28 selling and buying and also selling new cars that

29 was cars for our hire drive company and I got in

10
 1 involved in that part of the business for many years

2 and we sold the property there in Serpentine Avenue

3 to the bank, that was the early 70's and it must

4 have been five years later we moved eventually. We

5 moved to a small garage next. We rented one which

6 was Kinsellas on the Blackrock Road which was too

7 small for what we required and we eventually bought

8 the OK Garage in Stillorgan and I have been there

9 for -- in fact, my head office is still there but

10 I became involved in the car rental business more

11 and more through buying the cars for that car rental

12 company, and I got more involved.

13

14 We had a lot of people working for us. We were kind

15 of with the car rental company for many years, 40

16 years wouldn't be unusual but I got involved as a

17 main Board Director I think it was 1978.

18 32 Q. I see. When did you become Managing Director?

19 A. Managing Director I think was around 91.

20 33 Q. Yes and before that who was the Managing Director?

21 A. Before that, Ray Carroll was the Managing Director

22 before that.

23 34 Q. At the time that you became Managing Director, let

24 us take that picture in the early 1990's, just at

25 that time, who were the owners of the Murray Group?

26 A. The owners of the Murray Group, the shareholding

27 was, my father, of course, was the main shareholder.

28 35 Q. Yes .

29 A. And the other Directors are...(INTERJECTION).

 1 36 Q. We will put it like this: How much did you own?

2 Forget the others for the moment. What percentage

3 did you own?

4 A. Nine per cent.

5 37 Q. You owned nine per cent?

6 A. Yes .

7 38 Q. And when did that change?

8 A. The nine per cent changed on my father's death.

9 39 Q. Which was in 19?

10 A. 94, 95 I should say.

11 40 Q. And after that? What percentage did you own after

12 that?

13 A. What happened was after that, my brother, Paul, had

14 died and the way the actual, my father's wishes were

15 that the girls were to get 40 per cent of the

16 company and the boys would get 60 per cent of the

17 company but that was not established. I was trying

18 to get him to actually lock-in on that at a much

19 earlier date because I was building up the company

20 and the cake was getting bigger and I was trying to

21 get him to fix the amounts and so on but eventually

22 that was done, and when my brother, Paul, died, the

23 girls were dealt with with preference shares and he

24 left his house and contents to the girls.

25

26 My father gave me 60 per cent of the company and

27 that was including the nine, now, and my other

28 brother, Noel, forty per cent.

29 41 Q. So that was the way it divided?

 1 A. That was the way it divided and then after his

2 death, the girls disputed the Will and my father had

3 held ten per cent for my mother and ten per cent

4 for himself. Don't ask me why he held on to it and

5 when he died, of course, that was in the estate and

6 there was a dispute over that and the girls were,

7 two of the girls, the other girls were advised,

8 three other girls to get involved because it was in

9 their interest. One decided not to and it

10 eventually ended up that the four girls got five per

11 cent each. Since then, we have bought out the five

12 per cent of each of the girls.

13 42 Q. So the position nowadays is that you own sixty per

14 cent, is it, approximately?

15 A. As I speak, we are just about to sign a deal where I

16 am buying out by brother, Noel, so there is nobody

17 left other than myself then.

18 43 Q. I see. Did Mr. Carroll own a percentage of the

19 company at any stage?

20 A. Ray Carroll?

21 44 Q. Yes?

22 A. Yes he had five per cent. As I understand, my

23 father passed over at some stage the five per cent

24 to him because he was with the company for a long

25 time.

26 45 Q. Are you sure it was not nine per cent because I have

27 some documents which would seem to suggest it is

28 nine per cent. I could be wrong now?

29 A. I am sorry...(INTERJECTION).
 1 46 Q. Would you check that for me?

2 A. I could check that out.

3 47 Q. That would be very helpful?

4 A. I know that my Uncle Anthony, who was involved in

5 the funeral business at the time, was given a

6 percentage and Ray Carroll was given a percentage at

7 some time.

8 48 Q. Mr. Carroll's involvement, the dates of it where he

9 owned X per cent and X per cent?

10 A. Yes .

11 49 Q. If that was laid out to us, it would be of

12 considerable assistance if you would do that?

13 A. Yes okay.

14 50 Q. I know these things can become very complicated down

15 through the years and you don't necessarily carry

16 them around in your head, but if we were making a

17 report, we may not mention it in the report at all

18 but if we do have to mention it, we would prefer to

19 be accurate, as you will appreciate. We don't want

20 to say Mr. Carroll had five per cent when he had

21 nine and we certainly don't want to say he had nine

22 per cent if he had five. Do you understand what I

23 mean?

24 A. Yes .

25 51 Q. Was Mr. Carroll a family member?

26 A. No he wasn't a member of the family, no.

27 52 Q. He was a trusted employee?

28 A. He was an accountant.

29 53 Q. He did move into more general management at one

 1 stage as well, did he?

2 A. He was Managing Director.

3 54 Q. And when would he have ceased to be that then, Mr.

4 Murray?

5 A. He retired, I think, in 1991.

6 55 Q. In the normal course of events?

7 A. Yes .

8 56 Q. And your arrival on the scene as Managing Director

9 was, if you like, following on from that retirement?

10 A. That's correct, yes.

11 57 Q. I am only just trying to get the picture. The

12 company which we are investigating is, as you know,

13 it is a company which was a subsidiary of Guinness &

14 Mahon here in Ireland and which ultimately had a

15 number of different names but if we call it

16 Ansbacher for the moment but it did not always have

17 that name. You will have seen the other names that

18 it had?

19 A. Yes .

20 58 Q. And you are probably saying to yourself, "What is my

21 connection with that company?" and I will go through

22 that with you. But before we go through that, and

23 that is where we are heading, if you like, I am not

24 taking you by surprise, I would like to just canvass

25 your company's involvement with Guinness & Mahon.

26 How long was your company doing business with

27 Guinness & Mahon?

28 A. I don't really know but I do know that we did

29 business with them for a certain number of years but

 1 I wasn't really involved in the financial

2 arrangements or loans.

4 I was involved more in the operational side of it,

5 totally in fact, but I do know that we dealt with

6 Guinness & Mahon and obviously I knew that because

7 they used to have an annual golf outing in the

8 Castle, I used to play in it and I knew they were

9 involved in it.

10 59 Q. Did you negotiate anything with them?

11 A. I never negotiated.

12 60 Q. Never negotiated?

13 A. No I was never involved in any of it.

14 61 Q. Did you know any of the people involved in Guinness

15 & Mahon?

16 A. Yes I knew Maurice O'Kelly.

17 62 Q. Did you know Mr. Traynor?

18 A. No.

19 63 Q. Or Mr. Collery?

20 A. No.

21 64 Q. You did not know them?

22 A. No.

23 65 Q. I see. Now, from about 1989 onwards, that banking,

24 right?

25 A. Yes.

26 66 Q. About 1989 onwards, that arm of the banking seems to

27 have been changed to IIB; is that correct?

28 A. Irish Intercontinental Bank?

29 67 Q. Yes?

16
 1 A. Yes, that's right because I remember meeting them

2 and seeing them in Merrion Square.

3 68 Q. I take it that from 1991 onwards, you would have

4 dealt with IIB directly or indirectly?

5 A. I did not deal with them directly, no.

6 69 Q. But would you have been aware of the money you were

7 borrowing from them?

8 A. No the borrowings changed, you see. The money we

9 borrowed for cars, during the early 1980's, we took

10 over a Ford dealership in 1980 and the new car

11 market at that stage was about 106,000 registrations

12 per annum and in 1981/82, the market collapsed so it

13 was not necessary to have collateral for borrowing

14 for cars because cars were not acceptable to banks

15 as an asset because the banks felt they could not

16 repossess them clearly enough, and as we moved into

17 the 1990's, the economic situation changed and we

18 were borrowing money through Ford, Ford Motor Credit

19 Bank, in which we could reverse the situation and we

20 could borrow money versus cars, if you like, so we

21 weren't really involved in that.

22

23 I have to say I would not be aware of what financial

24 arrangements were made with IIB.

25 70 Q. But after 1991 you would, surely? You were the

26 Managing Director after 1991?

27 A. I was, yes but we had a new accountant who dealt

28 with loans.

29 71 Q. And what was his name?

17
 1 A. His name was Dan Kenny.

2 72 Q. And is he still with you?

3 A. He is, yes. He is our accountant and our financial

4 guru or whatever. I think he joined the company

5 around that time.

7 Sorry, I think I am wrong in that. I do not think

8 he joined the company in 1991, I think he joined the

9 company around 1995. Ray Carroll would have been

10 still involved with the company even though he moved

11 from MD, he moved to advisor, company consultant.

12 73 Q. What I am going to show now, Mr. Murray is this. I

13 am going to show you a Guinness & Mahon statement,

14 page 206 Exhibit I.

15

16 Now, I am going to show it to you because of certain

17 information which is contained in it. Even though,

18 if you like, it does not show any connection with

19 the company which we are investigating but I will

20 explain that to you later?

21 A. (Handed) Okay.

22 74 Q. It is helpful for me in understanding the full

23 picture?

24 A. This is a Guinness & Mahon Sterling Account. This

25 is 1980?

26 75 Q. 1980, all right?

27 A. Yes.

28 76 Q. Now, you will see that it is an account which

29 Guinness & Mahon in Dublin had for Guinness Mahon

18
 1 (Guernsey) and it was for a particular customer?

2 A. Sorry?

3 77 Q. It was for a particular customer, if you like. The

4 customer was not Guinness Mahon (Jersey). I think

5 the customer was the Murray Group in one guise or

6 other?

7 A. Yes .

8 78 Q. There is nothing wrong with that, I am not making

9 any suggestion there is. But you will see a number

10 of things arise with regard to that. You will see

11 in March 1980 to "H.T. Murray College Trustees

12 Jessica Trust, £91,100."

13

14 Now, can I take it that the "H.T.

15 Murray"...(INTERJECTION)?

16 A. Sorry, "Transfer into H.F. Murray".

17 79 Q. "H.F. Murray" is first, yes?

18 A. "28th March 1980 transfer to H.T. Murray College

19 Trustees".

20 80 Q. Who is H.F. Murray?

21 A. That is my father.

22 81 Q. All right. Do you know anything about that?

23 A. No.

24 82 Q. Do you know anything about Jessica Trust?

25 A. No.

26 83 Q. Did you ever hear of Jessica Trust?

27 A. Never heard of it.

28 84 Q. Look at the next entry?

29 A. "A.P. Murray"?
 1 85 Q. "H.T. Murray"?

2 A. "A.P.", that is Ann Patricia, that was my mum.

3 8 6 Q. MS. MACKEY: "H.T. is the next one?

4 87 Q. JUDGE 0'LEARY: "Transfer to H.T. Murray"?

5 A. Sorry, I thought you said that?

6 88 Q. No I didn't, I said "H.F. Murray"?

7 A. "H.F. Murray", that is my father.

8 89 Q. The next is "Transfer to H.T. Murray"?

9 A. Yes, £81,990.

10 90 Q. Yes?

11 A. Yes.

12 91 Q. And something to do with a Delisle Trust?

13 A. Delisle Trust.

14 92 Q. Yes. Is that you?

15 A. Never heard of it.

16 93 Q. Is that you?

17 A. I have no knowledge of that at all.

18 94 Q. Is that you?

19 A. H.T. Murray is me, yes.

20 95 Q. Did you get £81,990 directly or indirectly in 1980?

21 A. I would say I could have but I don't recall. I know

22 that year I bought a house. I sold my house in

23 1979/80, the very end of 1979 in Kill Lane, which is

24 where I lived, for £100,000 and I bought another

25 house in Carrickmines for £164,000 and I borrowed

26 £100,000 from the bank.

27 96 Q. Which bank?

28 A. I don't know why or I will have to check what that

29 was because any money that I got...(INTERJECTION).

20
 1 97 Q. I know you strike me, Mr. Murray, with respect, as

2 a very modest man. You are not a flashy life-style

3 man or anything like that?

4 A. Some people may have a different opinion you know.

5 98 Q. But if you got in 1980 £81,000, almost £82,000, you

6 would not forget it. That is the point I am making

7 to you?

8 A. That is not necessarily so because when I -- the way

9 I ever got money was from the company. It might

10 have been a loan from the company or a bonus or

11 something at the end of the year.

12 99 Q. I understand that of course.

13 A. And even when I got married, I mean my father gave

14 me in 1963, £6,000 and he never handed it to me

15 himself. I got it from the accountant in the

16 company. We did not have that kind of relationship.

17 So the money that would be there, obviously it went

18 through the books of some kind or was transferred

19 into...(INTERJECTION).

20 100 Q. I might help your memory because I will now go on

21 the next one?

22 A. Yes .

23 101 Q. The next one is "A.P. Murray"; is it?

24 A. Yes .

25 102 Q. Who is "A.P. Murray"?

26 A. My mum, Ann Patricia, yes.

27 103 Q. And "Bianca Trust", do you see that, "for Trustees

28 as Trustees for the Bianca Trust"?

29 A. "Bianca Trust", yes.

 1 104 Q. Do you know anything about that?

2 A. No I never heard of that.

3 105 Q. And do you see the next one now, "Pay to Ray

4 Carroll"?

5 A. Yes.

6 106 Q. Ray Carroll, we know, was an important person within

7 your organisation at that time and he got £50,000?

8 A. Yes.

9 107 Q. Would that not in its entirety seem to suggest that

10 some kind of a divi up at that time: Your father

11 got so much, you got so much, your mother got so

12 much and Mr. Carroll got so much?

13 A. Yes. When you say "a divi up".

14 108 Q. Where did the money come from is what I am asking

15 you?

16 A. Guinness & Mahon (Jersey).

17 109 Q. I know that is where it came from, but I am talking

18 about did it come from the Woodward Trust?

19 A. I do not know.

20 110 Q. I will tell you why that becomes very relevant when

21 I show you the next two or three documents. I need

22 to know where that money came from. I really don't

23 care why you got it. I don't care whether tax was

24 paid on it or not, it is nothing to do with me, but

25 I am interested in where it came from because that

26 is necessary for the investigation of the company in

27 circumstances which I will explain to you later. So

28 I need to know where that money came from and could

29 you enquire about that?

22
 1 A. Okay. Can I take a copy of that?

2 111 Q. Absolutely we will give you a copy of that.

3 A. Okay.

4 112 Q. We will get another copy for you?

5 A. Thank you.

6 113 Q. I want to make it clear that right up to this point,

7 there is no connection with what I would call the

8 Cayman Islands, Ansbacher (Cayman Islands) even

9 though the money in question ultimately, I think, I

10 would be able to show to your satisfaction in the

11 Woodward Trust ended up in the Cayman Islands?

12 A. About 2 years ago when the Ansbacher thing came into

13 the papers, 2 years ago when that was announced, I

14 have to say, I can quite honestly say that that was

15 a bombshell and my father's name was printed in the

16 paper with that because I had never heard of

17 Ansbacher before and neither had he or anybody else.

18 114 Q. I think Miss Mackey will confirm that quite a number

19 of people who have been genuinely trying to help us

20 find themselves in the same position. That is fair

21 enough. But the reality is that what happened was

22 that the person in question, it may be your father,

23 I am not saying it was your father, but whoever was

24 involved in the setting up of the Trust?

25 A. Yes .

26 115 Q. If you like, entrusted certain individuals with

27 regard to their money and there was nothing

28 improper, there wasn't money being taken or anything

29 like that, but that person was given wide authority

23
 1 to move the money around and ultimately it ended up

2 in the Cayman Islands?

3 A. Okay.

4 116 Q. That is the problem and that is why a lot of people

5 are coming into us, do you understand?

6 A. Yes .

7 117 Q. Not because they know it themselves but because the

8 fact of life is that Guinness & Mahon, through Mr.

9 Traynor or otherwise, ended up in a situation where

10 the money ended up in the Cayman Islands and it

11 ended up in the company we are investigating,

12 unfortunately for you. Do you understand the point

13 I am making?

14 A. Yes .

15 118 Q. What I would like to show you then about that is I

16 would like to show you number 282. Exhibit 2.

17 A. (Handed).

18 119 Q. Again we will give you a copy of this if you want it

19 in due course. There is no problem or difficulty

20 with that?

21 A. The College Trust.

22 120 Q. Does the name College Trustees mean anything to you?

23 A. I have to say I heard of College Trustees all right.

24 121 Q. I think what College Trustees did is, I think they

25 managed the money out in the Channel Islands?

26 A. Yes .

27 122 Q. Would you think that is a fair summary of the

28 position?

29 A. Yes .
 1 123 Q. They were the managers, if you like?

2 A. Yes .

3 124 Q. But what happened, right, is that College Trustees

4 in managing the money had wide powers, College

5 Trustees now was a creature of Guinness & Mahon as

6 well, they had wide powers where to put the money.

7 Sometimes they put it one place and sometimes they

8 put it another. But if you look at 282, Exhibit 2,

9 you will see, do you see "GMCT", do you see that up

10 on top?

11 A. "GMCT" Guinness Mahon.

12 125 Q. Cayman Trust. That is one of the names of the

13 company we are investigating. Ansbacher came in

14 afterwards, but that is one of its names.

15

16 This is a Guinness & Mahon document and I am sure

17 Guinness & Mahon will confirm it to you if you wish

18 but College Trustees opened an account in Guinness

19 Mahon (Cayman Trust) and in September 1987 Sumac, do

20 you see Sumac there, S-U-M-A-C, Exhibit 2?

21 A. Yes .

22 126 Q. Sumac had Deutsch Marks at that time?

23 A. Deutsch Marks, yes.

24 127 Q. Did you know that at the time?

25 A. No.

26 128 Q. It is a fact. You can take it that it is a fact

27 that it was there. Do you understand?

28 A. Yes .

29 129 Q. So that is the first thing. The second thing I want

 1 to show you is one of a number of sheets of paper

2 which I have which even make the thing more clear,

3 number 283, Exhibit 3.

4 A. (Handed).

5 130 Q. Do you see it is a Guinness & Mahon statement like

6 the first statement I showed you, Exhibit I?

7 A. Yes .

8 131 Q. Except this time the money has gone through Cayman

9 because the customer of Guinness & Mahon in Dublin

10 is Guinness Mahon Cayman Trust/College. You can

11 take that means College Trustees Re Sumac?

12 A. Yes .

13 132 Q. And that means in 198 6, Sumac, which was the company

14 which was the operating company of Woodward Trust,

15 had £1.421 million Sterling. I think there was a

16 Sterling account in the Cayman Islands.

17 133 Q. MS MACKEY: Deutsch Marks?

18 A. Deutsch Marks, is it?

19 134 Q. JUDGE 0'LEARY: I do not see where that is

20 written actually.

21 MS. MACKEY: It is written on the top.

22 JUDGE 0'LEARY: It is indeed, Deutsch

23 Marks. Do you see that?

24 A. Yes .

25 135 Q. Now, did you know anything about that?

26 A. No.

27 136 Q. And where did you think the money was, because

28 I know the money came back in 1994 and we will go

29 into all that later, but where did you think it was?

26
 1 A. As far as I knew, Jersey was the only word that we

2 used, the money was in Jersey.

3 137 Q. It was being controlled in Jersey. Do you

4 understand?

5 A. Whether it was or not, as far as I knew, the money

6 was Jersey money or whatever.

7 138 Q. I understand. So you see there where there was this

8 money and it is clearly money that Sumac had an

9 interest in. Forget who owed Sumac that. It is not

10 terribly important just for the moment.

11

12 You can take it, Mr. Murray, that I have many other

13 similar examples but they all come down to precisely

14 the same?

15 A. Yes.

16 139 Q. So I think unless you can come up with an

17 alternative explanation for it, I think you can take

18 it that you are going to have to come to terms with

19 the fact that the money was in the company we are

20 investigating. Do you understand?

21 A. Well, I —

22 140 Q. There is nothing wrong with that, I can say to you,

23 but the reality is one of the jobs the High Court

24 has asked us to do is to find out who the customers

25 of the company were. Now, we certainly will have to

26 report, unless we get another explanation, that

27 Sumac was one of the customers of Ansbacher. Do you

28 understand?

29 A. Yes.

27
 1 141 Q. Now, what I am saying to you is, if you have any

2 other information which would contradicts that, by

3 all means tell us. Do you understand?

4 A. I wouldn't have any information.

5 142 Q. I am just going to leave it like that for the moment

6 on that part of it?

7 A. Yes.

8 143 Q. Now, one of the things which we are going to have to

9 do then is we are going to have to find out who

10 Sumac were, all right?

11 A. Yes.

12 144 Q. We know that Sumac were a company which was the

13 operating arm of the Woodward Trust. We have to

14 find out then who the Woodward Trust was and prior

15 to the money coming back in 1994, and I will deal

16 with that separately later, prior to that now, if I

17 was to ask you in 1991 who owned the money which you

18 thought was in Jersey, what would you have said?

19 A. My father. My father dealt with it whenever he had

20 to, I suppose.

21 145 Q. So you would have thought your father could have

22 done what he wanted with it?

23 A. Yes, absolutely. It was not something that was

24 discussed ever because I can say if he brought money

25 back or gave it to anyone, I was not privy to that

26 knowledge.

27 146 Q. As far as you were concerned, he was the man who had

28 control of that money?

29 A. Yes.

28
 1 147 Q. And when did he die?

2 A. January 1995.

3 148 Q. Between 1991 when you took over as Managing

4 Director, and I know it is a gradual thing, I know

5 you don't just go in one morning and say "I am the

6 Managing Director", that's not the way it is done.

7 I have been around business long enough to know the

8 way that family business is operated, it is a

9 gradual transfer?

10 A. Yes .

11 149 Q. So you would have naturally thought that your father

12 had the power and control over that but at some

13 stage that changed?

14 A. Yes. No, it did not change until I think he decided

15 to bring it back when the Amnesty was announced and

16 that was, as I understood, what had changed.

17 150 Q. But when the Amnesty was announced, percentage

18 meaning nothing at the moment now?

19 A. Yes .

20 151 Q. We will go into those later, but you got a big

21 percentage of it?

22 A. Yes .

23 152 Q. So at some stage it did change. At some stage

24 somebody said, "Well if it was your father's money

25 and it became your money, you got a very substantial

26 gift from your father"?

27 A. Well, when he set up the Trust, whatever way he set

28 up that Trust, I don't know.

29 153 Q. You can take it that there is nothing in the Trust

 1 that would have said you would get forty per cent of

2 the money or fifty per cent of the money?

3 A. I have no idea whether there was or not. Whether he

4 set this Trust up and he decided...(INTERJECTION).

5 154 Q. Do you have the Trust document?

6 A. No.

7 155 Q. Have you ever seen the Trust document?

8 A. No.

9 156 Q. You can take it from me I have seen the Trust

10 document.

11

12 Miss Cummins indicates to me that in fact as part of

13 your affidavit to the authorised officer who was an

14 official investigating the company, you exhibited

15 the Trust document as part of your affidavit.

16 I know you might have forgotten it, I am not making

17 a big issue of it, but you can take it that in the

18 Trust document which you have had access to, you

19 were not named as a fifty per cent beneficiary. Do

20 you understand?

21 A. Okay.

22 157 Q. It is all the children and variable. You know the

23 usual kind of nonsense that people go into in these

24 documents, you understand that?

25 A. Yes .

26 158 Q. But somebody decided that this very deserving young

27 man at the time, Mr. H.T. Murray, was not entitled

28 to the same as all the rest of his siblings but he

29 was entitled to forty or fifty per cent. All I am

 1 asking you to find out is when that decision was

2 made?

3 A. How can I answer that?

4 159 Q. I don't know because I don't know what went on.

5 When the money came for the Amnesty, your father was

6 an elderly man at this stage?

7 A. He was still involved in business in so far as he

8 was in every day, I should say, but when that

9 decision was made, I don't know.

10 160 Q. Would you show Mr. Murray a letter dated 4th January

11 1994 from Irish Intercontinental Bank to Kredietbank

12 in London, Exhibit 4?

13 MS MACKEY: Page 193.

14 A. (Handed).

15 161 Q. JUDGE 0'LEARY: You can see down there it

16 talks about your account

17 in general and the second last paragraph:

18 "On receipt of the above funds, the

amounts will be transferred into four
19 individual deposit accounts with IIB in
the following proportions: Harold T.
20 Murray, 50%; Noel G. Murray" -- (who is
your brother) -- "31%; Harold F.
21 Murray" -- (who, I think, was your
surviving father at that stage)?
22 A. Yes .

23 162 Q.
"And Ray Carroll 9%"?
24 A. Yes .

25 163 Q. Did that reflect at that time your interest in the

26 company approximately or how was that percentage

27 arrived at?

28 A. I don't know.

29 164 Q. I see?
 1 A. Unless it was in proportion to the way the

2 shareholdings were held but the shareholdings

3 changed. I never saw that before.

4 165 Q. I am not saying you saw it but you know you got

5 fifty per cent of the money?

6 A. I did not know what percentage of the money.

7 166 Q. I see. Did you know that you got more than Noel?

8 A. I expected I would get more than Noel.

9 167 Q. Because you owned more of the company?

10 A. Yes, well I was not sure what way he would have

11 broken it up.

12 168 Q. Does that not lead to the inference that the money

13 was really the company's because it was being

14 divided in accordance with your interest in the

15 company?

16 A. Yes, I suppose, but my interest in the company, my

17 mother was there with a ten per cent shareholding of

18 the company and she is not featured there at all. I

19 don't understand those percentages.

20 169 Q. MS MACKEY: Did your mother not die in

21 1994 you told us, I think?

22 A. My mother died at the end of 1994. This is 93, is

23 it not?

24 170 Q. JUDGE O'LEARY: Yes, this is 4th January

25 1994. But am I not right

26 in saying that, for instance, your sisters aren't

27 mentioned at all in that?

28 A. No they had been dealt with at that stage.

29 171 Q. Yes but they had been dealt with in so far as their
 1 ownership of the company was concerned?

2 A. Yes.

3 172 Q. But they had not been dealt with unless some money

4 which was out in Jersey or Cayman or whatever it

5 was, unless that was owned by the company as well.

6 Can you see the problem?

7 A. I have to say that my father really dealt with this

8 account most of the time.

9 173 Q. And he decided?

10 A. But my sisters now, this was before my father died.

11 My mother died at the end of 94 and my father died

12 in 95.

13 174 Q. But, you see, your sisters are not mentioned in that

14 at all?

15 A. No because they were not part of the company then.

16 175 Q. It was reflecting your interest in the company

17 approximately without being precise for the moment?

18 A. It was but I was not aware of that.

19 176 Q. I understand that. Could I ask you this: Did you

20 declare, I am not really interested in your tax

21 affairs, it is nothing to do with me. I am only

22 interested in it in so far as it might give the

23 information with regard to the ownership of money,

24 that is the only thing that we are interested in. I

25 don't care whether you have over paid your tax or

26 under paid your tax, it is nothing to do with me?

27 A. Yes.

28 177 Q. But I am interested about the fact that you did

29 actually avail of the Amnesty?

33
 1 A. Yes.

2 178 Q. Now, if the Trust was properly set up, do you

3 understand?

4 A. Yes.

5 179 Q. And if it was a proper Trust, it did not need to

6 avail of the Amnesty?

7 A. That is correct because at the time there was a

8 discussion whether or not we needed to avail of the

9 Amnesty because all the legal advice that we had was

10 that maybe we don't because our discussion was that

11 the money was legally put out there and

12 180 Q. The problem was that while it was legally out there,

13 it might be illegal to bring it back or it might

14 give rise to a tax liability to bring it back?

15 A. The tax situation changed several years after we had

16 put it out there. So when it was brought back, they

17 thought it was better that we avail of it.

18 181 Q. Who advised you on the Amnesty?

19 A. It would have been KPMG. They would have actually

20 dealt with my portion or whatever I was to get which

21 went into the company. I did not get it personally

22 because the company needed it. The money went

23 straight into the company.

24 182 Q. I understand that, but it came in by way of loan or

25 loan shares or something?

26 A. Yes.

27 183 Q. Now, do you know, Mr. Murray, that for many years

28 the company had been borrowing money on a

29 back-to-back basis?

34
 1 A. Our company?

2 184 Q. Yes?

3 A. Yes .

4 185 Q. It had been doing that with Guinness & Mahon?

5 A. Well I was not aware that Guinness & Mahon were

6 involved, although I am sure that they were, but I

7 was aware of Irish Intercontinental Bank because, as

8 I said, the motor industry at that time in the mid

9 80's was difficult.

10 186 Q. What I would like to show you is a memo which is

11 dated and it is page 227 to 231, Exhibit 5.

12 A. (Handed).

13 187 Q. This is an IIB memo and this is a credit

14 application. It is only typical of many such

15 documents that we have. If you look at page 228,

16 which is the second page of that, IIB make the

17 following statement, "Proposed Security". Do you

18 see that there down at the bottom of the page?

19 A. "IIB facilities secured"?

20 188 Q. No, the term "Proposed Securities". Have you page

21 228?

22 A. Yes .

23 189 Q. Look at the bottom of that page, "Proposed

24 Security"?

25 A. Yes .

26 190 Q.
"The term loan will be secured for
27 principal only by a bank guarantee
accepted by IIB. This will be provided
28 on behalf of a Trust controlled by the
shareholders of the company, who have a
29 deposit of a similar amount."

35
 1

2 Is that a fair reflection of what the position was

3 at that time? That is what the Bank is saying and

4 that is all it, is what the Bank says?

5 A. That's correct. I mean, it was controlled by the

6 shareholders of the company, the company being

7 Murray's you are talking about.

8 191 Q. Yes .

9 A. That is what we used to guarantee the loans at that

10 time for money we borrowed for.

11 192 Q. The only other matter that I want to talk to you

12 about before moving on probably less contentious

13 matters is of all the discussions we have had so

14 far, only one really has led to a disagreement and

15 it is this, that we have information, and you have

16 seen one document which is the bank statement,

17 Exhibit I?

18 A. Yes .

19 193 Q. Which refers to other Trusts, being the Jessica, the

20 Delisle Trust, the Bianca Trust and finally a Trust

21 called Kodier, C-O-U-D-I-E-R,I do not know how you

22 pronounce it, which I think was connected with Mr.

23 Carroll. Do you know anything about those?

24 A. No.

25 194 Q. Nothing at all?

26 A. No.

27 195 Q. Absolutely nothing?

28 A. Absolutely nothing.

29 196 Q. And specifically about your own one and I am using

36
 1 that in inverted commas now for the moment the

2 Delisle, D-E-L-I-S-L-E?

3 A. No, I know nothing about that.

4 197 Q. Fair enough. I am going to give you an example of

5 the Guinness & Mahon borrowings, do you understand?

6 I know you do not know much about them but as, if

7 you like, the main man in the company it would be

8 unfair if I did not give you the opportunity of

9 commenting on it.

10

11 So I wonder if you would go to page 296 and would

12 you bend down the top because it has nothing to do

13 with this matter. We can give you a copy of this

14 but I want to take the top off it because it is

15 nothing to do with you, it is different. These are

16 minutes of a credit minute in Guinness & Mahon and

17 you can see that at that time "Murray's Europcar",

18 Exhibit 6.

19 A. (Handed).

20 198 Q. Do you see that there?

21 A. Yes .

22 199 Q. They had these Credit Committee meetings and

23 everybody was discussed at it and you were one of

24 the people discussed at it under the heading of

25 Murray's Europcar:

26 "Murray's Europcar are borrowing

£170,000 for working capital, rate
27 15%"?

28 A. 1977 .

29 200 Q. 1977. You see there the words "suitably secured",

 1 do you see that?

2 A. "Suitably secured", yes.

3 201 Q. You can take it that we have evidence from Guinness

4 & Mahon that that word was a code they used

5 themselves which meant that they were backing

6 deposits. Do you understand?

7 A. Yes.

8 202 Q. Where they wanted to avoid saying, "This person had

9 backing deposits", they used "adequately secured" or

10 "suitably secured" as a code word. So they are

11 saying in 1977 this loan was backed by money and you

12 have no reason to doubt that?

13 A. No, any money that we would have borrowed, maybe not

14 all of it, but we secured it against our -- my

15 father actually guaranteed the loan through the

16 money he had obviously in Jersey. That happened all

17 the time right up to...(INTERJECTION).

18 203 Q. Can you see the problem that arises? You can take

19 it I have a dozen other examples, all right, which I

20 won't put to you because they are all the same and

21 you have been very fair with you us and we

22 appreciate that.

23

24 Now, the problem, as far as we are concerned, with

25 that is that nowhere in your accounts that we have

26 seen is there any record that the loans you have

27 taken out are secured by back-to-back deposits.

28 Certainly there is no reference to that until well

29 into the 90's. Do you understand and we would like

38
 1 your comment on that?

2 A. I am not an accountant but should there be?

3 204 Q. Oh, yes, you can take it that there should?

4 A. There are guarantees you have to put in.

5 205 Q. You are supposed to give a full record, do you

6 understand, so that everybody who looks at them

7 knows what the position is. Now, what I would like

8 you to do is, if you would not mind, I would like

9 you to consider that and you may wish to take legal

10 advice on it. If you do by all means of course,

11 there is no difficulty with regard to that, and I am

12 not asking that you should answer the question now,

13 if you like, but if there is anything you wish to

14 say to me about it, feel perfectly free to write

15 into me about it?

16 A. Well, all I can say really is it would be reflected

17 in our accounts that the money was transferred out

18 when they did it in the 73 period, but as regards

19 the loans --

20 206 Q. If it was company money, it should be on the balance

21 sheet. Can you see the problem?

22 A. I can't say why they were not. I can't answer that

23 question.

24 207 Q. You see, Mr. Murray, when it was moved out, if it

25 was genuinely moved out of the company, it was no

26 longer company money?

27 A. No longer company money, that is correct.

28 208 Q. Now, if it came in, if you like, through a back door

29 by you using back-to-back facilities, that should

39
 1 have been made clear in the company records and one

2 of the things that we are required to do is if

3 during the course of investigation of the company,

4 which is the banking company, we come across exact

5 accounts of where the company, which is the banking

6 company, gave information or other companies acted

7 in a way which was potentially illegal, that we may

8 have to report on it. Do you understand?

9 A. Yes.

10 209 Q. We will be writing to you formally about this but

11 I think it is only fair that I should say to you it

12 is a concern to us at the moment, not specifically

13 only with regard to your company but that the whole

14 question of the back-to-back facilities were hidden

15 from view for over 20 years as far as anybody

16 looking at your accounts is concerned, and of course

17 we will, in due course, be asking you, have you any

18 comment to make on that? So I am giving you fair

19 warning in advance that you might go away and think

20 about that and I am glad you have your solicitor

21 here who can take a note of it and he can advise you

22 accordingly and make any representations you want to

23 us about it or make no representations. It is a

24 matter entirely for yourself.

25

26 You see, I am going to give you as an example of

27 that, it might be good if you took this away with

28 you, a page 178 and this is only one example of a

29 number, and this is in 1989 before you became

40
 1 Managing Director but it is related to your company

2 and I have to put it to somebody, Exhibit 7?

3 A. (Handed).

4 210 Q. That is an offer from the Irish Intercontinental

5 Bank to your company for a loan of Stg £700,000.

6 Now, you can take it that that was cash-back loans.

7 As you said yourself, they were all a cash-back

8 loan. The offer letter to you makes no reference to

9 the back-to-back facilities?

10 A. It does say the security there, "security.... in a

11 manner acceptable to IIB".

12 211 Q. Well I think we all the know the difference between

13 a truth and a whole truth. Will we put it like

14 this, it is at least economical with the truth, if

15 you understand?

16 A. I don't think we were deliberately trying to hide

17 anything.

18 212 Q. It is not your document, Exhibit I, but I am saying

19 to you, that is typical of the way the business was

20 done?

21 A. Yes I see.

22 213 Q. Do you accept that, that that was typical of the

23 kind of short-hand that was used to hide the fact

24 that there was a specific back-to-back facility?

25 A. Well, is there something incorrect about a

26 back-to-back facility, because obviously the bank

27 have to have some kind of security and, as far as I

28 was aware, the money that was in Jersey was legally

29 over there and the bank, well you have to give them

41
 1 some security other than motor vehicles or whatever,

2 so that is why we used that. I was not aware that

3 that was illegal.

4 214 Q. I am not saying it is illegal, that is a different

5 matter altogether. You see, one of the problems,

6 Mr. Murray, and you had better take legal advice on

7 this because you may wish to make representations,

8 one of the problems we have on this is that, on the

9 one hand, you send money out to a Trust, whether it

10 was you or your father, it does not matter at the

11 moment, it is somebody within the company, sends

12 money out to a Trust. They no longer have control

13 of that money because it has now gone into the Trust

14 but in reality they have control?

15 A. I would have thought my father would have had

16 control of the Trust.

17 215 Q. At all relevant times?

18 A. I would have understood that he decided to do

19 whatever he wanted to do so he wasn't giving the

20 money out to Joe Bloggs who wouldn't go through

21 everything, you know?

22 216 Q. I understand. I am not going to go back even though

23 I have a note here with regard to what appears to be

24 withdrawals for yourself, your father, your mother

25 and Ray Carroll of £91, £81, £91 and £50,000 but I

26 think you are going to come back to me on that. You

27 have that copy there, have you, Exhibit 4?

28 A. Yes I have a copy of it.

29 217 Q. We normally take a break but we are almost finished

42
 1 so I don't think really it's necessary.

2 A. I am fine, yes.

3 218 Q. And there is a cup of coffee or tea there?

4 A. Thank you.

5 219 Q. Could I show you at page 217, I am going to give you

6 a copy and to a certain extent now I am asking you

7 to account for the potential sins of others but as

8 part of your company, if you like. I know it is

9 signed by Mr. Carroll but it is your company's name.

10 You can see the problem there, Exhibit 8.

11

12 This is a letter sent by one of your company's

13 signed by Mr. Carroll which says:

14 "I wonder would it be possible to omit

item 3 in the letter to Stokes Kennedy
15 Crowley confirming the amount of the
loans at the end of the year."
16

17 You can take it that item number 3 is dealing with

18 security.
1 Q

20 If you give, Mr. Murray the following document as

21 well because that is necessary for a fuller

22 understanding as to what was asked. That is pages

23 218 and 219, Exhibit 9?

24 A. (Handed) 92 and this is 93?

25 220 Q. Yes at the time when you were the Managing Director

26 of course. Mr. Carroll must have been still a

27 Director of the company?

28 A. He was involved. I must check those dates.

29 221 Q. Would you do that?

 1 A. Yes .

2 222 Q. It did strike me as a little odd. I do not think he

3 went out quite immediately?

4 A. No he didn't, no.

5 223 Q. I am going to assume for the moment, unless I know

6 to the contrary, that he was still involved on that

7 date and he was writing on behalf of your company

8 and was effectively saying "hide the security"?

9 A. Okay.

10 224 Q. Have you any comment to make on that?

11 A. No.

12 225 Q. Would it be fair, Mr. Murray, or unfair, finally as

13 far as I am concerned, Ms. Mackey may have other

14 questions, but would it be fair to say, I know we

15 have already gone into the question of who

16 controlled the money when it went out to the Trust

17 and you said it was your father, I understand all

18 that, but would it be fair to say that at some time

19 immediately prior to the money being repatriated for

20 the Amnesty, that discussions were held between

21 yourselves and the accountant with regard to the

22 matter?

23 A. Yes .

24 226 Q. That would be quite normal?

25 A. Yes .

26 227 Q. Do you remember who was involved in those

27 discussions ?

28 A. No because I wasn't involved directly. I was not

29 involved in the discussions of that but when I was

 1 advised I was a beneficiary, I was told that I would

2 be advised on the Amnesty and to do something but I

3 was not involved in the discussions as to how or

4 what at that time.

5 228 Q. Who would have advised that you had better do

6 something because you were going to get money out of

7 it?

8 A. My father would have said, "We feel that we should

9 avail of the Amnesty" and he would have said or

10 advised that we are going to avail of it in order to

11 bring it back and put it into the company.

12 229 Q. Yes .

13 A. I have to say I was not aware of the percentages at

14 the time.

15 230 Q. Would Mr. Carroll have been involved in those

16 discussions ?

17 A. Yes .

18 231 Q. So you would think from a practical viewpoint it

19 would be Mr. Carroll and your father and Stokes

20 Kennedy?

21 A. Correct.

22 232 Q. Would Noel have been involved in it?

23 A. No, he would not have been involved in it actually

24 because he was not -- I think he was a main Board

25 Director at that point.

26 233 Q. Would your mother have been involved in it?

27 A. No.

28 234 Q. Did your mother have any say?

29 A. No she was not involved in the company.

 1 235 Q. Would it be fair for us to assume that in so far as

2 that generation is concerned, that the control of

3 anything of that nature rested with your father

4 rather than your mother?

5 A. My father really, everything yes.

6 236 Q. Rather than your mother?

7 A. Yes.

8 237 Q. She would have taken a back seat in those sort of

9 things?

10 A. Totally.

11

12 MR. MURRAY WAS EXAMINED, AS FOLLOWS, BY MS MACKEY:

13

14 238 Q. MS. MACKEY: I have just one question,

15 Mr. Murray.

16

17 Judge O'Leary asked you about the four other Trusts

18 whose names were mentioned and they were all

19 unfamiliar to you. But can I ask you this, did you

20 have a Trust yourself in either Jersey or Cayman?

21 A. Did I have a Trust?

22 239 Q. Yes?

23 A. No.

24 240 Q. Or your brother or any other member of your family

25 that you know of?

26 A. Not that I am aware of.

27 241 Q. Thank you.

28 JUDGE O'LEARY: Would you do us a favour

29 in that regard? I am not

46
 1 asking you to do it in respect of anybody else

2 because that is unfair?

3 A. Yes.

4 242 Q. I wonder would you write to College Trustees and

5 would you ask them, have they any information on the

6 Delisle Trust, will you do that?

7 A. Okay.

8 243 Q. Because if we write to them, they will just say,

9 "Mind your own business" and we can go to Court and

10 we can get it properly through the Court but that is

11 a long, expensive, and fairly time-consuming

12 process?

13 A. I never dealt with them directly but I will write to

14 them.

15 244 Q. I understand that. We are not interested in the

16 details of the Woodward Trust?

17 A. They do not know me.

18 245 Q. I understand that and if they write back and say

19 "Mind your own business", we can't do anything about

20 that but I think you could point out to them, you

21 could send them a copy of the bank statement that we

22 have given you which shows your interest in it?

23 A. Yes, and you want to know about this Delisle Trust.

24 246 Q. That is the only one I am interested in at the

25 moment because the others have to speak for

26 themselves. I cannot ask you to speak for Mr.

27 Carroll or your brother who, unfortunately, is

28 deceased; is that right?

29 A. Noel, he has decided to sell out his interest.

47
 1 247 Q. Yes but he is moving out of the business?

2 A. He is, yes.

3 248 Q. But he is not deceased but your other brother is

4 deceased?

5 A. My other brother is dead.

6 249 Q. And your father. I am not asking you to account for

7 them. Obviously I have to ask with regard to their

8 involvement in the company. But with regard to

9 their own personal business, that is their own

10 personal business and it is nothing to do with you.

11

12 So, I wonder, would you do that for us?

13 A. Okay.

14 250 Q. It would be considerably helpful. Is there anything

15 else?

16 MS. MACKEY: No.

17 JUDGE 0'LEARY: Thank you very much. What

18 happens now is actually

19 very simple. This lady over here in the corner has

20 been taking a careful note of everything we said.

21 That will be reduced into a transcript form and you

22 will be asked to sign the transcript just to say

23 "yes that is what happened".

24 A. I am sorry if you think I was in any way unhelpful

25 but, as I said, in running the company and kind of

26 moving up through the ranks I was not that involved

27 with the financial end, whatever, in detail.

28 251 Q. Mr. Murray, I did not form the view that you were

29 unhelpful at all.

48
 1 252 Q. MS MACKEY: Finally, Mr. Murray, would

2 it be true to say that

3 Mr. Carroll was the person most involved in the

4 financial end of the company?

5 A. With the company, yes. There was arrangements of

6 loans and cash loans.

7 253 Q. And he would have had a good knowledge of the

8 company's finances and how it conducted its

9 business; isn't that so?

10 A. So.

11 254 Q. JUDGE 0'LEARY: And would have been your

12 father's financial

13 advisor?

14 A. My father was there every day up to some months

15 before he did. He used to go in and he was a very

16 dominant personality.

17 255 Q. And you know the way these dominant personalities

18 gather around them people who carry out their

19 wishes, if you like?

20 A. People who advise them, yes but he did not.

21 256 Q. Would Mr. Carroll fall into that category or was

22 there a friendly relationship or was it purely a

23 business relationship?

24 A. I would say there was a friendly relationship there.

25 They worked together for years.

26 257 Q. What age is Mr. Carroll now?

27 A. Ray is now, say, 75.

28 258 Q. MS MACKEY: Just one other question,

29 Mr. Murray. Do you have a

49
1 brother Austin?

2 A. Austin, no. No, Paul was my brother and Noel is my

3 other brother.

4 259 Q. JUDGE 0'LEARY: Thank you very much

5 indeed.

9 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

50
i
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Appendix XV (153) (1) (c)
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Appendix XV (153) (1) (d)
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Appendix XV (153) (1) (e)
 IRISH IHTtHCONTimHTAL SANK

FOD/AOC January 4, 1994

Kredietfaank NV London Branch,

Exchange House - 7th Floor, .
Primrose Street,
London EV2A2HQ.

Sumac Investments Lfmited/Murravs Europcar Limited/Esmonde Motors Limited.

\

:... Sirs,

We refer toour letter to you of 28 May 1993 in connection with Sumac Investments
Lhnited/Murrays Europcar Limited. We hereby confirm that it is in order to transfer the full
balance on deposit account number 40349002 to our account in Royal Bank of Scotland -
.. account Irish Intercontinental Bank Limited. We understand that the balance on this account is
circaGBP922,6o6. ' *

We also refer to our letter to you of 28 May 1993 in connection with Sumac Investments
Limited/Esmonde Motors Limited. We confirm that it is in order for you to transfer the full
balance on deposit account number 40349001 to our account at Kredietbank Bankverein Bremen
- account number 5000971910 - account Irish Intercontinental Bank Limited. We understand
that the balance on this account is circa DM1,142,000.

v
.:£mts. With HB iai the folfr^proportioiis, Haiold $ Munay - 31%,
'liaorold P.'Wbnii^ f ^ K ind ib^S^nd'CacroKl • if J."»-•• :."«# * ,»:'..

We hereby confirm that you will be released from your guarantees to us of 28 May 1993 subject
to receipt of the abovefilnds. We understand that the transfer of funds is to take place on 7
January 1994. The instruction of Sumac Investments Limited in relation to the amount and
allocation of the transfer to the individual deposit accounts must be in accordance with die above
proportions.

Yours faithfully,

1
'*m Donlon,
yj/j dl j*
Finola O'Donoghue.
cutive Director. Manager.
HUSH INflKCONtlNtNf AL BANK LIMITtD • »l MLRWON M)UAU. OUSLIN I • (UtCHClNC. 01 OOI")?«J*' rACSIMHt. 01 »>H»0>4 •rtltXJJJ11

A hUMhtUIAHV Of KHlDttTBANN N V
Appendix XV (153) (1)(D
 HURRAY GROUP HOLDINGS LIMITED AND SUBSIDIARIES

CREDIT APPLICATION

Background:

The Murray Group ("Murrays") was started in the 1930's 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
-'isales","^- The current group structure is;outlined in ApfMndix. 1;(including ... .
trading) although there are only' two principal trading companies/
,••• ->. vizi
• .J t * * •
- Murrays Europcar Limited - Car hire
- Esmonds Motors Limited - Car sales

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
^ ^ s g r t a s r a j ^ — »
continue in business at that time. In 1973 Murrays entered e 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 AOS of total business. In addition, Murrays
have three year contractwith Aer Lirtgus to supp
fly/drive programme. This also leads to substantial volumes particularly
— ^ -" " ^Jti^^^l^^^SM^^^IiiMSiiiici™^ Vacant' s e a t s W —

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 and 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.

tftt
 )

Prbpoaali

Murrays have a core borrowing requirement of approximately IR£1.2m which

they have traditionally borrowed in currency. It i9 proposed to transfer
this fron Guinness-& 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 it(irm>elfTUqM4.d«tln9^'It has •
- traditionally been provided by Bank of .Ireland Finance.

Existing Banking Facilities*

The following facilities are .available to Hurrays«

t
1. Bank of Ireland - Overdraft Facility - IR£250k
Credit - IR£400k
2. Industrial Credit Company - Tourism Loan IR£3Q0k
3. Bank of Ireland Finance - Car Loans - Up to IR£2.5n.

The Bank of Ireland • facilities are secured by an equiteble deposit of the

title deeds to Haddington Road (value IEP 400k) premises and the guarantee
of various group companies.

The Bank of Ireland Finance facilities are secured by a chattel mortgage

.. ~oves..tl».jHW»1 financed together with a. holding coapeny guarantee^
a*w. I ^ v j O U U * ^ : ^ ; ^ ^ , ^ ^ .
The ICC facilities are secured by a floating chargetoVerThorndene 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 t

.The term loan would be secured for principal only by a bank guarantee acceptable
to 118. This will be provided on behalf of a trust controlled by the shareholders
of the company, who have a deposit of a similar amount.
 Security for 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^he past the company has provided chattel mortgages on
the.oars 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 wes 2.4 (1986: 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£408k (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 Esmonds
Motors performing well for the first time in many years.

Financial Postitlon:

•Thir financial position-at-31st Paceaber

net worth of IR£2.1m (19B6: - IR£1.7n) representing -39* of total assets.
The long term liabilities represent 7158 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 (IEPBOOk) and fixed assets of IEP 1.2m provide significant additional
security cover.

T
 Assessment:

This is a company with a long tradition in the motor industry in Ireland

which has weathere'd the recession of the 80'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 for many, years.

• ">. The pro^osail ;for; facility .represe^

1
. return of 3/4% on whaV is very' limited fisRT The risk onlnterestislimited•'."-lilv:'"
, ^ "as the structure can be collapsed at any time (KB London will earn Vflg
on the guarantee which- is cash collateralised).
!
The proposal to finance short term car asset's is well secured by stocks
and'fixed assets 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
~ — f l e e t " and-to'lnspect-lte * tax J>*i6k«.aSr£taM
centrally in head office.

The principal risks associated with the short term funding proposal are
changes in excise duties and frauds Given the likelihood that any excise
duty changes will be signalled in the Budget, (in January - when stocks ere
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 •fffc^s. of the
changes. » In addition, the i^rtance.of the car hire industry to tourism
4
^ ^liey • conceivably lead 'to- special treatment -as ,thaIpmb*.-^
• makes the possibility of large scdle fraud unlikely. Any disposal of the fleet
in excess of plenned level would have the effect of reducing prices significantly
in the market place.

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
 «' la

Borr
°Keri Hurrays Europcar H£2jJ*S' 2803 Pate: 3.2.8

C26) Purpose and Justification

Purposet 1. .To approve a new IR£i.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

fecilityi
I .2, The revolving credit isjustified.by: ,
I '.':'. (a) thestrong asset cover (2.5«j.) --W
(b) the annually self liquidating.nature of the transaction.
(

(27) Guarantees and Collateral

a). Existing —

b) In process

Bank
e) Proposed (New or additional) v£i« Guarantee acceptable to IIB
(probably KB London)

A '
<0 Special Conditiona/Covenants i • 2- (Jjarantee-of^^group companies :
suppor£e«Tby first fixed and floating
• ali'^*4ets- of: borrm»eir
shared pari passu with ICC in an amount
• . i of IR£300k.(to be negotiated)
i
(28) Terms and conditions \
1. LIBOR + 3/4* 1 fctWfcS & &
u
2. DIBOR + RAC + 2S iUttuuUriOu. (g ~
te'-t*. cit fti Vrt-r C*je*llf

ffoVvJuJtt-t^/
S. FCeei fe Lg s*j\#MiJUaf
tubtuAslJ U. fArppiMxIt.Jf
Appendix XV (153) (1) (g)
 i^hln

428:

I . I

Racommandad.
429s Murrays European

Amount: £170,000
ftirpote: Working capital
Rata: 15%
Drawdown: * 4/5/77

S«curl_ty: "Suitably leemed".

Ravlcw: 4/11/77

Recommended.

430:
V*'
I 1

IRISH INTERCONTINENTAL BANK

LIMITED
25 April 1989

Our Ref: GQ/VH/2803

Murrays Europcar Limited

Baggot.Street Bridge
Dublin 4

Dear 8Ira
We are pleased to confirm the wllUngneaa of Jrlah
Intercontinental Bank Limited ("IIB") to make the
.following facility available to Murraya Europcar Limited
("the Borrower") on the following terms:and condltlons:-
1• TYPE OF AND AMOUNT OF FACILITY;
A term loan of up to STG£700.000 (aeven hundred
thousand Sterling pounds) to be used by the Borrower
for general working capital purpoaea.

2. QVRflgNpY Q F F A C y U T Y ?

Thefacnity.maybe drawn down inanyfreely

.. available currency other than Xrleh pounds eubjapt
to the agreement of ITB and the Central Bank of
Ireland.

3. LATEST DflAWPQWN PATit

•

The facility la to be drawn down 1n full not later

than May 318t, 1989. Mot leaa that two bualneaa
days notice of the Intention to make the drawing
will be provided by the Borrower to IIB.

i • • • •

Iisz
kcfbttred Number *W37 Republic of IrcUnd

. —y c
 /2.

INTEREST;
The Interest rate or rates on amounts outstanding
under the facility.will b® aet on the data of first
drawdown and for subsequent rollovers on the first
day of each Intereat period. In each case the
Interest rate will be 3/4X above the rate at which
IIB shall be offered funds of like amount on the
London Interbank Market for the remainder of the
relevtmt Interest period. i
The Borrower may, by notice 1n writing to IIB, not
later that three business days before the date of
first drawdown, or as the case may be before the
expiry of an intereet period, elect whether the next
following Interest period will be of one or three
months duration, or such other duration as may be
agreed from time to time by IIB and falling such
election by the Borrower, the next following I
Interest period will be of three months duration.
Interest will be calculated on the dally balance
outstanding and will be due and payable on the last
day of each Interest period with the final Interest
payment on the date of final repayment of the loan.

5. PERIOD OF FACILITY:
Without perjudlce to ZIB's right to require
repayment of the loan on demand at any time, 1t Is
agreed that, unless and until IIB shall exercise i
such right, the loan will be repaid not later than
January 31st, 1990. I
" •' i ' ' ; • . .• //••••;• ••;•'•••.." I

6' SECURITY s ' '*

Any and all indebtedness or liability of the
Borrower to IIB is to be secured in a manner
acceptable to IIB.

i % e • e
 /3,

7
- CONDITIONS PRECEDENT;
In addition to the Conditions Precedent set out in
clauae 1 of iib's Standard Terms and Conditions,
drawings under this facility are subject to:-
(a) Completion by the Borrower of warranties In a
form acceptable to IIB. The warranties relate
to 8uch matters as the accuracy of Information
furnished In the course of negotiations for the
facility and the absencerof any pending or
. threatened litigation;
l
(b) Receipt by IIB of appropriate Instructions as
. to the management of the account;
(c) ixb being satisfied that adequate overdraft
facilities will continue to be available from
the Borrowerother bankera;

a
* STANDARn TERMS AND CONDITIONS:
The facl 11 ty is subject to IIB's Standard Termsand
Conditions which are attached hereto and which form
part of this facility letter.
8
* acceptance Q P QPFER.»

This offer will lapse on 1st May 1989.

T o
f^ accept this offer on the above terms and
conditions, the enclosed duplicate of this letter
8nouldbe signed and returned toue, together With ,
the aittached form for the opening of. an account

Yours faithfully,
for and on behalf of
IRISH INTERCONTINENTAL BANK LIMITED

E A MARAH «
Deputy Chief Executive ^*Associ«® oicawcor
Accepted on the above Terms and Conditions
For.r.and on Behalf
and on Behalf of
of MURRAYS
MURRAYS EUROPCAB
EUROPCAB L. LIMITED

Authorised
loriseo Signatory
signatory Authdrh
Authorised Signato

T
Appendix XV (153) (l)(i)
 Europcar
Murray* Europcar Limited
faggot 8tra«t Bridge,
Dubfln 4, Imtand.
Talephone 668 1777
Telex 83784
Fax 660 2956

~ li/K ^ VJ/
Our ret: llC/VfC at M«<'
Jvbyptt, 1993.

/ M r . Hudo D o h e r t y
*' H a n a o e r - B a n k i n o r ,
I r i s i i I n t e r c o n t i n e n t a l Bank,
91 /Carrion Square,
" vDublin = 2 .»

Dear Hugo,
I enclose copies of the Audited Account's to December 31st 1992
as follows:-
C o n s o l i d a t e d Accounts - Murray Group H o l d i n g s Limited
-Hurrays Buroppax. Limited
Esmonds Motorb L i m i t e d
i vrohder w b t i L i O i t " ' t e ' 3 « J j u « h ®
S t o k e s Kennedy Crowley confirming t h e amount o f t h e l o a n s a t taje
end of t h e y e a r .

Yours sincerely,

R. Carroll. (ft). /j^jJ'

Enc... /

Murrays Europcar Ud. Director.: H. P. Murray (Chairman). R. Carroll F.C.A.. H. T. Murray. M.S. Qil.anan. J. Smith. 0
Ragislarad In Ireland. R«fll«lratlon No. 49886.
Appendix XV (153) (1) (j)
 ^ ^ • • . this torm nas oeen approveu uy.uie nuuiutc ui u w i w i s u
Irish Banks' Standing mmittee and the Northern Ireland Bankers' ' tociation.

The Manager, Our ref: AJ OC [CM

fe&tefc (Bank)
JfaMCiStiA. (Branch)
Dear Sir,
r - (Name of cuitomer)
I/We have read this document and l/we authorise you to provide the information requested
herein in respect of the accounts of the above-named cuitomer and also to disclose the
number of Joint accounts, if any, to which the above-named customer Is party.
Please sendtotsintimatiori to ^audfofoKyfr
I Sfekgg fktQ. , St. St&iju+A Kr^LM . Z
Yours faithfully.

mhmmmnmmmin see—M—e«
Authorised Signature(s)
Dear Sir, i i
We report that at the close of business on* the records of this
branch showed:—

''•*-'•''"*••••>-1'-.--
Dm of Int
inter outlining postetfat above date (Note Bt'
Description of a/ra S/SX terms/ Balance DrJCr.
(Including deposit a/cs) Note A conditions of Est. Current
borrowing Interest - Account Peas
DrJCr. & othei lihacoy
£ • £
&»cjbcI /oo-v. 7ook \ssf*t
Onfollo/sS
o

..iif -4 j.-

Note A Where a 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 at law or on foot of a bank security document).
Note B The provision of this information may entail work and oastt. If the information is
not essential this request should be deleted.
2. FULL TITLES AND DATES OF CLOSURE OF ALL ACCOUNTS CLOSED DURING
PERIOD:
>tMMI»««**«l*W*IMfl>l

•N.8. Date to be inserted befarq form is sent to bank. C.2S (11/82)

T
r V .
Nature of tecurit\ ltd directly from customer (e.g. Deeds. Stoc Shares etc.).
Amount only of any guarantees held for the benefit of the customer.

M**t««IM»«««««MMMMI«*<MMMMMM«MtM*M***HM*««ntM** •MM«M>IMMMM*H««MM««tlM«MM«(Mm«MM«||(Mt«,#l

4. CONTINGENT LIABILITIES:
All known contingent liabilities
% Oate(i) Amount £
(a) Total of Bills discounted for your customer, with recourse
(b) Amounts and dates of each Guarantee, (axducfinfl Accept-
ances) Bond or Indemnity given to you by the customer.
(c) Amounts and date* of each Guarantee, (excluding Accept
i- ancas) Bond or Indemnity given by you on behalf of your
customer.
(d) Total of Bills drawn on and aceeptad by Bank on behalf of
customers (excluding (f) hereunder).
(e) Total Forward Foreign Exchange Contracts.
(fhTotsI -of - Outstanding- UabUitie«..Mnd^D9cun\S^rY,
Credits.
(g) Others — Please give details:

The information available at branch contained herein Vgtoen In confidence for your use*
only, in Yourcspsclty as Auditor(s) and without responsibility on the part of the Bank or
. any of Its officials* " -

Note: No information can or will be given which would disclose confidential Information
regarding other customers.

Signed— MMtMli Manager

IMMtWI* Date

Branch Brand

FormSBRI (1982)
528 (11782)
Appendix XV (153) (2) (a)
 Oil M I L SWEENEY
c i t o r s
r k,

The Earlsfort Centre,

Earlsfort Terrace,
STRICTLY PRIVATE & CONFIDENTIAL
Dublin 2, Ireland.
ADDRESSEE ONLY
The Inspectors Telephone 01-664 4200.
Third Floor Fax 01-664 4300.
Trident House Intl. Code +353-1
Blackrock EMail R@odonneilsweeney.ie
CO DUBLIN
OX 109 023 Dublin

Our Ref:
December 3, 2001 C/M18/NSPM NF/FF

our client: Harold T. Murray, The Leys, Glenamuck Road, Carrickmines,

Co. Dublin.
re: The late Mr. Harold F. Murray, deceased

Dear Sirs and Madam

We refer to your letter of the 25 th October, addressed to our above named client.
Our client has instructed us to write to you in response to the preliminary conclusion
that the late Mr. Murray (our client's father) was a client of Ansbacher.

Company loans

As our client has averred to on Affidavit, funds were paid out of the Companies for
the benefit of the Trust and thereafter ceased to be Company monies. The
Companies had no further beneficial interest, direct or indirect, in the monies except
in one respect. The principal shareholder of both Companies at that time was our
client's father, the late H.F. Murray. He was also a beneficiary of the Trust and was
influential in getting the Trusiees to see their way to placing certain Trust funds in
bank accounts, firstly, with Guinness & Mahon (Jersey) and later with Kredietbank,
as a result of which the Companies got slightly more favourable terms on borrowings
from the said banks.

Trust funds

You have already been furnished with a copy of the Trust document entered into by
the late Mr. Murray ("the Woodward Trust']. Under the Trust Deed and at law, the
Trustees of the Woodward Trust had full control over the funds held by them.

The Woodward Trust was set up by our client's father. Our client had no
involvement whatsoever in the establishment of the Trust. Nor did he have any
communication whatsoever with the Trustees at any time.

I 1/ 1 To i Norman ritegernld Francis Hackett Sean Greene

 NF/FF Page 2 of 2

Our client has quite openly acknowledged that it was his impression that his father
had considerable control over how the funds were administered. However, our client
has no knowledge whatsoever of the day to day operations of the Trust or of any
communications between his father and the Trustees.

We note that in reaching your conclusion that you seek to rely upon our client's
evidence and the documents attached to your memorandum. We see nothing in our
client's evidence or in the documents to suggest that the late Mr. Murray had any
right to override the specific provisions of the Trust Deed. Indeed, we note that you
accept that if, as you appear to maintain, funds were moved to Ansbacher Cayman,
this was done without the late Mr Murray's knowledge. This is consistent with the
trustees having control over the funds and not the late Mr Murray. In our submission,
you have absolutely no evidence that Mr. Murray had any role in relation to the Trust,
other than to request the Trustees to consider applying funds in a particular manner
(a request which the Trustees could at their discretion either refuse or go along with).
With respect, you appear to be concluding that the Trust Deed was effectively a
"sham". Such a conclusion requires you, with respect, to make assumptions and
suppositions not based on any evidence before you. We respectfully submit,
therefore, that for you to reach the conclusion which you propose requires you to
unreasonably stretch the facts before you.

Given the above and bearing in mind the very serious and damaging effect that
pubiication of the late Mr. Murray's name as "a client of Ansbacher" would have on
the reputation and standing of the late Mr. Murray and his family, it is our opinion that
you are not entitled to form the conclusion which you propose. Please note that if
you proceed to form this conclusion and include same in your report to the Minister,
our client reserves the right to issue judicial review proceedings against you and any
other proceedings as Counsel may advise.

Yours faithfully

O'DONNELL SWEENEY
Appendix XV (154) Mr Brian Rhatigan
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Brian Rhatigan.

a) Guinness and Mahon statement of 20 November 1992 - GMCT re

College.

b) Internal Guinness and Mahon memo of 25 May 1977.

c) Extract from credit committee minute of 26 October 1977.

d) List of companies, furnished by Mr Brian Rhatigan, with which he was

associated.

e) Extract from Guinness and Mahon executive directors meeting of 29 June

1977.

f) Extract from credit committee minute of 31 May 1977.

g) Extract from Guinness and Mahon banking report dated July 1985.

h) Extract from Guinness and Mahon banking report dated May 1988.

i) Extract from Guinness and Mahon credit committee minute of 25 October

1978.

J) Extract from Central Bank Report on Guinness and Mahon dated 1978.
Appendix XV (154) (1) (a)
 tlAHMMirf tfiI.>r||ft
"2+M GUINNESS+MAHON LTI
«RCT C«LU«T CALL t7Ca*^«0«—"Outilli»2P0 Ow56AT«irv«,». in*,
<CtCM.«

IUNM> itmtNk
kITI'HAl. CAC1.
•CPOStl LEDGER IWtMWIUI iONaviZ

C
Appendix XV (154) ( l ) ( b )
 IS )r|T7.

Brian RhaHflan, & q u W » - EXTENSION

Amounh £15,000
Tame Extwialonof 3 monthsto30/9/97
Ratat 15£% fixed
Drawdown: By way oftiuctuatfnsoverdraft. (fVawmtfierfanca£12,530.)
Security: "Suitably Sacrured".,
Rovlaw: 30/9/77
RMonimmdad •
Brian Rhallgait/ Esqulr* - EXTENSIONi

» W)
Appendix XV (154) (1) (c)
 Minutes or the 148 th Meeting of ttw
Banking /Credit Committal hetd at 17
College Green, Dublin 2, en Wednesday
24th October, 1977.

J. D. T. - M. E. O'K. - M. J. P. - GMbC - P. O'D. - BMeL. - M. C. K. -

I. W. K.

MONEY MARKETi

unit

Anthony & Brian Rhatfgan:

Amount: £5,000
Purpose: Guarantee required by Ulster Bank Ltd.
Ranelogh.
CcmtnlljiMJtt FM> £50
Sultdily Stenrwl.
Saeurily:

R«eoimwnd«d»

Im

I-
nlsai

Aj^. t a
-'. >
Appendix XV (154) ( l ) ( d )
r\

-"Rhatigan Holdings Limited

•PAR Holdings limited
•Brookfidd Securities limited
•ftledusa Securities limited
•pakley Securities Limited
•Spacemate Ireland Limited
•Ardiff Securities limited'
^Bd-Odi Holdings limited
•Townhold limited
Wantu Securities Limited -
•''Rhatigan Developments limited
•York Securities limited
•Management Group limited
•Starling Securities Limited
•Tarstone Limited
•"Keansburgh Limited
Appendix XV (154) (1) (e)

T
Appendix XV (154) (1) (f)
r

145U M t d m Saeurttto Ltahocb

Thli loan'to Hm abovo nmHanad, which b eohtrolUd bytf»Rhcstfgan Brat.

TrvoIvm a total of £140,000 and will U provided by <3. M. &Co.
In tha moanHme, wa hem bMn mkad to prevfchi £83,000 unHI th* «id of
Jmm, 1977.
DIfformHa/ 2 % - Suitably Saeurad.
Approved. 1
»v »
Appendix XV (154) ( l ) ( g )
 HAMONO REPORT - JULY 1885

LOANS

VT« iMUod a qmrantM for £100,000 laftwourof Irtah

Ufa A m m t i on bthalf of Rh»tlgmn Holding! Limited
Mid ractttved c»ih In exchange.

•s
Appendix XV (154) ( l ) ( h )
 ncsrr xARrrr:

M B B fc
ovmamrxB:

" ~ - ' " *• b*T« lnraad m

a gnaraatM fw £LSO,000 la tvnae at A.X.X.B.
(atarlla* SwmrltlM - Brian ft Tony B b a t l m ) 1
to ba JaSSS^JbUlfllk ** Zndcamltjr for &5GOA>

KUIOO ^
nnuiRai;
Appendix XV (154) (1) (i)
 Minutes of the 249th Meeting of the
Banklrm/tZrsdit Committee held at
17 College Green, Dublin 2, on
Wednesday 25th October, 1978.

M. E. O'K. - M. J. P. - GMcC. - P. J. F. - P. O'D. - I.W.K. - M. C. K.

Oakley Securities Ltd:

Amount: £70,000
Purpose: Working capital
•A
1 year
Term:
2% over bate
Rate:
Joint and Several Guarantee A. & B. Rhatigan and
Security: hypothecated deposits in name of Par & Brl-odl
Holdings to extent of £40K.
Recommended.

Signed//** ^ O ^ * ^
mr
Dated -%.-\' *>
Appendix XV (154) (1) (j)
(rf) Ardlff 5«airttt«a - Balancs 11,809,000
Cwpany which owni tha South County Hotal. DIM of tha directors ftf the eoopany
has deposits of S3 million with tha bank through another conpaqy on which th«
bink has • latter of undertaking. Th* bank wtll obtain a charge on th® Hotel.
Appendix XV (155) Mrs Margaret Clifford
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to
Mrs Margaret Clifford.

a) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

b) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

c) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

d) Letter of 21 February 2001 and enclosures fronr Mr Stakelum to

Inspectors.

e) Guinness and Mahon credit memo of 3 May 1985.

f) Letter of 3 May 1985 - Guinness and Mahon to Princes Investments

Limited.

g) Guinness and Mahon credit memo of 7 May 1985.

h) Letter of 10 April 1975 - Guinness and Mahon to Princes Investments

Limited.

i) Letter of 21 December 2001 - Downing Courtney & Larkin to Inspectors.

2. Correspondence received from or on behalf of Mrs Margaret Clifford.

a) Letter of 7 February 2002 - Downing Courtney & Larkin to Inspectors.

Appendix XV (155) (1) (a)
When d i d t h a t start?

I am i n c l i n e d t o b e l i e v e 1976 b u t i t m i g h t h a v e been

1977. I w o u l d h a v e s t a r t e d on my own i n l a t e 1975.

I o n l y had one y e a r of o p e r a t i o n s i n 1975.

Would y o u t e l l u s w h a t t h e a r r a n g e m e n t i n a general

way was w i t h Mr. T r a y n o r . How was t h i s service

operated?
 1 A. I f I can t a k e a t y p i c a l example/ a c l i e n t may h a v e
2 a s k e d me t o l o o k a f t e r funds t h a t i n almost all

3 c a s e s t h a t I am a w a r e o f w e r e a l r e a d y abroad.

4 I would h a v e a s k e d Mr. T r a y n o r t o a d v i s e me w h e r e

5 t h e funds might be t r a n s f e r r e d to, and t h e n the

6 c l i e n t w o u l d i s s u e i n s t r u c t i o n s when I g o t the

7 t r a c k i n g r o u t e o r a c c o u n t name o r c o d e o r w h a t e v e r

8 they might be.

9 Q. C o u l d you n o t b e a l i t t l e b i t more s p e c i f i c because

10 you know t h e s e t e r m s , I d o n ' t know. Would y o u m i n d

11 e x p l a i n i n g them t o u s ?

12 A. I f t h e c l i e n t w i s h e d t o p l a c e t h e f u n d s w i t h me a n d
13 t h e y w e r e i n some R o y a l Bank o f S c o t l a n d i n Jersey
14 or wherever.
15 Q. T h i s i s c l i e n t ' s of yours?
16 A. Yes.
17 Q. Why w o u l d t h e y w a n t t o p l a c e t h e i r f u n d s w i t h y o u ?
18 A. They m i g h t b e u n h a p p y a b o u t m o n i t o r i n g t h e f u n d s in

19 t h e s e n s e of. w h a t i n t e r e s t rate...(INTERJECTION).

20 Q. But you w e r e n o t a b a n k ?
21 A. No.
22 Q. They w e r e a s k i n g y o u r a d v i c e a s t o w h e r e t o p u t the
23 funds?
24 A. They w e r e a s k i n g me w h e t h e r I c o u l d m o n i t o r those
25 f u n d s on t h e i r behalf.
26 Q. M o n i t o r i s a word you u s e ; I d o n ' t u n d e r s t a n d it.
27 Your c l i e n t s h a v e f u n d s a n d t h e y come i n t o you.
28 What do t h e y a s k you t o do?
29 A. They w o u l d s a y 'We h a v e f u n d s o f f s h o r e ' wherever

31
 n

1 t h e y m i g h t h a v e been. 'Can you l o o k a f t e r t h e s e f u n d s

2 for me.'
3 155 Q. "Can you l o o k a f t e r t h e s e f u n d s . " What d i d that

4 mean?

5 A. Would you e n d e a v o u r t o g e t t h e b e s t i n t e r e s t rate.

6 Would you m o n i t o r t h e f u n d s . '
7 156 Q. Take i t s l o w l y . Would you e n d e a v o u r t o g e t t h e best
8 interest rate. Were t h e y a s k i n g you t o c h a n g e
/-N 9 where t h e i r f u n d s were i n t o some o t h e r financial

10 institution?
11 A. I d o n ' t t h i n k t h e y would come i n and s a y 'We h a v e
12 funds. W i l l you c h a n g e them f o r some o t h e r
13 financial institution.' I t h i n k a d i s c u s s i o n would
.14 h a v e a r o s e w i t h them t h a t t h e y would h a v e a d v i s e d me

15 t h a t t h e y had £X i n f u n d s a n d s a y ' C a n you l o o k

16 a f t e r t h e s e funds on my b e h a l f . •
17 157 Q. What d o e s t h a t mean?
18 A. I t . m e a n s t h a t t h e y m i g h t n o t want t o correspond
19 d i r e c t l y w i t h whatever f o r e i g n bank t h e y were u s i n g .
^ 20 They m i g h t n o t want t o g e t m a i l r e c e i v e d from

21 f o r e i g n b a n k s on t h e b a s i s of m o n t h l y s t a t e m e n t s .
22 They w o u l d n ' t f e e l t h a t n e c e s s a r i l y c o m p e t e n t a b o u t
23 l o o k i n g a t w h e t h e r t h e funds s h o u l d b e p l a c e d
24 o n e month o r t h r e e months o r s i x m o n t h s . And t h a t
25 t h e y would l i k e me t o l o o k a f t e r t h o s e factors.
26 158 Q. What d i d you do t h e n ?
27 A. I would p r o b a b l y a d v i s e them a t some s t a g e that
28 t h e r e would b e a f a c i l i t y available through
29 G u i n n e s s & Mahon.
 1 Q. You t h e n c o n t a c t e d G u i n n e s s & Mahon?
2 A. Yes.
3 Q. You u s e d t h e word " f a c i l i t y . " What d o e s t h a t mean
4 in this connection?

5 A. I t means I would p r o b a b l y h a v e contacted

6 Des T r a y n o r . I would h a v e s a i d ' I h a v e a client
7 — f o r t h e m o s t p a r t he w o u l d n ' t know who my c l i e n t s
8 were — t h a t w i s h e s t o have funds m o n i t o r e d abroad

9 by me.'

10 Q. D o n ' t u s e d t h e word " m o n i t o r e d " b e c a u s e I don't

11 u n d e r s t a n d what i t means. You h a v e a client.

12 What i s h e t o do?

13 A. Des T r a y n o r i s t o g i v e me an a c c o u n t number, a
14 reference, a b a n k where t h e c l i e n t who w o u l d h a v e
15 t h e f u n d s would h a v e t o g i v e i n s t r u c t i o n s t o his
16 b a n k t o h a v e t h e f u n d s moved. Those funds —

17 I d o n ' t understand t h e s e t h i n g s e i t h e r — might be

18 moved t o a r e c e i v i n g b a n k .

19 Q. This i s very important. I f you d o n ' t u n d e r s t a n d it,

20 I u n d e r s t a n d even l e s s . Let us take a t y p i c a l
21 c l i e n t w i t h funds i n J e r s e y . You t e l l Mr. Traynor
22 that this client is dissatisfied. What d o e s
23 Mr. T r a y n o r t h e n do?
24 A. He g i v e s me c o d e d r e f e r e n c e s . I d o n ' t remember b u t
25 i t might well be a reference t o a bank account in

26 London f o r s o and s o , f o r t h e a c c o u n t o f s o a n d s o .

27 Q. What was t h e b a n k ?

28 A. Mr. C o s t e l l o , I d o n ' t remember and I am s u r e those

29 i n s t r u c t i o n s would h a v e v a r i e d o v e r t h e years.
•V

1 164 Q. What was t h e a c c o u n t , i n whose name was t h e account

2 t o be placed?
3 A. I have a d i f f i c u l t y answering t h a t question, not
4 w a n t i n g t o be u n c o o p e r a t i v e . A l l I am s a y i n g is

5 t h a t Mr. T r a y n o r would be s e e k i n g t o g e t t h e f u n d s

6 u n d e r h i s c o n t r o l and t h e r e i s a t r a n s f e r process.

7 165 Q. You m u s t h a v e known t h e f i n a n c i a l i n s t i t u t i o n in

8 w h i c h y o u r c l i e n t s ' s f u n d s were g o i n g t o b e p l a c e d ?
9 A. The o n l y a n s w e r I c a n g i v e t o t h a t i s I d o n ' t recall
10 because over the years they probably used d i f f e r e n t
11 financial institutions.

12 166 Q. T e l l me some of them t h a t were u s e d t h a t

13 Mr. T r a y n o r would h a v e t o l d you a b o u t . G i v e me t h e

14 names of some of t h o s e , Mr. Stakelum?

15 A. I t i s very d i f f i c u l t under o a t h , b u t l e t u s try

16 G u i n n e s s & Mahon London f o r a s t a r t . I d o n ' t know.

17 But i f i t was G u i n n e s s & Mahon London, i t would

18 p r o b a b l y b e a c c o u n t of s o a n d s o , r e f e r e n c e so and

19 -so-etc. e t c . . But I am n o t a b s o l u t e l y p o s i t i v e of.,

20 that. I t c o u l d a l s o v a r y d e p e n d i n g on t h e currency.

21 I f i t was d o l l a r s i t m i g h t b e s o m e t h i n g else.

22 167 Q. What o t h e r f i n a n c i a l i n s t i t u t i o n d i d he t e l l you

23 t h a t t h e money was g o i n g t o b e d e p o s i t e d i n ?
24 A. I d o n ' t know, I j u s t d o n ' t know. I t would b e a
25 once-off instruction. I d o n ' t know. It probably
26 would d e p e n d on where t h e f u n d s were coming from
27 too.
28 168 Q. Do y o u r b e s t . I am s u r e you a r e u n d e r strain,
29 Mr. S t a k e l u m . T e l l me t h e numbers of other
34
 1 i n s t i t u t i o n s t h a t c l i e n t s of y o u r s h a d money
2 d e p o s i t e d as a r e s u l t of your c o n t a c t with
3 Mr. Traynor?

4 I j u s t cannot answer t h a t . That i s not wanting to

5 be uncooperative, I j u s t cannot remember.

6 Why c a n ' t you remember?

7 How do I a n s w e r a q u e s t i o n o f why I c a n n o t remember?

8 For example, were any of t h e funds lodged i n any of

9 t h e G u i n n e s s & Mahon s u b s i d i a r i e s i n Cayman o r in

10 t h e Channel Islands?

11 I don't think so. But I t h i n k t h e f u n d s w o u l d b e

12 i n i t i a l l y l o d g e d somewhere maybe f o r t h e a c c o u n t of
13 G u i n n e s s Mahon Cayman, r e f e r e n c e number s o a n d s o ,
14 maybe f o r t h e a c c o u n t i n G u i n n e s s & Mahon London f o r
15 G u i n n e s s & Mahon D u b l i n . I am n o t t o o sure.
16 You w o u l d g e t s p e c i f i c instructions.
17 I t may h a v e b e e n t h e a c c o u n t o f G u i n n e s s & Mahon i n
18 D u b l i n o r G u i n n e s s & Mahon i n London. Was t h i s the
19 offshore b a n k we a r e t a l k i n g . . . a b o u t , G u i n n e s s & Mahon
20 Cayman T r u s t , t h e A n s b a c h e r b a n k . They w o u l d h a v e
21 been lodged i n i t s account i n Dublin or lodged in
22 i t s a c c o u n t i n London?
23 I t may w e l l h a v e b e e n , I d o n ' t remember.
24 But you a r e u n d e r o a t h now?
25 That's right.
26 You a r e u n d e r o a t h . Can you s a y t h a t f u n d s your
27 c l i e n t h a d a s k e d you i n r e l a t i o n t o a s s i s t a n c e were
28 l o d g e d i n an a c c o u n t i n t h e name o f G u i n n e s s Mahon
29 Cayman T r u s t i n D u b l i n o r i n London?
35
 1 A. I c a n n o t remember. I s u s p e c t t h a t some o f the

2 i n s t r u c t i o n s g i v e n a t t h e t i m e would b e what was at

3 the best r e q u i r e m e n t s o f t h e G u i n n e s s & Mahon b a n k ,

4 what t h e i r i n t e r n a l ...(INTERJECTION).

5 174 Q. A few m i n u t e s a g o y o u t o s a i d t o me t h a t y o u g a v e

6 Mr. T r a y n o r i n s t r u c t i o n s a n d t h a t y o u transferred

7 funds t o him and t h e y were t r a n s f e r r e d offshore, is

8 t h a t not r i g h t . D i d n ' t y o u s a y t h a t t o me a few

9 minutes ago?

10 A. They were p r o b a b l y o f f s h o r e already. I t h o u g h t we

11 were t a l k i n g about a client...(INTERJECTION).

12 175 Q. They were o f f s h o r e a l r e a d y you think?

13 A. Yes, most of t h e funds were o f f s h o r e already.

14 176 Q. A l l t h e f u n d s o f t h e s e c l i e n t s we a r e t a l k i n g about

15 were offshore. Did you e v e r have c l i e n t s coming in

16 t o you w i t h funds t h a t w e r e n ' t offshore?

17 A. Yes.

18 177 Q. What w o u l d h a p p e n then?

19 A. •At d i f f e r e n t 3tages,- in t h e early stages I think

20 I r i s h pounds could be c o n v e r t e d w i t h o u t any problem

21 into Sterling. It i s o n e a n d t h e same i n the

22 1970's. T h e n - t h e y c o u l d b e moved f r o m Sterling.

23 178 Q. Were t h e y p u t o f f s h o r e , t h e funds?

24 A. Yes.

25 179 Q. Where?

26 A. A l l I know i s t h a t w i t h Des T r a y n o r I w o u l d h a v e
27 a s s u m e d G u i n n e s s Mahon Cayman T r u s t , later

28 Ansbacher. But i t could w e l l have been

29 C o l l e g e T r u s t e e s o r G u i n n e s s & Mahon G u e r n s e y ,
 1 180 Q. One o r t h e other?

2 A. Y e s , I assume one o r t h e other.

3 181 Q. Did any of y o u r c l i e n t s t o y o u r knowledge establish

4 t r u s t s w i t h t h e a s s i s t a n c e o f G u i n n e s s & Mahon w i t h

5 Mr. T r a y n o r e i t h e r i n t h e Cayman I s l a n d s o r i n the

6 Channel Islands?
7 A. Not t o my k n o w l e d g e .
8 182 Q. None of them t o l d you t h a t t h e y h a d d o n e this?

9 A. No.
10 183 Q. Mr. T r a y n o r d i d n ' t t e l l you t h a t h e was g o i n g t o
11 s u g g e s t t h i s t o them?
12 A. No.
13 184 Q. You a r e p r e t t y c e r t a i n on t h a t o r a r e you d o u b t f u l
14 about it?
15 A. I am n o t a w a r e c e r t a i n l y of a n y c l i e n t s that
16 e s t a b l i s h e d such t r u s t s . I am n o t a w a r e o f any
17 that did.
18 185 Q. If they d i d n ' t e s t a b l i s h t r u s t s , you a r e a w a r e o f
19 c l i e n t s who t r a n s f e r r e d funds offshore?
20 A. Yes, t h a t ' s right.
21 186 Q. We w i l l b r e a k now f o r a c u p of c o f f e e ,
22 Mr. S t a k e l u m , f o r a b o u t t e n m i n u t e s o r so.
23
24 SHORT ADJOOTOiaflBW?
25

26
27
28
29
Appendix XV (155) (1) (b)
OurRef: C/S10/NM $ 1} i>'bl ,.' ;.

18* October 2000

Mr. Jack Stakelum ?

"Fairmont?' {
Ballyronan Road
KHpedder
Co. Widdow
Strictly Private A Confidential -Addressee Only
Dear Sir
I refer to your letter of 11 October 2000, and I reply an my own behalf, and on behalf of ray
colleagues,
* Mr. Justice Declan Costdlo andMr. Paul Rowan.
We now wish, to examine you under oath concerning the matters set out in our two letters dated
30 August 2000 and 21 September 2000. To that'end, I propose that an interview would take
place in our offices at the above address, either an Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor at the above
phone numbertoconfirm either date, or to make mutually conveoieit alternative arrangements if
Ihose dates do not suit you.
We note your refusal toprovide us with names of your clients priortoexamination. I must point
out to you that you are obliged by law to provide us with die information we have required of
you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of the Companies Act 1990 imposes a duly upon you to
comply with our requirement, and, in the case of a refusal to do so, mfces provision for the
matter to be dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
cheats who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
relation to the transfer of funds to eilher of those islands. We require this information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidious to disclose the identity of your clients. Once again, I must
point out to you that you are obligedtodo so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain diem.
Yours faithfully

y'iv/k'v. -
Appendix XV (155) (1) (c)
1 T
il I.I In* "FAIRMONT"
JACK STAKELUM
BALLYRONAN ROAD

JS 11II
CHARTBKBD ACCOUNTANT
TELEPHONE: 2810646 PAX: 2810645
MOBILE: 087 2854660
.
KILPEDDER
CO. WICKLOW

in i

The Inspectors
3* Floor
Trident House m . AO*
Blackrock

6 November, 2000

Dear Sirs,
Withreference to your letter of the 18® October, and in particular the third
paragraph, I should point out that I did sot refUse as such to provide the infbrmatiaa in
question, merely that I should be afforded the opportunity to argue why I should not be
asked to divulge such information. The persons in question dealt with me on an
understanding of confidentiality, and as the Inspectors will sorely appreciate, it is difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point outforcefully in your letter, you are not prepared to allow
me that opportunity and you have referred to the legal position. In the circumstances, I
attach a list of the names and addresses of the persons in questioa
Yours fiiithfiUly,

End;

V.A.T. Numb«r2854485K
 6 ->0^

waibm CBfford, c/o Vigo Lodge, The Spa, Tralee, Co. Kerry (deceased)

a 14.
Appendix XV (155) (1) (d)
 JOHN J. STAKELUM
"Fairmont"
Ballyronan Road,
Kilpedder, Co. Wicklow.

21 February 2001.

The High Court Inspectors, 8 JBtt

3 r d Floor,
Trident House,
Blackrock,
Co. Dublin.
R « Interviews with the Inspector on 8/11/2000 and 6/12/2000.

Dear Inspectors,

The content in sections 1 and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000.
 1. The Consnltancy Busiiess I set op in 1975.
•

In December 1975 I decided to set up a business that would provide a general financial
Consultancy service to clients. I had identified the market need in Haughey Bo land & Conqpany
during my auditing work but more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided tofocus on were:

• Preparation of properly assembled requestsfor financing from banks.

• Preparation of well constructed projected cash flow and profit and loss statements.
• Accompanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
for the timely production of them.
• Being a sounding board for all kinds of operating issues - both problems and perceived
oppoxtumtcs.
• Guidance on wheretogo and howtorequest professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Acting for clients in the purchase ox sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in the name of Business
Enterprises Limitedfrom December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful. Typically, it occupied well over 100% of 50-
hour weeks.
2. The service I gavetopersons who wished to holdfond* ofbhore.

Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards this my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
• I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
• I would neither issue" nor obtain receipts for movements in funds. Neither would I keep any
ledger recprds, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge Was envisaged for this service but over time it became necessary to
recover costs on a case by case basis.

My operating procedurefor this service bad butfour components:

• •

• A deposit account in G&M that I have described as a hotchpotch account.

• A manual memorandum record I kept in my office under my personal controL
• Afloat account in AIB.
• A monthly reconciliation of the sum of the memorandum records with the sum of the
accounts) in G&M and anyfloat balances.
In the interest of completeness perhaps I should add also:

• G&M would be aware of the total funds I had in my hotchpotch account

• G&M would not be aware of the names of the depositors whose funds, in aggregate,
comprised the balance in the hotchpotch account albeit that a name and an amount could
surface as part of another business transaction with the bank, e.g. a back-to-back ban.
• Some of my clients would be aware generally that the funds they held offehore were in a
G&M vehicle. Other clients would be aware that their funds were offshore but would have
no awareness or care about the name of the bank in which their money was deposited.
• Only I knew the names in the memorandum account and only I knew the ownership of the
balance in thefloat account kept in AIB.
5. The information requested by Ms. Mackey on the 6 December 2000.

The information requested by Ms. Mackey on 6 December' 2000 is given in the three schedules
that are appended to this letter.
Schedule 1relatesto the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had offehore deposits in G&M through my procedure.

Yours sincerely,
 SCHEDULE 1

Name. Offshore Back to Date Deposit Date Deposit Source of Funds Souroe of Funds
Deposits Back loan. Opened Dosed Offshore Irish Pounds.

William Clifford. Yes. No. Clrea 1976. On death-early 80s.

By wife c. 1887/88. AH. None.
Appendix XV (155) (1) (e)
 NAME : Prtacat laveacmen Llalted. Cradle
t mitt** *r • wo
1,
ADDRESS : c/o, Builnesa Enterprlie* Ualtac Equity Btaka: '
17, Clyde Roe* BalWbrUia, Oul
BUSINESS / _
OCCUPATION ; Company. DM* » °toNM
THB APPLICATION : liiwifVrlHiyit^eillWabiMMifcAiMWMBu/ Ettaarton /ftwlacttw
I Delate M appropriate)
AMOUNT .•HIHUM RATE i ,111% ,««*..., FEB t

PURPOSE / DRAWDOWN : If mm or lacraaaad

Working capital panalttad yritr to
comptatiai of neuiity T
YES / MBu

TERM OF FACILITIES : REVIEW DATES t

ftttanaloa for one year. SLUMS.
SOURCE o r REPAYMENT S •

Cadi Flow.
SECURITY J If addUioaal or
facility, la aacnrity in
Guarantee J. J. Qyraa aadmm
ThoClifford. order f
VES/ttt
If Na^ 0m dKall*

BACKGROUND NOTE /
OUTUMB OT PROPOSAL t
Guarantor. m w H kaova to Outmeaa • IUmn andtotin* eaeefeetecwity
to nrwHend ulttiilti. •

RELATED FACIUTUS /
BORROWERSt
i&SL

Total Expotura : CUM,M& Data

New Umlt(s) Recorded by i Data t

Security In orderforDrtwdewa t CLM. * Cab ( If o«ar CI* total
e^psaur*)
Data:
Appendix XV (155) (1) (f)
 G U I N N E S S + M A H O N LTD
< m 1? M h f t IMMa > P.O. tai HA Tili 7MM4 BO kkat)

Our Raft FCD/BC 3rd May. INS.

The Secretary,
do, B n t a w Enterprises Limited,
IT, Clyde Road,
BaltebrMga,
DUBLH 4

Oaar Sir.
Wa art plseeed to confirm that we ara prepered to a*land your
facility for a further period subject to the (ollowlttg lanae and conditlonc-

Prinees Investments Limited.

iua0,00a00 (One Hundred and Eighty Thousand
Pounds) - Starling £
Purpose: Tbe fundi k m already been placed at your
dUpoaal In the form of working capital.
Tana: hi accordance with nornal banking practice
all fundi taken up ara repayable on demand
but In aay case not later (hen 31st May, IMS.
Inturoat: Wa propose to continue charging Interest at
a find rata of 1Mb per annum. Interest win
be debited en your account and become payable
by you en the usual quarterly dates and at
maturity of the loan.
Security: As security for the loan wa M l retain the
guarantee signed by ]. J. Byrne end Thomas
CUfford.

•
 -a
We «re pleeeed to be of mlttanca to YOU end «HC1OM herewith
• copy of tW* facility latter for l i p e t a n by year auhorlmd tignatortae
and return thereby confirming yopr aocaptenca of thn loan on the term mentioned.
We ihall require a copy of a Beard Raaolatlon aathorliing the cantbmad
borrowing;
Yoon falthNfr,
farOUMNEM * MAHON LMTED. '

Pat OTJwyer,

TTRTTSSBr

i
Appendix XV (155) (1) (g)
 vm

tiao.ooo.
/**
I ar
" *'fl8 Capital.
e
«*»'onforonomr. 00X899
I* fix*.
irtm.

r i : . • — —

PURPOSE / DRAWDOWN: II h w or Incrnaaed

fadllttes, la diwwlawn
Working capital prtof to
rnainlatloe nf aecnritv ?
WMpmiftni VVB f e e w i i |

YES f MQoc .

TERM OT PACSUITTES > RHVBEW DATES :

a.
EKtaaaloa for •na jar. 3ULM8S.
SOURCE OT REPAYMENT i
Caall Flow.

SECURITY i If nddltionnl or exittlng

tefUty, la security Jn
Guarantee J. J. Byrne and Tin• a s CUfford. ordar t
YES t Mfc
If No, live detail*
•eparateqr.

BACKGROUND HOTS /
OUTLINE Of" PROPOSAL i

?miMS* •**" k n o w l
* Mate* sad la thia eaae tfae security
is considered adequate.

RELATED rAOUTttS /
BORROWERSl
Z T - J t e T L W ' r
tr
Reetauaanded
IMlftRP,

Total Exposure t 1180,000. MlmirfCftr" *-

. aw Unit(s) Recorded by t — D a t e i >nMMHHU .
Approved
:urlty in order lor Drawdown i ,.. OJM. * Ca, ( If over <lm total
egoiure)
Date t mmmmmmnm.
'ArmmmI tw > . n*t» !
Appendix XV (155) (1) (h)
GUINNESS & MAHON U"?
V W 1 I mmmmmmt» a»

17. COLLEGE GREEN,

DUBLIN. 2.
P.O.BOX SSA.
REGISTERED OFFICE.

ma. NO II
Our Ref: PO'D/MR. 10th April, 19-75.

The Secretary,
Princes Investments Llalted,
60/62, Aniens Street,
DUBLIN 1.

Dear Sir,
On the instructions of Mr. Traynor, we write to confirm that
we are prepared to make available to you a facility, subject to the
following terms and conditions:
(1) Maximum Amount: £116,000 (One Hundred and Sixteen Thousand
Pounds).
(3) Term: All funds advanced are repayable on demand
but In any case not later than the 6th
March, 1976.
(3) Drawdown: The funds have already been taken up.
(4) Interest: Ve propose charging interest on the facility
at 11$% per annum. Interest will be
debited by us to the Account on the 30th
Jtone, 30th September and 31st December
annually and at maturity of the Loan. Ve
shall apply to you immediately after the
aforementioned dates for payment of interest
(5) Security: As security, we shall require a Form of
Guarantee signed by Mr. J. J. Byrne, Mr.
William Clifford and Mr. Thomas Clifford.
The relative Form of Guarantee is enclosed
for completion and return at your earliest
convenience.

Continued ...
 CONTINUATION SHC8T NO ' 1.

(6) Reserve If there shall be any increase in the cost

Requirements: to ue of making or maintaining the Loan by
an amount which we deea material resulting
from any changes In the reserve or
liquidity requirements to which this Bank
is or aay be subjected, then we shall be
entitled to call for payaent of additional
interest of such amount as we shall certify
as the amount required to compensate us for
such increased coat with effect froa the
date of notification. Too shall be at
liberty within one nonth lifter such
notification and without payaent of any
premium or penalty to repay the full aaount
of the Loan outstanding together with lnteree-
at the rate applying prior to notification.
Ve enclose herewith a copy of this facility letter for signature
by your authorised signatories and return in due eouree, thereby
oonfiraint acceptance of the facility on the terms stated. Ve shall
also require a copy of a Board Resolution confirming the borrowing.
Ve also enclose a Form of Mandate and Signature Cards for completion
and return covering the operation of a Banking Account. Vhen
returning the aforementioned documents to us, perhaps, you would also
kindly arrange to let us have a copy of your Memorandum k Articles
of Association together with a photocopy of the Certificate of
Incorporation.
Tours faithfully
for GUXHN8SSfcMASON LIMITBD

t
P. O'Dwyer,
Loans Officer.
16

B. J. MoLoughlin,
.Authorised Signatory.
i
Accented on behalf of Princes XnveetmentgJ^imited • / t
J/J£UitJ..K.<M&W.
William Clifford ^ Thoma»<*£lify'ord
Appendix XV (155) (1) (i)
 cs.

DOWNING, COURTNEY & LARKIN

SOLICITORS
(INC. EUGENE DOWNING * CO.. AND DONAL J. COURTNEY)
84, NEW STREET, KILLARNEY
MICHAEL C. LARKIN. (CI.. LLJL. NOTAHY IUHJC CO. KERRY, IRELAND kmrkOfrt: KENMAKE.
Mfc OtkK 24 UPPER ORMOND QUAY.
MAURICE COFFEY. a.Ct_ U.B. TEL. 064-31061. DUBLIN 7.
E-malt: info@downingslaw.com V.A.T. Reg. No. I.E. 0092115L.
DX 51006 KILLARNEY
FAX. 064-33934.

Our Ref: MCL.MB.M 21 December 2001

YourRef: C/C23/NSPM

Re: Mrs. Margaret Clifford. Vigo Lodge. The Spa. Tralee. Co. Kerry.
Dear Sirs, '* '•
We act on behalf of the above named who has passed us your letter of the 14th
December and received by her on the 19th idem.
Our Client does not question the obligations placed on you or your statutory
powers.
Our Client has no information concerning the affairs of the Company and we set
out hereunder such information as may be of assistance, though same does not directly refer
to it.

Our Client's dcceascd husband, Mr. William CUfford, had certain funds
invested with Mr. Jack Stakelum. She was unaware of the existence of such funds until after
his death in 1981. Mr. Stakelum continued to hold the funds until the mid 1990's - perhaps
1993/1994. During the interim period, our client was advised by Mr. Stakelum that the fUnds
were held off shore, but at no time did he specify where they were held.

Further our Client holds no documentation in respect of such accounts and

presumes that such documentation as exists is held by Mr. Stakelum. Our client never dealt
directly with the funds and same continued under the control of Mr. Stakelum until same
were repatriated in or about March 1994 and the Revenue Commissioners were advised of the
funds at that time.

Our Client is not in a position to assist you tier and she trusts that this letter
will suffice as providing such information and documents fee, holds in her custody or
within her power to provide.
Yours

Downing, Larkin
Office of the Inspectors Appointed By
Order of the High Court To Ansbacher
(Cayman) Limited,
3 r d Floor,
Trident House,
Blackrock, CO. DUBLIN

T
Appendix XV (155) (2) (a)
 DOWNING, COURTNEY & LARKIN
SOLICITORS
(INC. E U G E N E D O W N I N G & CO., A N D D O N A L J. C O U R T N E Y )

84, NEW STREET, KILLARNEY

M I C H A E L C. L A R K I N , B.C.L.. LL.B.. NOTARY PUBLIC Branch Offer KENMARE.
CO. KERRY, IRELAND Dublin Office: 24 UPPER ORMOND QUAY.
MAURICE COFFEY, B C.L.. LL.B. TEL. 064-31061. DUBLIN 7.

E-mail: info@downingslaw.com V.A.T. Reg. No. I.E. 0092115L.

DX 51 006 KILLARNEY
FAX. 064-33934.

Our Ref: MCL.MB.M 07 February 2002

Your Ref: C/C31/NSPM

Re: Mrs. Margaret Clifford, Vigo Lodge. The Spa, Tralee, Co. Kerry.

Dear Sirs,

Your letter of the 15 th January addressed to Mrs. Margaret Clifford has been
passed to us with instructions to reply thereto.

As set out in our letter to you of the 21 st December last, our Client was unaware of
the existence of the funds invested with Mr. Stakelum until after the death of her Husband,
Mr. William Clifford. She cannot say if her late Husband was aware of where the funds were
invested, but it appearsfrom Mr. Stakelum's evidence that it is more likely that he was not so
aware.

Insofar as Mrs. Clifford was an unwitting beneficiary of these funds and had no
input into the operation of the same, it is unjust to name her as a Client of Ansbacher and to
do so will certainly be adverse to her good name and reputation.

Natural justice should surely dictate that our Client not be named as an Ansbacher
Account Holder in the absence of any concrete evidence that she was such.

As our Client is a stranger to the matters referred to in Mr. Stakelum's evidence,

we believe that to take up the opportunity of cross examining him will serve no useful
purpose and will merely delay matters.

Our Client rejects your preliminary conclusion th t sh^yas an Ansbacher

Account Holder.

Yours fai

Downirig/CoSkney & Larkin

Office of the Inspectors Appointed By

Order of the High Court To Ansbacher
(Cayman) Limited,
3 r d Floor,
Trident House,
Blackrock, CO. DUBLIN
Appendix XV (156) Mr Thomas Clifford
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Thomas Clifford.

a) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

b) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

c) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

d) Letter of 21 February 2001 and enclosures from Mr Stakelum to

Inspectors.

e) Internal Guinness and Mahon Credit Committee Minute of 31 May 1985.

f) Letter of 3 May 1985 from Guinness and Mahon to Princes Investments

Ltd.

2. Correspondence received from or on behalf of Mr Thomas Clifford.

a) Letter of 30 January 2002 from Downing, Courtney & Larkin to

Inspectors.
Appendix XV (156) (1) (a)
23 147 Q. When did that start?
24 A. I am inclined to believe 1976 but it might have been
25 1977. I would have started on my own in late 1975.
26 I only had one year of operations in 1975.
27 148 Q. Would you tell us what the arrangement in a general
28 way was with Mr. Traynor. How was this service
29 operated?
1 A. If I can take a typical example, a client may have
2 asked me to look after funds that in almost all
3 cases that I am aware of were already abroad.
4 I would have asked Mr. Traynor to advise me where
5 the funds might be transferred to, and then the
6 client would issue instructions when I got the
7 tracking route or account name or code or whatever
8 they might be.
9 149 Q. Could you not be a little bit more specific because
10 you know these terms, I don't know. Would you mind
11 explaining them to us?
12 A. If the client wished to place the funds with me and
13 they were in some Royal Bank of Scotland in Jersey
14 or wherever.
15 150 Q. This is client's of yours?
16 A. Yes.
17 151 Q. Why would they want to place their funds with you?
18 A. They might be unhappy about monitoring the funds in
19 the sense -of. what interest rate... (INTERJECTION) ..
20 152 Q. But you were not a bank?
21 A. No.
22 153 Q. They were asking your advice as to where to put the
23 funds?
24 A. They were asking me whether I could monitor those
25 funds on their behalf.
26 154 Q. Monitor is a word you use; I don't understand it.
27 Your clients have funds and they come into you.
28 What do they ask you to do?
29 A. They would say 'We have funds offshore' wherever
31
1 they might have been 'Can you look after these funds
2 for me.1
3 155 Q. "Can you look after these funds." What did that
4 mean?
5 A. Would you endeavour to get the best interest rate.
6 Would you monitor the funds. '
7 156 Q. Take it slowly. Would you endeavour to get the best
8 interest rate. Were they asking you to change
9 where their funds were into some other financial
10 institution?
11 A. I don't think they would come in and say 'We have
12 funds. Will you change them for some other
13 financial institution.• I think a discussion would
14 have arose with them that they would have advised me
15 that they had £X in funds and say 'Can you look
16 after these funds on my behalf.'
17 157 Q. What does that mean? *
18 A. It. means that they might not want to correspond
19 directly with, whatever foreign bank they were using.
20 They might not want to get mail received from
21 foreign banks on the basis of monthly statements.
22 They wouldn't feel that necessarily competent about
23 looking at whether the funds should be placed
24 one month or three months or six months. And that
25 they would like me to look after those factors.
26 158 Q. What did you do then?
27 A. I would probably advise them at some stage that
28 there would be a facility available through
29 Guinness & Mahon.
You then contacted Guinness & Mahon?
Yes.
You used the word "facility." What does that mean
in this connection?
It means I would probably have contacted
Des Traynor. I would have said * I have a client
— for the most part he wouldn't know who my clients
were — that wishes to have funds monitored abroad
by me.'
Don't used the word "monitored" because I don't
understand what it means. You have a client.
What is he to do?
Des Traynor is to give me an account number, a
reference, a bank where the client who would have
the funds would have to give instructions to his
bank to have the funds moved. Those funds —
I don't understand these things either — might be
moved to a receiving bank.
This is very important. If you don't understand it,
I understand even less. Let us take a typical
client with funds in Jersey. You tell Mr. Traynor
that this client is dissatisfied. What does
Mr. Traynor then do?
He gives me coded references. I don't remember but
it might well be a reference to a bank account in
London for so and so, for the account of so and so.
What was the bank?
Mr. Costello, I don't remember and I am sure those
instructions would have varied over the years.
33
\

1 164 Q. What was the account, in whose name was the account
2 to be placed?
3 A. I have a difficulty answering that question, not
4 wanting to be uncooperative. All I am saying is
5 that Mr. Traynor would be seeking to get the funds
6 under his control and there is a transfer process.
7 165 Q. You must have known the financial institution in
8 which your clients's funds were going to be placed?
9 A. The only answer I can give to that is I don't recall
10 because over the years they probably used different
11 financial institutions.
12 166 Q. Tell me some of them that were used that
13 Mr. Traynor would have told you about. Give me the
14 names of some of those, Mr. Stakelum?
15 A. It is very difficult under oath, but let us try
16 Guinness & Mahon London for a start. I don't know.
17 But if it was Guinness & Mahon London, it would
18 probably be account of so and so, reference so and
19 •so-etc. etc.. But I am not absolutely positive of .
20 that. It could also vary depending on the currency.
21 If it was dollars it might be something else.
22 167 Q. What other financial institution did he tell you
23 that the money was going to be deposited in?
24 A. I don't know, I just don't know. It would be a
25 once-off instruction. I don't know. It probably
26 would depend on where the funds were coming from
27 too.
28 168 Q. Do your best. I am sure you are under strain,
29 Mr. Stakelum. Tell me the numbers of other
34
1 institutions that clients of yours had money
2 deposited as a result of your contact with
3 Mr. Traynor?
4 I just cannot answer that. That is not wanting to
5 be uncooperative, I just cannot remember.
6 Why can't you remember?
7 How do I answer a question of why I cannot remember?
8 For example, were any of the funds lodged in any of
9 the Guinness & Mahon subsidiaries in Cayman or in
10 the Channel Islands?
11 I don't think so. But I think the funds would be
12 initially lodged somewhere maybe for the account of
13 Guinness Mahon Cayman, reference number so and so,
14 maybe for the account in Guinness & Mahon London for
15 Guinness & Mahon Dublin. I am not too sure.
16 You would get specific instructions.
17 It may have been the account of Guinness & Mahon in
18 Dublin or Guinness & Mahon in London. Was this the
19 offshore bank we are talking...about, Guinness & Mahon
20 Cayman Trust, the Ansbacher bank. They would have
21 been lodged in its account in Dublin or lodged in
22 its account in .London?
23 It may well have been, I don't remember.
24 But you are under oath now?
25 That's right.
26 You are under oath. Can you say that funds your
27 client had asked you in relation to assistance were
28 lodged in an account in the name of Guinness Mahon
29 Cayman Trust in Dublin or in London?
35
1 A. I cannot remember. I suspect that some of the
2 instructions given at the time would be what was at
3 the best requirements of the Guinness & Mahon bank,
4 what their internal ...(INTERJECTION).
5 174 Q. A few minutes ago you to said to me that you gave
6 Mr. Traynor instructions and that you transferred
7 funds to him and they were transferred offshore, is
8 that not right. Didn't you say that to me a few
9 minutes ago?
10 A. They were probably offshore already. I thought we
11 were talking about a client...(INTERJECTION).
12 175 Q. They were offshore already you think?
13 A. Yes, most of the funds were offshore already.
14 176 Q. All the funds of these clients we are talking about
15 were offshore. Did you ever.have clients coming in
16 to you with funds that weren't offshore?
17 A. Yes.
18 177 Q. What would happen then?
19 A. •At different stages, in the early stages I think
20 Irish pounds could be converted without any problem
21 into Sterling. It is one and the same in the
22 1970*s. Then-they could be moved from Sterling.
23 178 Q. Were they put offshore, the funds?
24 A. Yes.
25 179 Q. Where?
26 A. All I know is that with Des Traynor I would have
27 assumed Guinness Mahon Cayman Trust, later
28 Ansbacher. But it could well have been
29 College Trustees or Guinness & Mahon Guernsey.
oc
1 One or the other?
2 Yes, I assume one or the other.
3 Did any of your clients to your knowledge establish
4 trusts with the assistance of Guinness & Mahon with
5 Mr. Traynor either in the Cayman Islands or in the
6 Channel Islands?
7 Not to my knowledge.
8 None of them told you that they had done this?
9 No.
10 Mr. Traynor didn't tell you that he was going to
11 suggest this to them?
12 No.
13 You are pretty certain on that or are you doubtful
14 about it?
15 I am not aware certainly of any clients that
16 established such trusts. I am not aware of any
17 that did.
18 If they didn't establish trusts, you are aware of
19 clients who transferred funds offshore?
20 Yes, that's right.
21 We will break now for a cup of coffee,
22 Mr. Stakelum, for about ten minutes or so.
23
24 SHORT ADJOUBNMgMT

25
26
27
28

29
Appendix XV (156) (1) (b)
 Mr. Jade Stakelum
"Fairmonf
^ Ballyronan Road
Kilpedder
Co. Wicklow
Strtettv Private & Confidential -Addressee Only

Dear Sir
I refer to your letter of 11 October 2000, and I reply on my own behalf, and on behalf of my
colleagues, Mr. Justice Declan Costello and Mr. Paul Rowan.
We now wish to examine you under oath concerning the matters set out in our two letters dated
30 August 2000 and 21 September 2000. To that'end, I propose that an interview would tike
place in our offices at die above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor atfee above
phone number to confirm either date, or to make mutually cohveoiect alternative arrangements if
those dates do not suit you
We note your retusal to provide us with pantos of your clients prior to examination. I must point
out to you that you are obliged by law to provide us with the information we have required of
you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You win note that section 10(5) of the Companies Act 1990 imposes a duty upon you to
comply with our requirement, and, in the case of a refusal to do so, mdces provision for the
matter to be dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
relation to the transfer of funds to either of those islands. We require this information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidious to disclose the identity of your clients. Once again, I must
point out to you that you are obliged to do so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain them.
Yours faithfully

Noreen Mackey B.L.

Appendix XV (156) (1) (c)
 -FAIRMONT"
JACK STAKELUM BALLYRONAN ROAD
CHARTERED ACCOUNTANT .
TELEPHONE: 2810646 FAX: 2810645 KILPEDDER
MOBILE: 087 2854660 CO. WICKLOW

The Inspectors
Floor
Trident House *SR AOK S-'
Blackrock
<7Qt TOW

6 November, 2000

Dear Sirs,
With reference toyour letter of the 18* October, and in particular the third
paragraph, I should point out that I did not refbse as such to provide the information in
question, merely that I should be afforded the opportunity to ai^ue why I should not be
asked to divulge such information. The persona in question dealt with me on an
understanding of confidentiality, and as the Inspectors will surely appreciate, it is difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point outforcefully in your letter, you are not prepared to allow
me that opportunity and you have referred to the legal position. In the circumstances, I
attach a list of the names and addresses of the persons in question.
YoursfeithfUlly,

EncI:

V.A.T. Number 2854485K

 i

Clifford, The Kerries, Tralee, Co. Kerry

Appendix XV (156) (1) (d)
 (BlTlbCT)

JOHN J. STAKELUM
"Fairmont'*
BaJlyronan Road,
Kilpedder, Co. WickJow.

21 February2001.

1
The High Court Inspectors, g
3 rd Floor,
Trident House,
Blackrock,
Co. Dublin.
Re: Interviews with the Inspectors on 8/11/2000 snd 6/12/2000.

Dear Inspectors,

The content in sections l and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000.
1. The Consnttancy Business I set op In 3975.
»
•

In December 1975 I decided to set up a business that would pro-vide a general financial
Consultancy service to clients. I had identified the market need in Haughey Bo land & Company
during my auditing work but more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided to focus on were:
• Preparation of properly assembled requestsfor financing from banks.
• Preparation of well constructed projected cashflow and profit and loss statements.
• Accompanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
for the timely production of them.
• Being a sounding board for all kinds of operating issues - both problems and perceived
opportunites.
• Guidance on where to go and how to request professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Actingfor clients in the purchase or sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal sendee headings under which I operated in the name of Business
Enterprises Limited from December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful. Typically, it occupied well over 10094 of 50-
hour weeks.
2. The service I gave to persons who wished to hold fbnds oflshore.

Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards thia my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
® I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
 • I would oeither issue'nor obtain, receiptsfor. movements in funds. Neither would I keep any
ledger recprds, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisagedfor this service but over time it became necessary to
recover costs on a case by case basis.
My operating procedurefor this service had butfour components:

•• A deposit account in G&M that I have described as a hotchpotch account

• A niqnijal memorandum record I kept in my office under my personal control.
• Afloat account in AIB.
• A monthly reconciliation of the sum of the memorandum records with the sum of the
accounts) in G&M and airy float balances.
In the interest of completeness perhaps I should add also:

• G&M would be aware of the total funds I had in my hotclpotch account

• G&M would not be aware of the names of the depositors whose funds, in aggregate,
cotdprised the balance in the hotchpotch account albeit that a name and an amount could
surface as part of another business transaction with the bank, e.g. a back-to-back ban.
• Some of my clients would be aware generally that the funds they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were offshore but would have
00 awareness or care about the name of the bank in which their money was deposited.
' • Only I knew the names in the memorandum account and only I knew the ownership of the
balance in thefloat account kept in AEB.
5. The Information requested by Ms. Mackey on the 6 December 2000.
t

The information requested by Ms. Mackey on 6 December'2000 is given in the three schedules
that are appended to this letter.
Schedule 1 relates to the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had offshore deposits in G&M through my procedure.

Yours sincerely,
 SCHEDULE 1

Name. Ofhhora Back to Data Deposit Date Deposit Source of Funds Source of Funds
Deposits Back loon. Opened Closed Offshore Irish Pounds.

Tom Clifford. Yes. No. Orca 1978 c. 1087/88. Partially. Partially.

Appendix XV (156) (1) (e)
 NAME : Priacaa lovntauM Llsltad. CradU Mawniaailma
t oUttod by t Pen

ADDRESS : e/o, Bualaon Entarprhaa UaUtoe1,

C*trftako:
n, CI yd* Rood, Ball^rldf, Ddkite 4. CB. Approval i V « / No
/
MWNQS / P m l f d o n Ottalaad
OCCUPATION : l«o«ioom Coa*a«y. Dm i N/A
THS APPLICATION i IIIIJI I IKIIIWINMNN
( Ddata m appofriatt I
TYPE: .faff, AMOUNT !<WMW RATE : W fliwd i FSB i

PURPOSE / DRAWDOWN : If M* or I
Working eaplul
fwtlltl—. || i
co«plotloo of taoulqr T
YES / MOut
TERM OT FACILITIES : REVIEW DATES:

Euoaaiaa far O M ROAR.

•
SOURCE o r REPAYMENT t
Cadi Flow.
«

SECURITY i IT addlilaMi or oRftKlat

faeiMty, la lauricy to
Guaraano J. J. Byi va and Tin naa CHAM. ardor t
YES / tHk
If No, Mm datalta
taparatoly.

BACKGROUND NOTE /
OUTLINE OP PROPOSAL J
Guarantor* am vail inmm to flolnaaai • Mahoo and la tMi fl* MTHlilJ!

RELATED FAQLITtES /
BORROWERS i
tiripc

Total Expomra :

LlMltfr) Racordod by ,.......• Oato : Ajipfowid

Sacarlty in ardor for Drawdown i QM. h O k l If vmt Cl« total
Daw r oqoawol
1
V*" 1»' Mat* t
Appendix XV (156) (1) (f)
m
GUINNESS+MAHON LTD
1T M * t tma OaMi * »A Baa HA W« 1M*M 00 Una)

Our Iter. WDrtC 3rd May, IMS,

Thft Sicritiiy,
PriiioH InvutsMixi Limited,
c/o, Bmlneii Entanprisas Lin Had,
17, Clyde Road.
Ballsbrtdge,
fffHilH 1

Sir.
Wa ara pleased to confirm that wa ara prepared to extend your
facility far a further partod subject to tbo following tarma and condUkxw-

Borrowen Princes Investments Limited.

Amount: 11KXOOO.OO (One Hundred and Eighty Thousand
POWKM - Starling L
Purpose! The fiwds bare already boon placed at your
disposal in the form or working capitsL
Term: In accordance with normal banking practice
all funds taken up ara repayable on demand
but la any case not later than 31st May, MM.
Wa propose to continue charging Intarast at
a fixed rata of 18% par annua. Intarast will
be debited on your account and become payable
by you on the usual quarterly dates and at
Maturity of the loan.
As security for the loan we shall retain the
guarantee signed by J. J. Byrne and Thomas
CUfford.

SBSBSnW a—«m— *

T
 We are pleased to be of assistance to you and endoee hawanth
i copy of this facility letter for »l«netare by yew authorised tffnatorlee
andreturn thereby oeeflratat *H»r acceptance of the lean on die terms nentioned.
We ahall require • copy of a Beard Resolution authorising the continued

Youn Mthffett*
for OUMNUi • MAHON UMTTEa

Pat OUwyar,

TTRT Leonard,

t
 DOWNING, COURTNEY & LARKIN
SOLICITORS
(INC. E U G E N E D O W N I N G & CO., A N D D O N A L J. C O U R T N E Y )

84, NEW STREET, KILLARNEY

M I C H A E L C. LARKIN, B.C.L.. LL.B.. NOTARY PUBLIC Branch Office: KENMARE.
CO. KERRY, IRELAND Dublin Office: 24 UPPER 0RM0ND QUAY,
MAURICE COFFEY, B.C.L.. LL.B. TEL. 064-31061. DUBLIN 7.

E-mail: info@downingslaw.com V.A.T. Reg. No. I.E. 0092115L.

DX 51 006 KILLARNEY
FAX. 064-33934.

Our ref: MCL.MB

30 January 2002
Your ref: C/C23/NSPM

Re: Mr. Thomas Clifford, The Kerries, Tralee, Co. Kerry.

f if*•.-.-,•
'ii h f(:•} ...

Dear Sirs,

We write by reference to your letter of the 14 th December 2001 and have taken
the instructions of Mr. Thomas Clifford thereto.

1. At no time has Mr. Clifford had any direct contact with Ansbacher.

2. Mr. Stakelum managed certain monies on behalf of Mr. Clifford since in or about
1976 until in or about 1997/1998. Mr. Stakelum managed the monies offshore and
during the period further monies were given to Mr. Stakelum from time to time. At
no time was Mr. Clifford advised where his monies were held but he was advised,
from time to time, by Mr. Stakelum as to the amount of money held by Mr. Stakelum
to his credit.

3. Mr. Clifford was a Director of Princes Investments Limited which had a loan from
G.M.I., which loan was subsequently repaid to G.M.I, by Princes Investments. Mr.
Clifford has no knowledge, either direct or indirect, of that loan being secured by
funds on deposit with a subsidiary of G.M.I, outside the jurisdiction.

The writer acted for Princes Investments Limited in its appearance before the
Moriarty Tribunal and supplied to the Tribunal evidence of the repayment of the loan
by Princes Investments direct to G.M.I.

4. At no time has Mr. Stakelum, or indeed anyone else, communicated to Mr. Clifford
that offshore monies standing to his credit were invested in or placed with Ansbacher.

5. It was alleged at the Tribunal that the repayment of the loan to Princes Investments
was made by Ansbacher and/or College Trustees. Mr. Stakelum advised the Tribunal
that the repayment of the loanfrom this source could not have involved Clifford funds
in that it would have needed his permission and further that there was no benefit to
Mr. Clifford in the suggested arrangement.
Continued/ ...
 Mr. Clifford repeats that he was never at any time a client of Ansbacher,
rejects your preliminary conclusion that he was a client of Ansbacher, and in the light of what
is detailed above he urges that you accept that he was not a client of Ansbacher.

Inspectorate appointed by The High Court

Ansbacher (Cayman) Limited,
3 r d Floor,
Trident House,
Blackrock,
Co. Dublin.
Appendix XV (157) Mr William Clifford, deceased
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
William Clifford.

a) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

b) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

c) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

d) Letter of 21 February 2001 and enclosures from Mr Stakelum to

Inspectors.

e) Guinness and Mahon credit memo of 3 May 1985.

f) Letter of 3 May 1985 - Guinness and Mahon to Princes Investments

Limited.

g) Guinness and Mahon credit memo of 7 May 1985.

h) Letter of 10 April 1975 - Guinness and Mahon to Princes Investments

Ltd.
Appendix XV (157) (1) (a)
When did that start?
I am inclined to believe 1976 but it might have been
1977. I would have started on my own in late 1975.
I only had one year of operations in 1975.
Would you tell us what the arrangement in a general
way was with Mr. Traynor. How was this service
operated?
1 If I can take a typical example, a client may have
2 asked me to look after funds that in almost all
3 cases that I am aware of were already abroad.
4 I would have asked Mr. Traynor to advise me where
5 the funds might be transferred to, and then the
6 client would issue instructions when I got the
7 tracking route or account name or code or whatever
8 they might be.
9 Could you not be a little bit more specific because
10 you know these terms, I don't know. Would you mind
11 explaining them to us?
12 If the client wished to place the funds with me and
13 they were in some Royal Bank of Scotland in Jersey
14 or wherever.
15 This is client's of yours?
16 Yes.
17 Why would they want to place their funds with you?
18 They might be unhappy about monitoring the funds in
19 the sense of what interest rate...(INTERJECTION).
20 But you were not a bank?
21 No.
22 They were asking your advice as to where to put the
23 funds?
24 They were asking me whether I could monitor those
25 funds on their behalf.
26 Monitor is a word you use; I don't understand it.
27 Your clients have funds and they come into you.
28 What do they ask you to do?
29 They would say 'We have funds offshore' wherever
31
1 they might have been 'Can you look after these funds
2 for me.'
3 155 Q. "Can you look after these funds." What did that
4 mean?
5 A. Would you endeavour to get the best interest rate.
6 Would you monitor the funds. '
7 156 Q. Take it slowly. Would you endeavour to get the best
8 interest rate. Were they asking you to change
9 where their funds were into some other financial
10 institution?
11 A. I don't think they would come in and say 'We have
12 funds. Will you change them for some other
13 financial institution.' I think a discussion would
14 have arose with them that they would have advised me
15 that they had £X in funds and say 'Can you look
16 after these funds on my behalf.'
17 157 Q. What does that mean?
18 A. It. means that they might not want to correspond
19 directly with whatever foreign bank they were using.
20 They might not want to get mail received from
21 foreign banks on the basis of monthly statements.
22 They wouldn't feel that necessarily competent about
23 looking at whether the funds should be placed
24 one month or three months or six months. And that
25 they would like me to look after those factors.
26 158 Q. What did you do then?
27 A. I would probably advise them at some stage that
28 there would be a facility available through
29 Guinness & Mahon.
1 159 Q. You then contacted Guinness & Mahon?
2 A. Yes.
3 160 Q. You used the word "facility." What does that mean
4 in this connection?
5 A. It means I would probably have contacted
6 Des Traynor. I would have said 'I have a client
7 — for the most part he wouldn't know who my clients
8 were — that wishes to have funds monitored abroad
9 by me.'
10 161 Q. Don't used the word "monitored" because I don't
11 understand what it means. You have a client.
12 What is he to do?
13 A. Des Traynor is to give me an account number, a
14 reference, a bank where the client who would have
15 the funds would have to give instructions to his
16 bank to have the funds moved. Those funds —
17 I don't understand these things either — might be
18 moved to a receiving bank.
19 162 <J. This is very important. If you don't understand it,
20 I understand even less. Let us take a typical
21 client with funds in Jersey. You tell Mr. Traynor
22 that this client is dissatisfied. What does
23 Mr. Traynor then do?
24 A. He gives me coded references. I don't remember but
25 it might well be a reference to a bank account in
26 London for so and so, for the account of so and so.
27 163 Q. What was the bank?
28 A. Mr. Costello, I don't remember and I am sure those
29 instructions would have varied over the years.
S'

1 164 Q. What was the account, in whose name was the account
2 to be placed?
3 A. I have a difficulty answering that question, not
4 wanting to be uncooperative. All I am saying is
5 that Mr. Traynor would be seeking to get the funds
6 under his control and there is a transfer process.
7 165 Q. You must have known the financial institution in
8 which your clients's funds were going to be placed?
9 A. The only answer I can give to that is I don't recall
10 because over the years they probably used different
11 financial institutions.
12 166 Q. Tell me some of them that were used that
13 Mr. Traynor would have told you about. Give me the
14 names of some of those, Mr. Stakelum?
15 A. It is very difficult undet oath, but let us try
16 Guinness & Mahon London for a start. I don't know.
17 But if it was Guinness & Mahon London, it would
18 probably be account of so and so, reference so and
19 •so-etc. etc.. But I am not absolutely positive of
20 that. It could also vary depending on the currency.
21 If it was dollars it might be something else.
22 167 Q. What other financial institution did he tell you
23 that the money was going to be deposited in?
24 A. I don't know, I just don't know. It would be a
25 once-off instruction. I don't know. It probably
26 would depend on where the funds were coming from
27 too.
28 168 Q. Do your best. I am sure you are under strain,
29 Mr. Stakelum. Tell me the numbers of other
34
1 institutions that clients of yours had money
2 deposited as a result of your contact with
3 Mr. Traynor?
4 I just cannot answer that. That is not wanting to
5 be uncooperative, I just cannot remember.
6 Why can't you remember?
7 How do I answer a question of why I cannot remember?
8 For example, were any of the funds lodged in any of
9 the Guinness & Mahon subsidiaries in Cayman or in
10 the Channel Islands?
11 I don't think so. But I think the funds would be
12 initially lodged somewhere maybe for the account of
13 Guinness Mahon Cayman, reference number so and so,
14 maybe for the account in Guinness & Mahon London for
15 Guinness & Mahon Dublin. I am not too sure.
16 You would get specific instructions.
17 It may have been the account of Guinness & Mahon in
18 Dublin or Guinness & Mahon in London. Was this the
19 offshore bank we are talking .about, Guinness & Mahon
20 Cayman Trust, the Ansbacher bank. They would have
21 been lodged in its account in Dublin or lodged in
22 its account in London?
23 It may well have been, I don't remember.
24 But you are under oath now?
25 That's right.
26 You are under oath. Can you say that funds your
27 client had asked you in relation to assistance were
28 lodged in an account in the name of Guinness Mahon
29 Cayman Trust in Dublin or in London?
35
 t

1 A. I cannot remember. I suspect that some of the

2 instructions given at the time would be what was at
3 the best requirements of the Guinness & Mahon bank,
4 what their internal ...(INTERJECTION).
5 174 Q. A few minutes ago you to said to me that you gave
6 Mr. Traynor instructions and that you transferred
7 funds to him and they were transferred offshore, is
8 that not right. Didn't you say that to me a few
9 minutes ago?
10 A. They were probably offshore already. I thought we
11 were talking about a client...(INTERJECTION).
12 175 Q. They were offshore already you think?
13 A. Yes, most of the funds were offshore already.
14 176 Q. All the funds of these clients we are talking about
15 were offshore. Did you ever have clients coming in
16 to you with funds that weren't offshore?
17 A. Yes.
18 177 Q. What would happen then?
19 A. At different stages, in the early stages I think
20 Irish pounds could be converted without any problem
21 into Sterling. It is one and the same in the
22 1970' s. Then -they could be moved from Sterling.
23 178 Q. Were they put offshore, the funds?
24 A. Yes.
25 179 Q. Where?
26 A. All I know is that with Des Traynor I would have
27 assumed Guinness Mahon Cayman Trust, later
28 Ansbacher. But it could well have been
29 College Trustees or Guinness & Mahon Guernsey.
1 180 Q. One or the other?
2 A. Yes, I assume one or the other.
3 181 Q. Did any of your clients to your knowledge establish
4 trusts with the assistance of Guinness & Mahon with
5 Mr. Traynor either in the Cayman Islands or in the
6 Channel Islands?
7 A. Not to my knowledge.
8 182 Q. None of them told you that they had done this?
9 A. No.
10 183 Q. Mr. Traynor didn't tell you that he was going to
11 suggest this to them?
12 A. No.
13 184 Q. You are pretty certain on that or are you doubtful
14 about it?
15 A. I am not aware certainly of any clients that
16 established such trusts. I am not aware of any
17 that did.
18 185 Q. If they didn't establish trusts, you are aware of
19 clients who transferred funds offshore?
20 A. Yes, that's right.
21 186 Q. We will break now for a cup of coffee,
22 Mr. Stakelum, for about ten minutes or so.
23
24 SHORT ADJOURNMENT
25
26
27
28
29
Appendix XV (157) (1) (b)
«

OurRef: C/S10/NM .f JJ

18* October 2000

Mr. Jack Stakelum
"Fairmont"
Ballyronan Road
Kilpedder
Co. Wicklow
Strkttv Private & Confidential -Addressee Only
Dear Sir
I refer to your letter of 11 October 2000, and I reply on my own behalf, and on behalf of my
colleagues,
*
Mr. Justice Dedan Costdlo and-Mr. Paul Rowan.
We now wish to examine you under oath concermng 1i»inattOT set omt in ow two letto dated
30 August 2000 and 21 September 2000. To that'end, I propose that an interview would take
place in our offices at the above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor at the above
phone number to confirm either date, or to make mutually conveniert alternative arrangements if
those dates do not suit you.
We note your refusal to provide us with names of your dients prior to examination. I must point
out to you that you are obliged by law to provide us with die information we have required of
you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of die Companies Act 1990 imposes a dirty upon you to
comply with our requirement, and, in the case of a refusal to do so, m&es provision for the
matter to he dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
relation to the transfer of funds to either of those islands. We require this information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidious to disclose 1he identity of your clients. Once again, I must
point out to you lhat you are obliged to do so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain them.
Yours faithfully

Noreen Mackey B.L.

Appendix XV (157) (1) (c)
m
"FAIRMONT"

JS
JACK STAKELUM BALLYRONAN ROAD
CHARTERED ACCOUNTANT .
TELEPHONE: 2810646 PAX: 2810645 KILPEDDER
MOBILE: 0872854660 CO. WICKLOW

The Inspectors
3** Floor
Trident House m . AO* 9
Blackrock
CO. DUBLIN

6 November, 2000

Dear Sirs,
Withreference to your letter of the 18* October, and in particular the third
paragraph, I should point out that I <fid not reflise as such to provide the information in
question, merely that I should be afforded the opportunity to argue why I should not be
asked to divulge such information. The persons in question dealt with me on an
understanding of confidentiality, and as the Inspectors will surely appreciate, it is difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point outforcefully in your letter, you are not prepared to allow
me that opportunity and you have referred to the legal positioa In the circumstances, I
attach a list of the names and addresses of the persons in questioa
Yours fiiithfiilly,

End;

V.A.T. Number 2854485K

T
n

b htoftWj&t

• erg . •«'

William CUfford, c/o Vigo Lodge, The Spa, Tralee, Co. Keny (deceased)

r -

a 14.

T
Appendix XV (157) (l)(d)
 (VwcT)

JOHN J. STAKELUM
"Fairmont"
Ballyronan Road,
Kilpedder, Co. Wicklow.

21 February 2001.

The High Court Inspectors, g rfg ^

3 r i Floor,
Trident House,
Blackrock,
Co. Dublin.
Ete: Interviews with the Inspectors on 8/11/2000 and 6/12/2000.

Dear Inspectors,

The content in sections 1 and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000.
1. The Consultancy Business I set op in 1975.
In December 1975 I decided to set up a business that would provide a general financial
Consultancy service to clients. I had identified the market need in Haugbey Boland & Company
during my auditing work but more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided tofocus on were:

• Preparation of properly assembled requests fbr financing from banks.

• Preparation of well constructed projected cash flow and profit and loss statements.
• Accompanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
£>r the timely production of them.
• Being a sounding boardfor all kinds of operating issues - both problems and perceived
opportunites.
• Guidance on where to go and how to request professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Actingfor clients in the purchase or sale ofbusinesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in the name of Business
Enterprises Limitedfrom December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful Typically, it occupied well over 100% of 50-
hour weeks.
2. The service I gave to persons who wishedtoholdtoadsoffshore.
Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards this my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
• I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
 • 1 would neither issuenor obtain receiptsfor movements in funds. Neither would I keep any
ledger records, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisaged for this service but over time it became necessary to
recover costs on a case by case basis.
My operating procedure for this service had but four components:
i •

•• A deposit account in G&M that I have described as a hotchpotch account.

• A manual memorandum record I kept in my office under my personal control.
• Afloat account in AEB.
• A monthly reconciliation of the sum of the memorandum records with the sum of the
accounts) in G&M and any float balances.
In tie interest of completeness perhaps I should add also:

• G&M would be aware of the total fhnds I had in my hotchpotch account

• G&M would not be aware of the names of the depositors whose finds, in aggregate,
comprised the balance in the hotchpotch account albeit that a name and an amount could
surface as part of another business transaction with the bank, e.g. a back-to-back loan.
• Some of my clients would be aware generally that the funds they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were offshore but would have
no awareness or care about the name of the bank in which their money was deposited.
' • Only I knew the names in the memorandum account and only I knew tie ownership of the
balance in thefloat account kept in AEB.

¥
5. The information requested by Ms. Mackey on the 6 December 2000.
The information requested by Ms. Mackey on 6 December'2000 is given in the three schedules
that are appended to this letter.

Schedule 1 relates to the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had offehore deposits in G&M through my procedure.

Yours sincerely,
 SCHEDULE 1

Name. Offshore Back to Data Deposit Data Deposit Source of Funds Source of Funds
Deposits Back loan. Opened Closed Offshore Irish Pounds.

William Clifford. Yes. Na Circa 1976. On death-early 80s.

By wife a 1967/88. All. None.
Appendix XV (157) (1) (e)
 NAME : Prince* loveuman Limited. CradU Meaurandua
I Millad bjr t po» n
Equity Stake:
AODRESS : c/o, Bwlaaw Cnterprteee Uaicad,
17, CI yd* Rtmd, BaJlabrldfa, Oubllii 4. C & Approval i Vaa J No
F m M m Obtained
'OCCUPATION s tow®®1" Compmf, Data: n/a

THB APPLICATION : FiB—lM tSmkmilmt

{ Dalaw u »wroprUia )
TYPE : AMOUNT jlMMQft RATE ! \Vk flwri. FOR I

PURPOSE / DRAWDOWN : If m v or laeraaaad

tattMafc la drawduwa
Working capital to
coapladM o1 eaaartty T
YES / MBH
TERM OT FACILITIES > REVIEW DATES:
Extension far OM year. It. 1 ItM.

SOURCE OP REPAYMENT : •

Cuh Flow.

SECURITY:
Guarantee J. J. Byrne and Thoma CllflMl I M U | ^ la Mcarlty in

YB/USk
|f Na. |^va detail*

BACKGROUND NOTE /
OUTLINE OT PROPOSAL I
Guarantor* era CO la Ala 6m
U aomMarad m m

RELATED rAOures /
BORROWERS s

Total Expotwt: 1180,000. Data

New UailtM Recorded by <

in order for Drawdown i ...,.„«,. * ( X ( IT over £ l a total

Data :
. |)m» I
Appendix XV (157) (1) (f)
 G U I N N E S S + M A H O N LTD
17 IMhfi tatDaMh I PA. tatHA Tdi 7N044 00 Ukm)

Our Reft PffD/SC 3rd May, 1965.

Prinaas Inveetstents Limited,

c/o, Buslneei Enterprises Limited,
IT, O n * Road,

Mr.
Wa ara pla—ad to confirm that wa ara prepared to oatond your
facility for a further parted subject to the foNowlaa tome and condltlons:-

Princes lovesuaents Limited.

Amounc £110,000.00 (One Hundred and Eighty Thousand

Pounds) • Storting L
The funds have already placed at your
dMpoeal In the form of capital.
Term: to accordance with noraial banking practice
all funds taken up are repayable on demand
but In any case aot later A m Slat May, ISM.
Wo propose to continue charging interest at
a fixed rata of 11% par snnuia. intarast will
be debited on your account and become payable
by you on the usual quarterly datoa and at
maturity of the loan.

Security: As security for the loo* wo shall retain the

Mao si good by J. J. Byrne and Thomas
guarantee
Clifford.

ift u m .« »,——i.a.t.0
'SysSJSBJSfiSS:*11**"
 - a

We art pkMMtf to be of nlfwaara to j m and ancioeo herewith

a copy of tMa facility lattar for atgnatara by yoar aathoriied ricBatorle*
and return thereby coaflmlng yopr acceptance of the loan on the tenia Mentioned.
We tfiall require a copy of a Board Raeotutlan autborMnt the continued
borroartafi
Yoan faithfully,
for GUMMM « MAHON LMTED.

PKVDqw"

T, R. Leonard,

T
T
Appendix XV (157) (1) (g)
 ^ C g rMWn^UWTB,./ EXTENSION.

"•0,000,
Morulas Capita) „
Brtwwlon for on*
OOtSQy
I V flaad.

*«o*en*d j "h— Clifford.

PURPOSE / DRAWDOWN ! If new or Increased

fadUOas, la drawdown
Wortoni capital permitted prtov to
complstiaa of security T
YES t HBoc .

TERM OT PAOUnES : REVIEW DATES t

t-
Egtemkm for em 3L&UM.
'C*
SOURCE OP REPAYMENT s
Caafa Plow. -

SECURITY i If additional or existing

facility, la security In
Guarantee J. 1. Eijrma and Tinlaaa CSffard. oriv t
YES f Mk
If No, give datalla
separately.

BACKGROUND NOTE /
OUTLINE OT PROPOSAL I
Goaraacort in m U known to CTiJihh * end ta thU cat* etw aecurlty
li ***fnfH
' nMl adequate^

RELATED FACflUTTES /
BORROWERSi
Minute ....A?.?. Once
^fcttW-^L/"

BQAI^>

Total Exposure : C80.000. _ t•

. aw Unlt(i) Racordad by : . Data i Approved

airtty in order for Drawdown i
OM. * Co. ( if oter Ctm total
C(H«|
' i w n w r t Kw . . t --.
Appendix XV (157) (1) (h)
.GUINNESS & MAHON L.TP

17. C o l l e g e G r e e n .
DUBLIN. 2.
-ft O. BOX SSA.
RCaiSTCRCD OFFICE.
. NO ienc
Our Ref: PO'D/MR. 10th April, 1975.

The Secretary,
Princes Investments Limited,
60/62, Amiens Street,
DtTBLiy 1 .

Dear Sir,
On the instructions of Mr. Traynor, we write to confirm that
we are prepared to make available to you a facility, subject to the
following terns and conditions:
(1) Maximum Amount: £116,000 (One Hundred and Sixteen Thousand
Pounds).
(2) Tern: All funds advanced are repayable on demand
but in any case not later than the 6th
Mfcrch, 1976.
(3) Drawdown: The funds have already been taken up.
(4) Interest: Ye propose charging interest on the facility
at 11$% per annua. Interest will he
debited by us to the Account on the 30th
June, 30th September and 31st December
annually and at maturity of the Loan. We
shall apply to you immediately after the
aforementioned dates for payment of interest
(5) Security: As security, we shall require a Form of
Guarantee signed by Kr. J. J. Byrne, ltr.
William Clifford and Mr. Thomas Clifford.
The relative Form of Guarantee is enclosed
for completion and return at your earliest
convenience.

Continued ...
 CONTINUATION SHCCT NO " 1.

(6) Reserve If tbere shall be any increase in the ooat

acquirements: to us of making or maintaining the Loan by
an amount which we deem material resulting
from any changes in the reserve or
liquidity requirements to which this Bank
is or may be subjected, then we shall be
entitled to call for payment of additional
Interest of such amount as we shall certify
as the amount required to compensate us for
such increased cost with effect from the
date of notification. Ton shall be at
liberty within one month sifter such
notification and without payment of any
premium or penalty to repay the full amount
- of the Loan outstanding together with interes-
at the rate applying prior to notification.
Ve enclose herewith a copy of this facility letter for signature
by your authorised signatories and return in due course, thereby
confirmint acceptance of the facility on the terms stated. Ve shall
also require a copy of a Board Besolution confirming the borrowing.
Ve also enclose a Form of Mandate ud Signature Cards for completion
and return covering the operation of a Banking Account. When
returning the aforementioned documents to us, perhaps, you would also
kindly arrange to let us have a copy of your Memorandum ftArticles
of Association together with a photocopy of the Certificate of
Incorporation.
Tours faithfully
for GUIBNS83 * MASON LIMITED

P. O'Dwyer,
Loans Officer.
•6

B. J. MoLoughlln,
.Authorised Signatory.
d

Accented on behalf of Princes Investments^Liaitad . y t

William Clifford ^J Thomas^lirtord

Appendix XV (158) Ms Olga Gray
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Ms
Olga Gray.

a) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

b) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

c) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

d) Letter of 21 February 2001 and enclosures from Mr Stakelum to

Inspectors.
Appendix XV (158) (1) (a)
147 Q. When d i d t h a t start?

A. I am i n c l i n e d t o b e l i e v e 1976 b u t i t m i g h t h a v e been

1977. I w o u l d h a v e s t a r t e d o n my own i n l a t e 1975.

I o n l y had one y e a r of o p e r a t i o n s in 1975.

148 Q. Would y o u t e l l u s w h a t t h e a r r a n g e m e n t in a general

way was w i t h Mr. T r a y n o r . How w a s t h i s service

operated?
1 A. I f I c a n t a k e a t y p i c a l e x a m p l e , a c l i e n t may h a v e
2 a s k e d me t o l o o k a f t e r funds t h a t i n a l m o s t all

3 c a s e s t h a t I am a w a r e of w e r e a l r e a d y abroad.

4 I w o u l d h a v e a s k e d Mr. T r a y n o r t o a d v i s e me w h e r e

5 t h e funds might be t r a n s f e r r e d to, and t h e n the

6 c l i e n t w o u l d i s s u e i n s t r u c t i o n s when I g o t the
7 t r a c k i n g r o u t e o r a c c o u n t name o r c o d e o r w h a t e v e r

8 they might be.

9 149 Q. C o u l d you n o t b e a l i t t l e b i t more s p e c i f i c because

10 you know t h e s e t e r m s , I d o n ' t know. Would y o u m i n d

11 e x p l a i n i n g them t o u s ?
12 A. I f t h e c l i e n t w i s h e d t o p l a c e t h e f u n d s w i t h me a n d
13 t h e y w e r e i n some R o y a l Bank o f S c o t l a n d i n Jersey
14 or wherever.
15 150 Q. T h i s i s c l i e n t ' s of yours?
16 A. Yes.
17 151 Q. Why w o u l d t h e y w a n t t o p l a c e t h e i r f u n d s w i t h y o u ?
18 A. They m i g h t b e u n h a p p y a b o u t m o n i t o r i n g t h e f u n d s in
19 t h e s e n s e of w h a t i n t e r e s t rate...(INTERJECTION).

20 152 Q. But you w e r e n o t a b a n k ?

21 A. No.
22 153 Q. They w e r e a s k i n g y o u r a d v i c e a s t o w h e r e t o p u t the
23 funds?
24 A. They w e r e a s k i n g me w h e t h e r I c o u l d m o n i t o r those
25 f u n d s on t h e i r behalf.
26 154 Q. M o n i t o r i s a word you u s e ; I d o n ' t u n d e r s t a n d it.
27 Your c l i e n t s h a v e f u n d s a n d t h e y come i n t o you.
28 What do t h e y a s k you t o do?
29 A. They w o u l d s a y 'We h a v e f u n d s o f f s h o r e ' wherever
31
 1 t h e y m i g h t h a v e b e e n ' C a n you l o o k a f t e r t h e s e f u n d s
2 for me.'
3 155 Q. "Can you l o o k a f t e r t h e s e f u n d s . " What d i d that
4 mean?

5 A. Would you e n d e a v o u r t o g e t t h e b e s t i n t e r e s t rate.

6 Would you m o n i t o r t h e f u n d s . '
7 156 Q. Take i t s l o w l y . Would you e n d e a v o u r t o g e t t h e b e s t
8 interest rate. Were t h e y a s k i n g you t o change
9 w h e r e t h e i r f u n d s w e r e i n t o some o t h e r financial
10 institution?
11 A. I d o n ' t t h i n k t h e y would come i n a n d s a y 'We h a v e
12 funds. W i l l you c h a n g e them f o r some o t h e r
13 financial institution.' I t h i n k a d i s c u s s i o n would
14 h a v e a r o s e w i t h them t h a t t h e y w o u l d h a v e a d v i s e d me
15 t h a t t h e y h a d £X i n f u n d s and s a y 'Can you l o o k
16 after t h e s e f u n d s on my b e h a l f . '
17 157 Q. What d o e s t h a t mean?
18 A. I t means t h a t t h e y m i g h t n o t want t o correspond
19 d i r e c t l y w i t h whatever f o r e i g n bank t h e y were u s i n g .
20 They m i g h t n o t w a n t t o g e t m a i l r e c e i v e d from
21 f o r e i g n b a n k s on t h e b a s i s of m o n t h l y statements.
22 They w o u l d n ' t f e e l t h a t n e c e s s a r i l y c o m p e t e n t about
23 l o o k i n g a t whether t h e funds s h o u l d be p l a c e d
24 o n e month o r t h r e e m o n t h s o r s i x m o n t h s . And t h a t
25 t h e y w o u l d l i k e me t o l o o k a f t e r t h o s e factors.
26 158 Q. What d i d you do t h e n ?
27 A. I would p r o b a b l y a d v i s e them a t some s t a g e that
28 t h e r e would be a f a c i l i t y available through
29 G u i n n e s s & Mahon.
 1 159 Q. You t h e n c o n t a c t e d G u i n n e s s & Mahon?

2 A. Yes.

3 160 Q. You u s e d t h e word " f a c i l i t y . " What d o e s t h a t mean

4 in this connection?

5 A. I t means I w o u l d p r o b a b l y h a v e contacted

6 Des T r a y n o r . I would have s a i d ' I h a v e a client

7 — f o r t h e m o s t p a r t h e w o u l d n ' t know who my c l i e n t s
8 were — t h a t wishes t o have funds m o n i t o r e d abroad
9 by me.'
10 161 Q. D o n ' t u s e d t h e word " m o n i t o r e d " b e c a u s e I don't
11 u n d e r s t a n d what i t means. You h a v e a client.
12 What i s h e t o do?
13 A. Des T r a y n o r i s t o g i v e me a n a c c o u n t n u m b e r , a
14 reference, a b a n k where t h e c l i e n t who w o u l d h a v e

15 t h e funds would have t o g i v e i n s t r u c t i o n s t o his

16 b a n k t o h a v e t h e f u n d s moved. Those funds —
17 I d o n ' t understand t h e s e t h i n g s e i t h e r — might be
18 moved t o a r e c e i v i n g b a n k .
19 162 Q. This i s very important. I f you d o n ' t u n d e r s t a n d it,
20 I u n d e r s t a n d even l e s s . Let us take a t y p i c a l
21 c l i e n t w i t h funds i n J e r s e y . You t e l l Mr. Traynor
22 that this client is dissatisfied. What d o e s
23 Mr. T r a y n o r t h e n do?
24 A. He g i v e s me c o d e d r e f e r e n c e s . I d o n ' t remember b u t
25 i t might well be a reference t o a bank account in
26 London f o r so and s o , for t h e account of s o and s o .
27 163 Q. What was t h e b a n k ?
28 A. Mr. C o s t e l l o , I d o n ' t remember a n d I am s u r e those
29 i n s t r u c t i o n s would h a v e v a r i e d o v e r t h e years.
33
 1 164 Q. What was t h e a c c o u n t , i n whose name was t h e account
2 t o be placed?

3 A. I have a d i f f i c u l t y answering t h a t question, not

4 wanting t o be uncooperative. A l l I am s a y i n g is

5 t h a t Mr. T r a y n o r w o u l d b e s e e k i n g t o g e t t h e f u n d s

6 under h i s c o n t r o l and t h e r e i s a t r a n s f e r process.

7 165 Q. You m u s t h a v e known t h e f i n a n c i a l institution in
8 which your c l i e n t s 1 s funds were going t o be p l a c e d ?
^ 9 A. The o n l y a n s w e r I c a n g i v e t o t h a t i s I d o n ' t recall

10 because over the years they probably used d i f f e r e n t

11 financial institutions.
12 166 Q. T e l l me some of t h e m t h a t w e r e u s e d that
13 Mr. T r a y n o r w o u l d h a v e t o l d you a b o u t . G i v e me t h e
.14 names of some o f t h o s e , Mr. Stakelum?
15 A. I t i s very difficult under oath, but l e t us try
16 G u i n n e s s & Mahon London f o r a s t a r t . I don't know.
17 B u t i f i t was G u i n n e s s & Mahon London, i t would

18 p r o b a b l y b e a c c o u n t of s o a n d s o , r e f e r e n c e so and

19 so e t c . e t c . . But I am n o t a b s o l u t e l y p o s i t i v e of
20 that. I t c o u l d a l s o v a r y d e p e n d i n g on t h e currency.
21 I f i t was d o l l a r s i t m i g h t b e s o m e t h i n g else.
22 167 Q. What o t h e r f i n a n c i a l i n s t i t u t i o n d i d he t e l l you
23 t h a t t h e money was g o i n g t o b e d e p o s i t e d in?
24 A. I d o n ' t know, I j u s t d o n ' t know. I t would be a
25 once-off instruction. I d o n ' t know. It probably
26 w o u l d d e p e n d on w h e r e t h e f u n d s w e r e coming f r o m
27 too.
28 168 Q. Do y o u r b e s t . I am s u r e you a r e u n d e r strain,
29 Mr. S t a k e l u m . T e l l me t h e numbers of other
1 i n s t i t u t i o n s t h a t c l i e n t s o f y o u r s h a d money
2 d e p o s i t e d a s a r e s u l t of your c o n t a c t with
3 Mr. Traynor?
4 A. I j u s t cannot answer t h a t . That i s not wanting to
5 be uncooperative, I j u s t cannot remember.
6 169 Q. Why c a n ' t you remember?
7 A. How do I a n s w e r a q u e s t i o n o f why I c a n n o t remember?
8 170 Q. F o r e x a m p l e , w e r e a n y of t h e f u n d s l o d g e d i n a n y of
9 t h e G u i n n e s s & Mahon s u b s i d i a r i e s i n Cayman o r in
10 t h e Channel Islands?
11 A. I don't think so. But I t h i n k t h e f u n d s w o u l d b e
12 i n i t i a l l y l o d g e d somewhere maybe f o r t h e a c c o u n t of
13 G u i n n e s s Mahon Cayman, r e f e r e n c e number s o a n d s o ,
14 maybe f o r t h e a c c o u n t i n G u i n n e s s & Mahon London f o r
15 G u i n n e s s & Mahon D u b l i n . I am n o t t o o sure.
16 You w o u l d g e t s p e c i f i c instructions.
17 171 Q. I t may h a v e b e e n t h e a c c o u n t of G u i n n e s s & Mahon i n
18 D u b l i n o r G u i n n e s s & Mahon i n London. Was t h i s the
19 .offshore b a n k . w e a r e t a l k i n g a b o u t , G u i n n e s s & .Mahon
20 Cayman T r u s t , t h e A n s b a c h e r b a n k . They w o u l d h a v e
21 been lodged i n i t s account i n Dublin or lodged in
22 i t s a c c o u n t i n London?
23 A. I t may w e l l h a v e b e e n , I don't remember.
24 172 Q. B u t you a r e u n d e r o a t h now?
25 A. That's right.
26 173 Q. You a r e u n d e r o a t h . Can you s a y t h a t f u n d s your
27 c l i e n t h a d a s k e d you i n r e l a t i o n t o a s s i s t a n c e were
28 l o d g e d i n an a c c o u n t i n t h e name of G u i n n e s s Mahon
29 Cayman T r u s t i n D u b l i n o r i n London?
1 I c a n n o t remember. I suspect that some o f the

2 instructions g i v e n a t t h e t i m e w o u l d b e w h a t was at

3 the best r e q u i r e m e n t s o f t h e G u i n n e s s & Mahon b a n k ,

4 what t h e i r i n t e r n a l ...{INTERJECTION).

5 A few m i n u t e s a g o y o u t o s a i d t o me t h a t y o u g a v e

6 Mr. T r a y n o r i n s t r u c t i o n s and t h a t you transferred

7 f u n d s t o him and t h e y were t r a n s f e r r e d offshore, is

8 t h a t not r i g h t . D i d n ' t y o u s a y t h a t t o me a few

9 minutes ago?

10 They were p r o b a b l y o f f s h o r e already. I thought we

11 were t a l k i n g about a client...(INTERJECTION).

12 They were offshore a l r e a d y you think?

13 Yes, most of t h e funds were o f f s h o r e already.

14 A l l t h e f u n d s o f t h e s e c l i e n t s we a r e t a l k i n g about

15 were offshore. Did you e v e r h a v e c l i e n t s coming in

16 t o you w i t h funds t h a t w e r e n ' t offshore?

17 Yes.

18 What w o u l d h a p p e n t h e n ?

19 At d i f f e r e n t stages, in the early stages I think

20 I r i s h pounds could be converted without any problem

21 into Sterling. I t i s o n e a n d t h e same i n the

22 1970's. T h e n - t h e y c o u l d b e moved f r o m Sterling.

23 Were t h e y p u t o f f s h o r e , the funds?

24 Yes.

25 Where?

26 A l l I know i s t h a t w i t h Des T r a y n o r I w o u l d h a v e

27 a s s u m e d G u i n n e s s Mahon Cayman T r u s t , later

28 Ansbacher. But i t c o u l d w e l l h a v e b e e n

29 C o l l e g e T r u s t e e s o r G u i n n e s s & Mahon G u e r n s e y .

36
1 180 Q, One o r t h e other?
2 A. Yes, I assume one o r t h e other.

3 181 Q. Did a n y of y o u r c l i e n t s t o y o u r k n o w l e d g e establish

4 t r u s t s w i t h t h e a s s i s t a n c e o f G u i n n e s s & Mahon w i t h
5 Mr. T r a y n o r e i t h e r i n t h e Cayman I s l a n d s o r i n the

6 Channel Islands?

7 A. Not t o my k n o w l e d g e .

8 182 Q. None o f t h e m t o l d you t h a t t h e y h a d d o n e this?

9 A. No.
10 183 Q. Mr. T r a y n o r d i d n ' t t e l l you t h a t h e was g o i n g to
11 s u g g e s t t h i s t o them?
12 A. No.
13 184 Q. You a r e p r e t t y c e r t a i n on t h a t o r a r e you d o u b t f u l
14 about it?
15 A. I am n o t a w a r e c e r t a i n l y of a n y c l i e n t s that
16 e s t a b l i s h e d such t r u s t s . I am n o t a w a r e o f any
17 that did.
18 185 Q. If they didn't establish t r u s t s , you a r e a w a r e o f
19 c l i e n t s who t r a n s f e r r e d funds offshore?
20 A. Yes, t h a t ' s right.
21 186 Q. We w i l l b r e a k now f o r a c u p of c o f f e e ,
22 Mr. S t a k e l u m , for about t e n minutes or so.
23
24 SHORT ADJOURNMENT
25
26
27
28

29
Appendix XV (158) (1) (b)
 Our Ref: C/S10/NM „fB 5ZT ...' i.

18"1 October 2000

Mr. Jack Stakelum
"Fairmont"
BaUyronan Road
^ Kilpedder
Co. Wicklow
Strictly Private & Confidential -Addressee Only
Dear Sir
I refer to your letter of 11 October 2000, and I reply an my own behalf, and on behalf of my
colleagues, Mr. Justice Dedan Costdlo andMr. Paul Rowan.
We now wish to examine you under oa& concerning the matters set out in our two letters dated
30 August 2000 and 21 September 2000. To that"end, I propose that an interview would take
place in our offices at the above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor attoeabove
phone number to confirm either date, or to make mutually convenient alternative arrangements if
those dates do not suit yoa
We note your refusal to provide us with names of your clients prior to examination. I must point
out to you that you are obliged by law to provide us with ibis information we have required of
/-*« you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of the Companies Act 1990 imposes a duty upon you to
comply with our requirement, and, in the case of a refusal to do so, mdces provision for the
matter to be dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
rdation to the transfer of funds to either of those islands. We require this information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidious to disclose the identity of your clients. Once again, I must
point out to you that you are obliged to do so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain them.
Yours faithfully

Noreen Mackey B.L.

Appendix XV (158) (1) (c)
 "FAIRMONT"
JACK STAKELUM BALLYRONAN ROAD
CHARTERED ACCOUNTANT .
TELEPHONE: 2810646 FAX: 281064S K1LPEDDER
MOBILE: 087 2854660 CO. WICKLOW

The Inspectors
3-Floor kiM a
Trident House H» AO* »
Blackrock
CO. ffffffMW

6 November, 2000

Dear Sirs,
Withreference to your letter of the IB* October, «nd in particular the third
paragraph, I should point out that I did not refiise as such to provide die information in
question, merely that I should be afforded the opportunity to argue why I should not be
asked to drvulge such information. The pereons in question dealt with me on an
understanding of confidentiality, and aa the Inspectors will surely appreciate, it is difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point out forcefully in your letter, you are not prepared to allow
me that opportunity and you have referred tothe legal position. In the circumstances, I
attach a list of the names and addresses of the persons in questioa
Yours&ithfully,

End;

V.A.T. Number 2354485K

 : urti&L 20®
t

Olga Gray, 9 Essen Hoad, Onnande 2091, Johannesburg. South Africa.

rv
Appendix XV (158) (1) (d)
 (wmT)
JOHN J. STAKELUM
"Fairmont"
Ballyronan Road,
Kilpedder, Co. Wicklow.

21 February 2001.

The High Court Inspectors, 'y g JQJfl

3 r i Floor,
Trident House,
Blackcock,
Co. Dublin.
Re: Interviews with the Inspectors on 8/11/2000 and 6/12/2000.

Dear Inspectors,

The content in sections I and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000.
1. The Consultancy Business I set np in 1975.
* •
•

In December 1975 I decided to set up a business that would provide a general financial
Consultancy service to clients. I had identified the market need in Haughey Bo land & Company
during my work but more particularly during ray receivership, liquidation and financial
restructuring experience. The services I decided to focus on were:

• Preparation of property assembled requestsfor financing from banks.

• Preparation of well constructed projected cash flow and profit and loss statements.
• Accompanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
for the timely production of them.
• Being a sounding board for all kinds of operating issues - both problems and perceived
opportunites.
• Guidance on where to go and how to request professional services.
• Helping businesses in difficulty to get bade to profitability or to move logically to
receivership or liquidation.
• Actingfor clients in the purchase or sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in the name of Business
Enterprises Limited from December 1975 until myretirement on the 31 October 1998. This
business was busy, demanding and successful. Typically, it occupied well over 100% of 50-
hour weeks. •
2. The service I gave to persons who wished to holdftinds oflshore.

Involvement with the savings of clients in anyrapacitywhatsoever was not envisaged in my

original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards this my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
• I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
• I would neither issue'nor obtain.receiptsfor movements in funds. Neither would I keep any
ledger recprds, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisagedfor this service but over time it became necessary to
recover costs on a case by case basis.
My operating procedurefor this service had butfour components:

• A deposit account in G&M that I have described as a hotchpotch account

• A manual memorandum record I kept in my office under my personal control.
• A float account In AIB.
• A monthly reconciliation of the sum of the memorandum records with the sum of the
account(s) in G&M and any float balances.
In the interest of completeness perhaps I should add also:

• G&M would be aware of the total funds I had in my hotchpotch account.

• G&M would not be aware of the names of the depositors whose funds, in aggregate,
comprised the balance in the hotchpotch account albeit that a name and an amount could
surfece as part of another business transaction with the bank, e.g. a back-to-back ban.
• Some of my clients would be aware generally that the funds they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were offshore but would have
no awareness or care about the name of the bank in which their money was deposited.
• Only I knew the names in the memorandum account and only I knew the ownership of the
balance in the float account kept in ALB.
5. The information requested by Ms. Mackey on the 6 December 2000.
The information requested by Ms. Mackey on 6 December' 2000 is given in the three schedules
that are appended to this letter.
Schedule 1 relates to the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had offehore deposits in GAM through my procedure.

Yours sincerely,
 SCHEDULE 1

Name. Offshore Backto Dote Deposit Dote Deposit Source of Funds Source of Funds
Deposits Bock loan. Opened Closed Offshore Irish Pounds.

Olga Gray. Yes. No. Md 1980s. & 1987/88. All. None.

Appendix XV (159) Mr Gerard Keane
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Gerard Keane.

a) Transcript of evidence of Mr Gerard Keane dated 30 May 2000.

b) Unsworn statement of Mr Gerard Keane dated 3 May 2000.

c) Internal Guinness and Mahon banking report of February 1980.

d) Application to make payment to a non-resident of the state dated 28

February 1990.

e) Cheque in favour of Beesley Properties Inc of 26 March 1990.

f) Letter of 27 March 1990 - Ansbacher Limited to Guinness and Mahon.

g) Internal print-out of GMCT/College - 31 May 1988 to 20 June 1988.

h) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

i) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

j) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

k) Letter of 21 February 2001 and enclosuresfrom Mr Stakelum to

Inspectors.

1) Extractfrom a statement dated 22 September - Mr Jack Stakelum to the

Inspectors.
Appendix XV (159) (1) (a)
PRIVATE EXAMINATION OF MR. GERARD KEANE

UNDER OATH

ON TUESDAY, 30TH MAY 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. GERARD KEANE

Represented by: MR. E. BUTLER

L.K. SHILEDS SOLICITORS

39/40 UPPER MOUNT STREET

DUBLIN 2
 1 THE EXAMINATION COMMENCED ON TUESDAY, 30TH MAY 2000

2 AS FOLLOWS:

5 MR. JUSTICE COSTELLO: Mr. Keane, we will start

6 our interview then and I

7 will introduce myself. I am Declan Costello and on

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

9 we are the inspectors, as you know, appointed by the

10 High Court to investigate the affairs of the

11 company. I should explain to you Mr. Keane that

12 this, of course, is not a court and it is not a

13 tribunal. It is an interview and we will ask you

14 questions and we will ask Ms. Cummins to administer

15 the oath to you in a moment.

16

17 If during the course of the questions you wish to

18 take legal advice, please tell us and we will stop

19 asking you questions and you can take legal advice

20 and similarly should your solicitor in the course of

21 the questioning wish to advise you on any matter, he

22 can indicate this to us and we will stop and he can

23 advise you so you understand how we progress?

24 A. Yes.

25 MR. JUSTICE COSTELLO: Mr. Keane, I will ask

26 Ms. Cummins to administer

27 the oath to you now?

28

29

3
 1 MR. GERARD KEANE, HAVING BEEN SWORN, WAS EXAMINED BY

2 MR. JUSTICE COSTELLO AS FOLLOWS:

4 1 Q. MR. JUSTICE COSTELLO: Mr. Keane, could I ask you

5 to begin by just briefly

6 giving an outline of your business career and the

7 companies through which it was carried on?

8 A. From the very beginning?

9 2 Q. Just briefly, but briefly, how did you start in

10 business and what was your business Mr. Keane?

11 A. Initially I worked for a company called Hodges many

12 years ago and then I went on to another company

13 called Monsell Mitchell where I was a wall coverings

14 manager. From then on I started up, the current,

15 the company at the moment in partnership with two

16 other people and it just went on from there.

17 3 Q. What was the name of the company?

18 A. Gerry Keane Limited.

19 4 Q. Was it Gerry Keane?

20 A. G-E-R-R-Y Keane.

21 5 Q. Gerry Keane Limited, yes?

22 A. Gerry Keane Limited.

23 6 Q. When was that formed, Mr. Keane, do you remember

24 just roughly?

25 A. 1972 I think.

26 7 Q. Yes?

27 A. 1972.

28 8 Q. What was the business it carried on?

29 A. Retail and wholesale wallpaper and paint.

4
 1 9 Q. Who were the other shareholders in the company

2 besides yourself?

3 A. Initially it was Bill Quinn, myself and you will

4 have to give me a moment.

5 10 Q. Of course, this was initially. As it developed then

6 what happened?

7 A. Eventually Mr. Quinn and I bought out the third

8 partner.

9 HQ. When would that have been about?

10 A. It would have been about two years later.

11 12 Q. I see, around 1974?

12 A. Around 1974/1975, yes.

13 13 Q. Yes?

14 A. Then eventually I actually bought Mr. Quinn out.

15 14 Q. When was that?

16 A. That would have been about 1983/1984.

17 15 Q. You continued on the business, where was the

18 business carried on from?

19 A. A place in 14 Talbot Street.

20 16 Q. 14 Talbot Street?

21 A. Yes.

22 17 Q. Is that a retail shop there?

23 A. Retail, yes.

24 18 Q. You have a retail shop and where Mr. Keane have you

25 been living?

26 A. I was living originally in Mount Alton in

27 Rathfarnham.

28 19 Q. Yes?

29 A. That was while I was married and I was separated. I

5
 1 lived in various apartments for a while and

2 eventually bought 54, Heytesbury Lane.

3 20 Q. That was your house then was it?

4 A. That is my house.

5 21 Q. When did you buy it do you remember?

6 A. I think around 1988/1989.

7 22 Q. Can you be a bit more definite on that, can you

8 remember which year it was?

9 A. Let me think now. That would have been I would say

10 it was 1988.

11 23 Q. Mr. Keane, I would just like to...(INTERJECTION)?

12 A. Sorry, Sean Nolan, Nolan is the other man.

13 24 Q. He is the other man?

14 A. Yes.

15 25 Q. Mr. Nolan was with you then in the business for a

16 couple of years?

17 A. Yes, they were actually in the financial end. I

18 actually ran the business.

19 26 Q. Just arising from that, you must have had a firm of

20 accountants to do your accounts Mr. Keane?

21 A. Our accounts were always from the start done by

22 Niall Brophy.

23 27 Q. Niall Brophy?

24 A. Yes.

25 28 Q. Did you have a solicitor?

26 A. Nothing, not a regular solicitor, no, I would not

27 say. We had a fellow who handled bits and pieces,

28 like a chap called Daire Walsh.

29 29 Q. Where did he practice?

6
 1 A. Daire was on Fitzwilliam Square.

2 30 Q. Can you remember the firm he was in?

3 A. It was Daire Walsh.

4 31 Q. Daire Walsh?

5 A. Yes.

6 32 Q. Had you any other solicitor who acted for you?

7 A. The latest was the purchase of a warehouse and it

8 was a chap called John Nelson from Templeogue.

9 33 Q. Mr. Keane, would you just look at the unsworn

10 statement that you sent to us (Exhibit 1)?

11 A. Yes.

12 34 Q. Do you see that in the third paragraph:

13 "I can only speculate that monies

invested by Mr. Jack Stakelum might
14 have been deposited."

15 Why do you say that?

16 A. Because I do not actually know.

17 35 Q. No but why do you speculate they might have been?

18 A. Because in the case that I knew that he had monies

19 and that I knew it was somewhere.

20 36 Q. Yes but what made you think it might have been in

21 Ansbacher?

22 A. Because I did not know what Ansbacher was until I

23 got a letter from the Revenue. I had never heard of

24 it.

25 MR. KILLEEN: If we could perhaps

26 interrupt and clarify the

27 situation?

28 MR. JUSTICE COSTELLO: No, I am sorry, I am

29 interviewing the witness

7
 1 and you can advise him.

2 MR. KILLEEN: If we could perhaps have a

3 moment with our client

4 then?

5 MR. JUSTICE COSTELLO: Yes, if it is to give him

6 advice, please go ahead.

7 SHORT ADJOURNMENT
o
o
9 A. The only reason I am speculating there is because

10 you actually wrote to me in connection with

11 Ansbacher.

12 37 Q. MR. JUSTICE COSTELLO: I see but did

13 Mr. Stakelum not tell you

14 what he did with the money you gave him?

15 A. No, never.

16 38 Q. Not at all, ever?

17 A. Ever.

18 39 Q. Tell me a little bit more about how that came about,

19 that arrangement came about. You say in the next

20 paragraph:

21 "I have asked Mr. Jack stakelum to

furnish to me any books or records
22 pertaining to funds held with him for
the purposes of investment from
23 approximately 1983/1984 until 1996."

24 Was that when you started with Mr. Stakelum?

25 A. In my recollection it would have been around

26 1983/1984, yes.

27 40 Q. Tell me how that came about?

28 A. It would have been around the time of the change of

29 partnership when Mr. Quinn and I parted. I was

 1 introduced to Mr. Stakelum.

2 41 Q. By whom?

3 A. By a gentleman that knew both of us in the golf

4 club.

5 42 Q. Who was it?

6 A. It was a fellow called Bertie Wojmar.

7 43 Q. Sorry?

8 A. Wojmar. W-O-J-M-A-R. Bertie Wojmar.

9 44 Q. Wojmar, yes?

10 A. Yes and he introduced me to Jack and suggested that

11 he might be of help to me because I was more on the

12 sales side of the company.

13 45 Q. In what way a help?

14 A. To help me go to the banks and talking to the banks

15 about money and all the rest, as a financial

16 advisor.

17 46 Q. To advise you financially?

18 A. Yes.

19 47 Q. That was when in 1982/1983?

20 A. As far as I can remember it would have been around

21 then, yes.

22 48 Q. Did you go to see Mr. Stakelum?

23 A. I did.

24 49 Q. Where did you see him?

25 A. In Clyde Road.

26 50 Q. In his offices in Clyde Road?

27 A. 17, Clyde Road, yes.

28 51 Q. What was the terms on which you engaged with him,

29 presumably you agreed to pay him?

9
 1 A. Yes, I paid him a retainer.

2 52 Q. What was the service he was to give you?

3 A. He was to look at the banks, keep the banks happy

4 whenever he was going on alright and if I needed

5 loans or whatever he would do all the negotiation

6 and did it very successfully.

7 53 Q. Negotiate loans for you?

8 A. Yes.

9 54 Q. Yes, that is not everything, Mr. Keane, there must

10 have been more arrangements made?

11 A. In what way?

12 55 Q. Just from what you say in your statement.

13
"I have asked Mr. Stakelum to furnish
14 to me any books or records for the
purposes of investment from
15 approximately..."?

16 A. I did pass some monies.

17 56 Q. That is what I want you to tell me about Mr. Keane?

18 A. Sorry, I did pass him some monies.

19 57 Q. Tell me about -- no, no. Mr. Keane, listen to me,

20 this is a very serious investigation?

21 A. Yes, I understand that.

22 58 Q. It is no good being vague, you passed him some

23 monies. It is no good saying that to us. Our duty

24 to the court is to get full details of these matters

25 so I want full details now please?

26 A. That is the way it went. We passed..(INTERJECTION).

27 59 Q. Please Mr. Keane. Mr. Keane, can you listen to the

28 question. I want you to describe the conversation

29 you had with Mr. Stakelum about you giving him

10
 1 monies and what he was proposing to do with the

2 monies and when those conversations started?

3 A. I would say they started fairly soon after.

4 60 Q. In 198 --?

5 A. I would say in 1983, in that area, yes.

6 61 Q. That was in his?

7 A. It would have been in Clyde Road, yes.

8 62 Q. Tell me what you said to him and what he said to

9 you?

10 A. I just said that to him that if I had

11 some...(INTERJECTION).

12 63 Q. Sorry?

13 A. I said to him if I had some money.

14 64 Q. If I had some money, what?

15 A. To put it away.

16 65 Q. Who would put it away?

17 A. Would he put it away for me.

18 66 Q. What do you mean by that?

19 A. In other words, put it away wherever the monies were

20 to avoid --.

21 67 Q. Tax?

22 A. Yes, probably, yes.

23 68 Q. What made you think that Mr. Stakelum might help you

24 to avoid tax?

25 A. Obviously it must have been said to me by somebody.

26 69 Q. By whom do you think?

27 A. I could not remember that.

28 70 Q. Pardon?

29 A. I could not remember that exactly who.

11
 1 71 Q. This must have been a fairly important point?

2 A. It must have been. It must have been himself.

3 72 Q. Himself, he might have said to you that he could, if

4 you had funds he could help you put them away?

5 A. Yes, I would say so.

6 MR. KILLEEN: I think if we could have

7 one moment with our client

8 because his recollection is not as good?

9 MR. JUSTICE COSTELLO: No, I am sorry, I must

10 explain what your role is

11 and what our role is and what the witness's role is.

12 You are not entitled to tell the witness pieces of

13 evidence that he is forgetting. If he is forgetting

14 them, that is fine and he can tell us later on, he

15 has forgotten but you can advise him on any legal

16 point and if his recollection is not good on any

17 point, he can tell us.

18 MR. BUTLER: Judge, I do not wish to

19 involve myself

20 unnecessarily in this but I would make a suggestion

21 and I hope it is regarded as helpful. I think that

22 the way the question is being put makes it quite

23 difficult for the witness to deal in the way that

24 you would wish him to deal with the question.

25 MR. JUSTICE COSTELLO: Very well. I am handling

26 this interview Mr. Butler.

27 MR. BUTLER: I fully appreciate that.

28 73 Q. MR. JUSTICE COSTELLO: I am handling this

29 interview and I am asking

12
 1 such questions as I think are necessary. We will

2 continue the interview now. I want you to help me

3 Mr. Keane, as far you can, in relation to the

4 arrangements you had with Mr. Stakelum?

5 A. Yes .

6 74 Q. About the funds. You said that he would put them

7 away?

8 A. Yes .

9 75 Q. Did he tell you what he would do?

10 A. He did not tell me exactly where he would put them.

11 76 Q. No, not exactly but did he tell you what he would

12 do?

13 A. He would just say that -- I would just give him

14 the...(INTERJECTION).

15 77 Q. No but did he tell you what he would do?

16 A. He said he would put it away, yes.

17 78 Q. Where?

18 A. He never said where.

19 79 Q. Did you know it was going to be invested, for

20 example, in Ireland or put on deposit in Ireland or

21 outside ireland?

22 A. To be absolutely truthful I thought it would be

23 going to Jersey. That was what I thought it was

24 always in Jersey but that was never clearly said to

25 me.

26 80 Q. What made you think that?

27 A. I thought that is what was to be done.

28 81 Q. Jersey, why did you think the money was going to

29 Jersey?
 1 A. I thought that is where all this sort of money went.

2 I was not that experienced at the time and I thought

3 this is where all this sort of money went to, to

4 Jersey or the Isle of Man.

5 82 Q. You gave him funds and that was in 1983, did you

6 continue then giving him funds from time to time

7 over the years?

8 A. Yes.

9 83 Q. What about the use of the funds that you gave him,

10 Mr. Keane, what happened to that? How did you use

11 the funds you gave him?

12 A. Very very little actually.

13 84 Q. How did you do it?

14 A. How did I spend it you mean?

15 85 Q. No, no, how did you get the funds?

16 A. Eventually I think 1996.

17 86 Q. No, no, I am not asking you about eventually,

18 Mr. Keane, I am just asking you throughout the

19 years, how did you get the funds?

20 A. I did not get them.

21 87 Q. You did not get them?

22 A. No.

23 88 Q. They were put away?

24 A. Put away.

25 89 Q. What about any of the interest or the profits that

26 might have been earned on the funds, were they paid

27 to you?

28 A. They actually added that on monthly.

29 90 Q. Monthly, did they?

14
 1 A. Yes.

2 91 Q. How did you know that, Mr. Keane?

3 A. You would just ring up and ask and they give you the

4 figure.

5 92 Q. You ring up, who would you ring up?

6 A. I would ring up Mr. Stakelum or Mr. Sealy who was

7 there at the time.

8 93 Q. Mr. Sealy and they'd tell you what had been entered

9 in?

10 A. How you stood, yes.

11 94 Q. Would you give them advice as to what to do with it

12 or would you take their advice?

13 A. I just took their advice.

14 95 Q. Took their advice?

15 A. Yes.

16 96 Q. Did they ever send you any written statement?

17 A. Never anything, no.

18 97 Q. You got monthly statements, you would ring them up

19 and ask them?

20 A. Possibly monthly, yes.

21 98 Q. You never asked where the money was, you assumed it

22 was in Jersey?

23 A. I assumed it was in Jersey, yes.

24 99 Q. I want you to tell me how the matter terminated, how

25 did this arrangement terminated in 1966?

26 A. I decided that in 1966 that I sort of would finish

27 up with Mr. Stakelum.

28 100 Q. 1996?

29 A. Sorry, I beg your pardon.

15
 1 101 Q. Yes, 1996?

2 A. 1996, I decided that I would finish up with

3 Mr. Stakelum from that point of view, from putting

4 away any more money and I asked him then to give me

5 back the monies that were there which he did.

6 102 Q. And whatever income they had earned?

7 A. Yes.

8 103 Q. I do not want to go into your private affairs but am

9 I correct in saying that you had nothing to do with

10 any of the companies with which we are concerned or

11 refer to in our letter after 1996?

12 A. Sorry?

13 104 Q. Did you have anything do with any of the companies

14 named in our letter after 1996?

15 A. No, no.

16 105 Q. I want you to tell us about your relationship with

17 Guinness & Mahon, the bankers?

18 A. With Guinness & Mahon, the bankers. I was

19 introduced to Guinness & Mahon, the bankers by

20 Mr. Stakelum who arranged an original loan for me as

21 far as I can remember, it was a long time ago.

22 106 Q. You met Mr. Stakelum in his office in 1983 and it

23 was some time after then that he introduced you, is

24 that it?

25 A. I would really have to think about the years.

26 107 Q. Do think about it, it is of some importance

27 Mr. Keane. I am asking you when was your first

28 relationship with Guinness & Mahon?

29 A. On reflection it could be a little bit earlier than

16
 1 that.

2 108 Q. Then you were not introduced to Guinness & Mahon by

3 Mr. Stakelum then?

4 A. No, I must have met with Stakelum a bit earlier.

5 109 Q. Sorry?

6 A. I must have met Mr. Stakelum a bit earlier than that

7 now on reflection.

8 110 Q. You see you talk about on reflection, Mr. Keane, in

9 the statement is what presumably you reflected on in

10 your statement (Exhibit 1)?

11 A. Yes.

12 111 Q. In your statement you said it was 1983/1984, is that

13 incorrect?

14 A. I would have to look up my diaries and honestly --.

15 112 Q. Doing the best you can, have you got diaries with it

16 down?

17 A. No, just my own little personal diaries would

18 probably have that at home somewhere.

19 113 Q. Probably have one of nearly 20 years old would you,

20 you have the 1983 diary?

21 A. Possibly, possibly yes.

22 114 Q. When you made that statement in the unsworn

23 statement (Exhibit 1)?

24 A. You see I did not think -- I know the importance of

25 it now but 1983.

26 115 Q. You see you were able to identify the time you went

27 to and it was the time of the break up of your

28 partnership, was it not, and somebody in the golf

29 club suggested that you see Mr. Stakelum?

17
 1 A. Yes, that's right. I would have still thought it

2 was about 1983. It night have been a year or so

3 earlier than that.

4 116 Q. A year or so?

5 A. Yes, it night have been a year or so earlier than

6 that.

7 117 Q. Who did Mr. Stakelum introduce you to?

8 A. In Guinness & Mahon, he just arranged it.

9 118 Q. Who did he introduce you to, who did you meet?

10 A. I did not meet anybody. He just arranged the loan

11 with Guinness & Mahon.

12 119 Q. I see?

13 A. I did go into Guinness & Mahon on one occasion and

14 sign, sign something or other.

15 120 Q. Did you not then have any dealings, personal

16 dealings with Guinness & Mahon then?

17 A. No.

18 121 Q. You did not know any of the personnel in Guinness &

19 Mahon?

20 A. No. I met Mr. Traynor. I met him but on a social

21 thing but otherwise I did not know anybody in the

22 bank.

23 122 Q. It was all handled then through Mr. Stakelum, is

24 that the position?

25 A. Yes.

26 123 Q. The loan that you obtained, was that a loan to your

27 company?

28 A. In Guinness & Mahon, yes.

29 124 Q. That Guinness & Mahon gave you?

18
 1 A. Yes.

2 125 Q. Did you have more than one loan from Guinness &

3 Mahon?

4 A. Yes, I think I had a second loan.

5 126 Q. That would have been later then?

6 A. It should have been a bit later. That might have

7 been to buy out my partner, Mr. Quinn.

8 127 Q. Did you not have a personal loan?

9 A. I did have a personal loan, yes, I beg your pardon.

10 That was to pay my wife, that is quite right.

11 128 Q. When was that?

12 A. That would have been in 1983.

13 129 Q. Do you remember the first loan you got? Do you

14 remember how much it was for?

15 A. I think it was about £40,000.

16 130 Q. Do you know what it was for?

17 A. The first loan to my recollection was to pay some

18 Sterling accounts in England.

19 131 Q. I would just like you to look at a bank report of

20 February 1980 at page 28. This is an internal

21 document from Guinness & Mahon, Mr. Keane (Exhibit

22 2) ?

23 MR. KILLEEN: We do not have this

24 document.

25 132 Q. MR. JUSTICE COSTELLO: 1980, I wonder if you have

26 got the right document?

27 A. Yes.

28 133 Q. It is the banking report, February 1980, do you see

29 that? Is that it, is that the document you have?

19
 1 A. Yes, yes.

2 134 Q. Do you see there, loans and overdrafts:

3
"In addition Sterling loans were
4 granted to Gerry Keane Limited
£50,000."
5

6 A. £50,000, yes.

7 135 Q. That seems to be your loan?

8 A. That was the start of the loan, yes.

9 136 Q. That is February 1980?

10 A. Sorry, yes, I did not think it was that far back.

11 137 Q. Do you remember the security that was given for that

12 loan?

13 A. Yes, I think on the first loan I got out from

14 Guinness & Mahon, I think Mr. Stakelum guaranteed

15 it. I am not a 100% sure about that.

16 138 Q. Do you know the security, if any security was given

17 for Mr. Stakelum's guarantee?

18 A. I do not know.

19 139 Q. You do not know?

20 A. No.

21 140 Q. The course of our investigations have indicated that

22 the loan which was granted to your company, and

23 which was granted to you personally was secured by a

24 deposit of what is now known as Ansbacher, did you

25 know about that?

26 A. I did not, no.

27 MR. KILLEEN: Perhaps we could have a

28 moment with our client,

29 Judge.

20
 1 MR. JUSTICE COSTELLO: Yes.

2 MR. KILLEEN: If we could possibly have

3 one moment with our

4 client, it is just because our client cannot hear

5 us.

6 MR. JUSTICE COSTELLO: Sure.

8 SHORT ADJOURNMENT

10 141 Q. MR. JUSTICE COSTELLO: I now want to come to

11 page 22 or 23. I want you

12 to look at an exchange control document in relation

13 to Heytesbury Lane. You see Mr. Keane this is form

14 E4 up there on the left-hand side (Exhibit 3)?

15 A. Yes.

16 142 Q. It is a central bank form and do you see at the

17 bottom there is a signature G. Keane, is that your

18 signature?

19 A. Yes, it is, yes.

20 143 Q. Do you see there it is addressed to the National

21 Irish Bank, the name and address of the bank to

22 which the application is made and you are the

23 applicant. Do you see that?

24 A. Yes.

25 144 Q. The amount of currency is Stg£98,000 Sterling?

26 A. Yes.

27 145 Q. The name and address of the payee is Beesley

28 Properties Inc. Who were Beesley Properties Inc.?

29 A. They were the people who originally bought the

21
 1 house.

2 146 Q. Yes, originally?

3 A. That bought the house, yes.

4 147 Q. When did they buy the house?

5 A. 1988 I would say it would have been.

6 148 Q. What is your association with Beesley Properties

7 Limited?

8 A. I asked at the time, Mr. Stakelum, that I found this

9 house and I could not get a loan at the time.

10 149 Q. Can I just interrupt you? I just want to know what

11 your association with Beesley Properties Inc., is?

12 A. I really had no association apart from signing the

13 documents.

14 150 Q. What do you mean by having really no association?

15 A. Mr. Stakelum arranged for the house to be bought by

16 Beesley & company.

17 151 Q. In 1988?

18 A. Yes, as far as I am aware 1988, yes.

19 152 Q. What money did he use to buy the property?

20 A. I do not know what monies he used.

21 153 Q. But was it not being purchased on your behalf?

22 A. It was being purchased on my behalf, yes. The money

23 would be money that was away obviously.

24 154 Q. Money away?

25 A. Yes.

26 155 Q. He used that money that you thought was in Jersey?

27 A. Yes.

28 156 Q. To buy this house?

29 A. That's right.

22
 1 157 Q. You see the name of the company, Beesley Properties

2 Inc.?

3 A. Yes.

4 158 Q. That was established, that was in Guernsey?

5 A. Yes, I see that, yes.

6 159 Q. You knew then that the house that you were buying

7 would have been owned by this Guernsey company?

8 A. Yes.

9 160 Q. And the money was money that you had given him to

10 look after?

11 A. Yes.

12 161 Q. In fact, it was your house in name of this company?

13 A. Yes.

14 162 Q. Do you see the date of this document?

15 A. Yes.

16 163 Q. On the 28th of the 2nd 1990?

17 A. Yes.

18 164 Q. Beesley Properties Inc., your company in Jersey

sold...(INTERJECTION).

19 A. I cannot say it was my company in Jersey.

20 165 Q. Perhaps I misunderstood what you said, I thought

21 you were agreeing with me that it was your company?

22 A. It was the company used to buy the -- I do not know.

23 166 Q. It was your money?

24 A. Yes, yes.

25 167 Q. The company owned the property?

26 A. I do not understand that, as far as I was just told

27 that you use this company to --.

28 168 Q. To what?

29 A. Buy the house.

 1 169 Q. To buy the house?

2 A. Yes and then ultimately buy the house back off them.

3 170 Q. That is what I am coming to now?

4 A. Yes, right.

5 171 Q. They bought the house?

6 A. Yes.

7 172 Q. With money that you had in the Channel Islands?

8 A. Wherever, yes.

9 173 Q. Then you bought the property from them?

10 A. Yes.

11 174 Q. Why did you do that?

12 A. That was the advice I was given?

13 175 Q. Who gave you that advice?

14 A. Mr. Stakelum.

15 176 Q. Mr. Stakelum?

16 A. Yes.

17 177 Q. Would you just look at page 24, a cheque. This is a

18 cheque from a firm of solicitors, Killeen

19 solicitors. It is payable to Beesley Properties. It

20 is for £96,439.20 (Exhibit 4)?

21 A. Yes.

22 178 Q. That is the purchase price of the house that you

23 bought?

24 A. Yes.

25 179 Q. Who were Killeen's, were they your solicitors?

26 A. No, they were Beesley's solicitors.

27 180 Q. Beesley's solicitors, yes. Beesley's solicitors

28 made out a cheque payable from their client's

29 account to Beesley's Properties?

24
 1 A. Obviously, yes.

2 181 Q. This cheque was to be, it was in Irish pounds and

3 you applied on behalf of Beesley's to transfer that

4 Irish pounds into Sterling, £98,000 Sterling, is

5 that right, that is on the form?

6 A. I did not apply.

7 182 Q. You signed, you signed it?

8 A. I signed the form obviously, yes, but all the

9 dealings were done by Mr. Stakelum.

10 183 Q. Sorry?

11 A. The dealings were all done by Mr. Stakelum, I would

12 just sign.

13 184 Q. You just did what he advised you to do?

14 A. Yes.

15 MR. BUTLER: Judge, I really do not

16 wish to interrupt because

17 I realise that it is prone to a reaction from you in

18 certain terms but to be helpful, the date on the E4

19 predates the date of the cheque because the E4 is

20 the 28th February 1990.

21 MR. JUSTICE COSTELLO: Yes.

22 MR. BUTLER: The cheque is the 26th

23 March and I think the

24 question you were putting was to the effect that the

25 proceeds had something to do with the E4 which the

26 dating does not, in fact, support.

27 185 Q. MR. JUSTICE COSTELLO: We can discuss that but if

28 you would just look,

29 Mr. Keane, at the second page, have you got the

25
 1 second page of the form. Application approved, the

2 27th March?

3 A. Yes .

4 186 Q. Just to come back to the question I was asking you.

5 This is an application in which you are the

6 applicant. It is on behalf of the -- it is to

7 transfer the money which was paid to Beesley

8 Properties Inc., by the cheque into -- it was the

9 proceed -- you see the purpose of the payment,

10 proceeds of sale there number 8 and it was to change

11 that money into Sterling. Did you sign that on

12 Mr. Stakelum's recommendation?

13 A. Yes .

14 187 Q. Would you just look at another document on page 21.

15 This is a letter from Mr. Traynor and it is signed

16 by his secretary, Ms. Williams, and it is to

17 Guinness & Mahon, you see that (Exhibit 5)?

18 A. Yes .

19 188 Q. It is dated the 27th 1990?

20 A. Yes .

21 189 Q. It is:

22 "Dear David, I enclose herewith cheque

in the sum of IR£96,439.20 payable to
23 Beesley Properties Inc., together with
photostat of Form E4?"
24

25 A. Yes .

26 190 Q.
"Would you please arrange to credit the
27 Sterling equivalent to Ansbacher
Limited Account No. 13154602 and advise
28 Sterling figure in due course?"

29
 1 A. I would not know anything about that.

2 191 Q. No, this would have been arranged by Mr. Stakelum

3 presumably?

4 A. Yes.

5 192 Q. The purchase price which you paid for the house

6 ended up in Ansbacher's account in Guinness & Mahon?

7 A. Evidently, yes. Not to my knowledge. I have no

8 knowledge of that.

9 193 Q. Whoever owned, whoever was entitled to the

10 beneficial ownership of the shares in

11 Beesley Properties now had money in Ansbacher

12 account in Guinness & Mahon?

13 A. Apparently, yes.

14 194 Q. Apparently so. Did you know that you had money

15 there?

16 A. No.

17 195 Q. Did you ever seek to draw out any money from the

18 Ansbacher account?

19 A. No.

20 196 Q. After this time 1990, did you ask Mr. Stakelum for

21 any sums, any payment out, after 1990?

22 A. After 1990, yes, in 1994.

23 197 Q. Yes?

24 A. I transferred some money out of the account.

25 198 Q. How much was that?

26 A. It was £100,000.

27 199 Q. You asked him for that sum. He would have arranged

28 it, you do not know how he got it, is that the

29 position?

27
 1 A. No idea.

2 200 Q. I want you to put another document to you, it is

3 page 27. This is an internal document from the

4 bank. If you see the top of it Guinness & Mahon

5 Cayman Trust/College, do you see that (Exhibit 6)?

6 A. Yes .

7 201 Q. If I could just pause there. That is a reference to

8 a firm called College Trustees in Guernsey. Did you

9 ever hear of College Trustees?

10 A. No.

11 202 Q. If you just look at then to the left Guinness &

12 Mahon Cayman Trust/College, c/o, then it gives the

13 Guinness Mahon Trust address and then it is a sundry

14 sub company account and do you see the 10th June

15 1988, lodged re: Beesley and there is a sum of

16 £1,4 83.28. Do you remember making any lodgement or

17 giving any money at that time in June of 1988, that

18 particular figure, to Mr. Stakelum for any reason?

19 A. No.

20 203 Q. You do not?

21 A. No.

22 204 Q. You tell us in your statement that you asked

23 Mr. Stakelum to furnish me any books or records

24 pertaining to funds held my him. When did you ask

25 him that?

26 A. When I got the letter, the note from --.

27 205 Q. The letter from us?

28 A. Yes, yes. I just asked him and...(INTERJECTION).

29 206 Q. Did you write to him or ring him up or what did you
 1 do?

2 A. I rang him up initially.

3 207 Q. What did you say to him?

4 A. He had gone out of business at that stage, he had

5 left his office and all that sort of thing at that

6 stage.

7 208 Q. He had left?

8 A. Yes, he closed his offices I think in 1998 and when

9 I rang him he said that he had no files. I have

10 written to him since or at least we have written to

11 him since and have had no reply so far.

12 209 Q. You say you are awaiting his reply but it looks as

13 if he cannot help in any way?

14 A. It does look that way, yes.

15 210 Q. Do you know was there anybody else carrying on his

16 particular business, that firm or did it close with

17 him?

18 A. I think it closed with him.

19 211 Q. With him?

20 A. Yes, the office.

21 212 Q. Business Enterprises Limited?

22 A. Yes, yes he still operates on his own.

23 213 Q. Does he?

24 A. Yes.

25 214 Q. Where does he operate?

26 A. Out in Kilpeddar. He still works for me as an

27 advisor.

28 215 Q. He works for you?

29 A. Yes, I still pay him a retainer to handle the bank

29
 1 matters and that sort of stuff.

2 216 Q. He acted as your advisor from the time you indicated

3 to us, 1983 or perhaps earlier and during that

4 period you also had your own accountant looking

5 after you?

6 A. Yes.

7 217 Q. Your own personal affairs, I suppose, and your

8 company's affairs?

9 A. Yes, yes.

10 218 Q. You did not inform your accountant of the monies

11 that you were giving to Mr. Stakelum?

12 A. No, no.

13 219 Q. Mr. Keane, we will break there for a cup of coffee

14 or a cup of tea if you would like now for about ten

15 minutes?

16 A. Right.

17 220 Q. And we will not have very many more questions to ask

18 you.

19

20 SHORT ADJOURNMENT

21

22 MR. JUSTICE COSTELLO: Mr. Keane, I have no

23 further questions to ask

24 you but my colleague may want to ask you a few

25 questions.

26

27 END OF EXAMINATION OF MR. KEANE BY

28 MR. JUSTICE COSTELLO

29

30
 1 MR. KEANE WAS EXAMINED, AS FOLLOWS, BY MS. MACKEY:

3 221 Q. MS. MACKEY: Mr. Keane, I just want to

4 clarify a few things that

5 I did not fully follow in the course of your

6 evidence. Getting back to the transaction where you

7 purchased your house back from Beesley?

8 A. Yes.

9 222 Q. We were looking at a cheque, I think you may still

10 have a copy of it (Exhibit 4)?

11 A. Yes, Killeen.

12 223 Q. Drawn, yes, on the client's account, Killeen

13 solicitors?

14 A. Yes.

15 224 Q. You have that there?

16 A. Yes, yes.

17 225 Q. What I wanted to ask you about that was, Killeen you

18 told us were solicitors for Beesley?

19 A. Yes.

20 226 Q. This is a cheque drawn by them on their client

21 account?

22 A. Yes.

23 227 Q. Which they were paying to Beesley. Did you then

24 reimburse Killeen solicitors? You were buying this

25 house, is that not right?

26 A. Yes.

27 228 Q. Where did the monies come from for the purchase of

28 the house?

29 A. Sorry, we borrowed that money. That money was

31
 1 borrowed from AIF. At one stage I think there were

2 two loans running with Guinness & Mahon which was

3 very expensive and Mr. Stakelum arranged to clear

4 them off by borrowing from AIF, a separate account

5 and that was paid off. Then after I think it was a

6 year or so after that, we asked AIF for a following

7 £90,000 to buy this house and those borrowings were

8 paid off.

9 229 Q. Can I just get clear now, if I could summarise what

10 happened with this house?

11 A. Right.

12 230 Q. In 1988 Beesley Properties purchased the house?

13 A. Yes.

14 231 Q. From some third party?

15 A. Yes.

16 232 Q. With monies that belonged to you that were, as you

17 thought, in Guernsey, is that right?

18 A. I would so, yes.

19 233 Q. That was the first thing?

20 A. Yes.

21 234 Q. Then the situation was the house was owned by in the

22 name anyway of Beesley Properties?

23 A. That's right.

24 235 Q. But purchased with your money?

25 A. Yes.

26 236 Q. You then borrowed money from AIF?

27 A. Yes.

28 237 Q. To purchase the house from Beesley?

29 A. Yes.

32
 1 238 Q. You gave that money to who?

2 A. It would have been to Beesley, honestly I do not

3 know.

4 239 Q. Beesley had already got money drawn by their own

5 solicitors. The cheque that Beesley got, the one

6 that he saw went into the Ansbacher account?

7 A. Yes.

8 240 Q. Was a cheque signed by their own solicitors drawn an

9 their client account. Were you a client of Killeen

10 solicitors?

11 A. No.

12 241 Q. No, so it was not drawn on your account?

13 A. No.

14 242 Q. That is clear now. You say you took out a loan from

15 AIF to finance this?

16 A. Yes.

17 243 Q. The loan that was taken out from AIF, there was a

18 draft or a cheque or something in

19 this...(INTERJECTION)?

20 A. As I understand it is this, that must have been

21 given to Killeen.

22 244 Q. It was given to Killeen?

23 A. That is the only way I can understand it because

24 they have written this so that draft must have gone

25 to Killeen.

26 245 Q. Since the money that Beesley used to purchase the

27 house in the beginning was your money?

28 A. It thought -- that is where it came from.

29 246 Q. No but at the very beginning?

33
 1 A. Yes.

2 247 Q. When Beesley first bought the house?

3 A. Yes.

4 248 Q. They used your money that was off-shore?

5 A. Yes, it would have been money that I would have

6 given to Mr. Stakelum.

7 249 Q. Yes so it was your money?

8 A. Yes, probably, yes.

9 250 Q. In paying them the same sum again were you not at a

10 loss?

11 A. No, I do not think so.

12 251 Q. Can you explain?

13 A. I might sound very vague but I really do not know.

14 It was all handled by other people.

15 252 Q. You cannot throw any further light on this?

16 A. I really could not, no, I really could not.

17 253 Q. That leads me to another point, Mr. Stakelum, as you

18 have explained there in your statement and again to

19 us this morning; has not furnished you with any

20 information?

21 A. No.

22 254 Q. Records or anything like that and you think that he

23 probably has not got any or will not be able to

24 help?

25 A. He told me that they were destroyed.

26 255 Q. He told you they were destroyed?

27 A. Yes.

28 256 Q. You just told us there before the break that he is

29 still your financial advisor?

34
 1 A. Yes, I still pay him a retainer, yes.

2 257 Q. Have you asked him specifically to clarify for you

3 where he put your money on deposit because

4 presumably he would remember that?

5 A. He said to me that -- I said to him, I said Jack,

6 this Ansbacher I had never heard of it until it came

7 in on the letter and he said there is a possibility

8 that it was there for some time. He said, I always

9 understood -- thought it was in Jersey, it has been

10 the transfer -- not just yours but there has

11 been monies transferred.

12 258 Q. Was this what he told you, I see. Did he tell you,

13 in fact, that he originally had put your money in

14 Jersey?

15 A. He told me it was away.

16 259 Q. No but now, when you went now to get the whole

17 position clarified with him and you said to him, you

18 had never heard of Ansbacher; did he say to you,

19 look, where I actually put your money was?

20 A. No, he did not say.

21 260 Q. Did you ask him where did he actually put it?

22 A. I asked him, I said to him I understood that all the

23 money was in Jersey, that I had never heard of the

24 Cayman Islands.

25 261 Q. Did he say that was right?

26 A. And he said, well it was like at times.

27 262 Q. He said it was?

28 A. At times it would have been in Jersey.

29 263 Q. He did say that it was in Jersey?

 1 A. It could have been in Jersey, yes.

2 264 Q. Then he said to you that?

3 A. He just said, I had said, could the money have been

4 in the Cayman Islands and he said, yes.

5 265 Q. You said something a minute ago that he said some of

6 it was transferred from time to time or what was

7 that?

8 A. I do not know exactly what the words were but that

9 is...(INTERJECTION).

10 266 Q. If you could try to remember?

11 A. The impression that I got was, it was shifted around

12 a bit.

13 267 Q. It was shifted around, thank you and just one other

14 matter, you mentioned when you were talking about

15 your first meeting with Mr. Stakelum and when you

16 retained him to act on your behalf, you mentioned a

17 Mr. Sealy, is he an associate of Mr. Stakelum?

18 A. Joe Sealy was a partner of Mr. Stakelums at that

19 time.

20 268 Q. Is he still working...(INTERJECTION)?

21 A. No, he is long gone. He is long gone. He is 10/15

22 years gone I would say.

23 269 Q. And he is still living is he?

24 A. I would say he is still living, yes.

25 270 Q. Do you know where he is?

26 A. I have no idea.

27 271 Q. You have no idea. I have no other questions, thanks

28 very much Mr. Keane?

29 A. Alright.
 1 END OF EXAMINATION OF MR. KEANE BY MS. MACKEY

3 FURTHER EXAMINATION OF MR. KEANE BY

4 MR. JUSTICE COSTELLO:

6 272 Q. MR. JUSTICE COSTELLO: Just one final matter,

7 Mr. Keane, which I think

8 is clear from what you have been telling us but just

9 so there can be no doubt about it. Did Mr. Stakelum

10 at any time tell you that he had established on your

11 behalf a trust?

12 A. No.

13 273 Q. Just again I think it is clear from your evidence,

14 but you gave the money to Mr. Stakelum and

15 Mr. Stakelum put it, you thought, in Jersey and am I

16 correct in saying that it was not any interest or

17 any profit was not returned for tax by you?

18 A. No.

19 274 Q. Thank you Mr. Keane. We will require you to come in

20 to sign the transcript when it is available next

21 week probably?

22 A. Right okay.

23

24 END OF EXAMINATION OF MR. KEANE BY MR. JUSTICE

25 COSTELLO

26

27 THE EXAMINATION WAS THEN CONCLUDED

28

29

37
 h

Y ^ W t s

NO 2LOOO
Appendix XV (159) ( l ) ( b )
 UNSWORN STATEMENT
OF
MR. GERARD KEANE

I refer to your letter of 1st March, 2000.

Firstly, I should mention that the matters raised in your letter are unknown to me in
general terms with the exception of my knowledge of these mattersfrom media
reports. I have no books or records pertaining to the matters raised in your letter of
1st March, 2000.

I can only speculate that monies invested by Mr. Jack Stakelum, Financial Advisor,
might have been deposited in Ansbacher (Cayman) Limited for a period unknown to
me.

I have asked Mr. Jack Stakelum to furnish to me any books or records pertaining to
funds held with him for the purposes of investmentfrom approximately 1983/4 until
1996 and I am awaiting his reply. At no stage was I aware of the precise location of
funds invested with Mr. Jack Stakelum and/or his company, Business Enterprises
Limited, as the investments were handled exclusively by Mr. Stakelum and/or
Business Enterprises Limited.

In approximately 19881 wished to purchase a house. At that time I was unable to

obtain a loan and I asked Mr. Stakelum to make funds available to me in this regard.
It may be the case that the funds that were made available to me were secured by
funds lodged in a deposit account, the location of which I do not know.

I note in your letter to me of 1st March, 1992, at paragraph 6 of Appendix C thereof;

you refer to the Exchange Control Acts (1954-1992). I do not know whether any
application was made on my behalf under the Exchange Control Acts (1954 -1992).
 ltd
Dated this J day of May, 2000

I j b J

GERARD KEANE
 I I

BANKING REPORT FEBRUARY 1980

MOBBY MARKET:

LOANS &
OVERDRAFTSs

M f M i t f a flttytiM j m n a m u granliff
:
to q«ggy kwmi L X i f a gso.oooy
 FORM E.4 EXCHANGE CONTROL ACTS For official
use only
' MISCELLANEOUS PAYMENTS 646186
AppOl(dn -to..ni«Ke.ii payment lo ^ non-resident ofthe State* other Country
than iMgoods, cash g i f t s ' l o a n s . s
"^ ^ .• 7• J*'--'?"
•r "•'.' ; •-»'
* V '
SECTION A ^'-Liif^i-
t^SC ALL APPLICANTS
Currency
N a m * a n d address. o f t b j n k . to ' " ' '
which application \s" . . S'.SSftMtt.
••••••<•••• — ' . BufcUswli
Amount
2. Na ivTaod •ad^rSsiT'ofapprTQ^nl | * F. f? .vK P.ftP. P......*.r..f.%...
•.-
•.4 A«/v t
EXChV;;w~ . J 54 H.ytetbury' Latie '
Dublin 4 ' I -
- 2 MAR 1990
Category
. 2i Flift.... h'h'oo r,.......

J
3.
proposed payjfienf 1 •

A m o u n t in words .JMjMi5x..l?Aii!fc..SfcflHMRii Source

pounds S t a r l i n g .

5. IrieB p o u n d equivalent! )
.
.* * : fi •
6. Name.:ar\.d; address of j
P l a t e a u Mignot, S t . Peter P o r e ,
pavee Guacnseyv..ehannel..I.alan.4a
. | ;_

7. Source oT fun'cjs for payment Conversion from Irish Pounds

(I.e. conversion from Irish
pounds or foreign currency •
income)
'The-"proceed* of sale of 54 -Heytesbury
8. P u r p o s e of payment
LantL, Dublin 4
(give full details).

DECLARATION BY APPLICANT
•J declare that the /Information I have given is c o r r e c t I a m aware that the giving of
false or misteajliiKi information is an'offence.
Signature.. Date.....l?»|.X.\M
('The State hiearis the Republic of Iraland)
I«Ote«/IOaOOO/l/88/FUTUHCPniW LT0/t64M
 SECT10if »-^8ANKS SHOULD COMPLETE 1, 2 ORfl BELOW, AS APPROPRIATE
Stamp of Bank
This transfer is effecied within the terms of
an Authority delegated by the Central
Bank of Ireland In
Exchange Control Notice EX.
. Paragraph

This transfer is effected under a specific approval.

given by the Central Bank of Ireland. The ; .
date and reference number.of this
approval are
Date, Reference No.,

3. T h « specific approval of tthe Central Bank is

requested for the transfer.

Oat* ra which peyment was met*»

SECTION C — F O R USE IN THE CENTRAL BANK Of- IRELAND,

Applhtttan A(>prov*}

CfiHTOAL BAWKttPIRELAND
Approval s U m p of the Central Bank of Ireland,
Exchange Control.
tr> MAR 1990
EXCHANGE CONTROl

NOTES
1. Permissions granted must be availed of within three months unless
un otherwise
specified.

Where the amount transferred is not full/ utilised tor the purpose* stated, the
applicant must arrange tor the balance to be repatriated and, if (n a currency
uther than Irish pounds, aold to an Ai.thc:iaed Dealer at the current rate of
exchange.

B A N K S S H O U L D R E M I T C O M P L E T E D FORMS T O T H E I R H E A D OFFICE
FOR L O D G E M E N T W I T H T H E C E N T R A L BANK O F I R E L A N D AS S O O N AS
T H E T R A N S F E R HAS B E E N COMPLETED.

Cer.irol Bank of tra'and. Exchange Control. P.O. Box 859. Dame Street, Dublin 2.
Telephone—01 -716666. Telex—31041.
 )

KILLEEN W A MOUNT
soucrroRs
COMMISSIONER FOR OATHS
J O1Y. SQUARE.
DUBUN .
Telephones: 740197
66Uppr (TCotwItStr—t 747823
TsMu: 128806
nurTotMEaMmor
M i ^ b.
H S r °
2 D
CUENTS ACCOUNT
±
1
••000 2 2 71" 1 5 - 1 5 Q & « : R U O U ^ i
Appendix XV (159) (l)(f)
ft

Please reply to:

42 Fitzwiiliam Square,
Dublin 2.
TO: 765144/763065
Rut: 612035

M. David Humphries, Esq.,

^Senior Manager - Operations,
Guinness 6 Mahon Limited,
17 College Green,
DUBLIN 2.

) Dear David,
I enclose herewith cheque in the s u j b of IRS96,439.20 payable
to Beealey Properties Inc., together with photostat copy of
Form B.4.
Would you please arrange to credit the Sterling equivalent to
Ansbacher Limited Account Mo.13154602 and advise Sterling
figure in due course.
Yours sincerely,

. JfPt Traynor.

JDT/AJW
Appendix XV (159) ( l ) ( g )
Appendix XV (159) (1) (h)
23 147 Q. When d i d t h a t start?

24 A. I -am i n c l i n e d t o b e l i e v e 1976 b u t i t m i g h t h a v e b e e n

25 1977. I w o u l d h a v e s t a r t e d o n my own i n l a t e 1975.

26 1 o n l y had one y e a r of o p e r a t i o n s i n 1975.

27 148 Q. Would y o u t e l l u s w h a t t h e a r r a n g e m e n t i n a general

28 way was w i t h Mr. T r a y n o r . How was t h i s service

29 operated?
 r

1 A. I f I c a n t a k e a t y p i c a l e x a m p l e , a c l i e n t may h a v e
2 a s k e d me t o l o o k a f t e r funds t h a t i n almost all
3 c a s e s t h a t I era a w a r e o f w e r e a l r e a d y abroad.
4 I w o u l d h a v e a s k e d Mr. T r a y n ' o r t o a d v i s e me w h e r e
5 t h e funds might be t r a n s f e r r e d to, and t h e n the
6 c l i e n t w o u l d i s s u e i n s t r u c t i o n s when I g o t the
7 t r a c k i n g r o u t e o r a c c o u n t name o r c o d e o r whatever
8 they might be.
9 149 Q. Could you n o t b e a l i t t l e b i t more s p e c i f i c because

10 . y o u know t h e s e t e r m s , I d o n ' t know. Would y o u m i n d

11 e x p l a i n i n g them t o us?
12 A. I f t h e c l i e n t w i s h e d t o p l a c e t h e f u n d s w i t h me a n d
13 t h e y w e r e i n some R o y a l Bank o f S c o t l a n d i n Jersey
14 or wherever.
15 150 Q. T h i s i s c l i e n t ' s of yours?
16 A. Yes.
17 151 Q- Why w o u l d t h e y w a n t t o p l a c e t h e i r f u n d s w i t h you?
18 A. They might b e unhappy a b o u t m o n i t o r i n g t h e funds in
...
19 t h e s e n s e of what i n t e r e s t rate...(INTERJECTION).
20 152 Q. B u t you w e r e n o t a b a n k ?
21 A. Mo.
22 153 Q. They were a s k i n g y o u r a d v i c e a s t o where t o p u t the
23 funds?
24 A. T h e y w e r e a s k i n g me w h e t h e r I c o u l d m o n i t o r those
25 f u n d s on t h e i r behalf.
26 154 Q. M o n i t o r i s a word you u s e ; I don't understand it.
27 Your c l i e n t s h a v e f u n d s a n d t h e y come i n t o you.

28 What do t h e y a s k y o u t o do?

29 A. T h e y w o u l d s a y 'We h a v e f u n d s o f f s h o r e ' wherever

*

1 t h e y m i g h t h a v e b e e n ' C a n you l o o k a f t e r these funds

2 for me.'

3 "Can y o u l o o k a f t e r t h e s e f u n d s . " What d i d that

4 mean?
5 Would y o u e n d e a v o u r t o get~%he b e s t i n t e r e s t rate.
6 Would you m o n i t o r t h e f u n d s . '
7 Take i t slowly. Would you e n d e a v o u r t o g e t t h e best
8 interest rate. Were t h e y a s k i n g y o u t o change
9 w h e r e t h e i r f u n d s w e r e i n t o some o t h e r financial

10 institution?

11 I d o n ' t t h i n k t h e y w o u l d come i n a n d s a y 'We h a v e

12 funds. W i l l y o u c h a n g e t h e m f o r some o t h e r

13 financial institution.' I think a discussion would

14 h a v e a r o s e w i t h t h e m t h a t t h e y w o u l d h a v e a d v i s e d me

15 t h a t t h e y h a d £X i n f u n d s a n d s a y ' C a n y o u l o o k

16 after t h e s e f u n d s on my b e h a l f . '

17 What d o e s t h a t mean?

18 I t means t h a t t h e y m i g h t n o t want t o correspond

19 d i r e c t l y with whatever - foreign bank t h e y were using.

20 They m i g h t n o t want t o g e t m a i l r e c e i v e d from

21 f o r e i g n b a n k s on t h e b a s i s of m o n t h l y statements.

22 They w o u l d n ' t f e e l t h a t n e c e s s a r i l y c o m p e t e n t about

23 l o o k i n g a t whether t h e funds should be p l a c e d

24 one month o r t h r e e months o r s i x months. And t h a t

25 t h e y w o u l d l i k e me t o l o o k a f t e r t h o s e factors.

26 What d i d you do t h e n ?

27 I w o u l d p r o b a b l y a d v i s e t h e m a t some s t a g e that
28 t h e r e would be a f a c i l i t y available through
29 G u i n n e s s & Mahon.
 1 159 Q. You t h e n c o n t a c t e d G u i n n e s s & Mahon?

2 A. Yes.

3 160 Q. You u s e d t h e word " f a c i l i t y . " What d o e s t h a t mean

4 in this connection?
v.
5 A. I t means I would p r o b a b l y have contacted
6 Des T r a y n o r . I would have s a i d ' I have a client
7 — f o r t h e m o s t p a r t h e w o u l d n ' t know who my c l i e n t s
8 were — t h a t wishes t o have funds m o n i t o r e d abroad
^ 9 b y me.*
10 161 Q. D o n ' t u s e d t h e word " m o n i t o r e d " b e c a u s e I don't
11 u n d e r s t a n d what i t means. You h a v e a client.
12 What i s h e t o d o ?
13 A. Des T r a y n o r i s t o g i v e me a n a c c o u n t n u m b e r , a
. 14 reference, a b a n k w h e r e t h e c l i e n t who w o u l d h a v e
15 t h e funds would have t o g i v e i n s t r u c t i o n s t o his
16 b a n k t o h a v e t h e f u n d s moved. Those funds —
17 I d o n ' t understand these t h i n g s e i t h e r — might be
18 moved t o a r e c e i v i n g bank.
19 162 Q. This i s very important. I f you d o n ' t u n d e r s t a n d it,
20 I u n d e r s t a n d even l e s s . Let us take a typical
21 c l i e n t w i t h funds i n J e r s e y . You t e l l Mr. Traynor
22 that this client is dissatisfied. What d o e s
23 Mr. T r a y n o r t h e n d o ?
24 A. He g i v e s me c o d e d r e f e r e n c e s . I d o n ' t remember b u t

25 i t might well be a reference t o a bank account in

26 London f o r so and so, for t h e a c c o u n t of s o and so.

27 163 Q. What was t h e b a n k ?

28 A. Mr. C o s t e l l o , I d o n ' t remember a n d I am s u r e those

29 i n s t r u c t i o n s would have v a r i e d o v e r t h e years.

!
33
What was t h e a c c o u n t , i n whose name was t h e account
t o be placed?

I have a d i f f i c u l t y answering t h a t question, not

w a n t i n g t o b e u n c o o p e r a t i v e . " A l l I am s a y i n g is
t h a t Mr. T r a y n o r w o u l d b e s e e k i n g t o g e t t h e f u n d s
under h i s c o n t r o l and t h e r e i s a t r a n s f e r process.
You m u s t h a v e known t h e f i n a n c i a l institution in
which your c l i e n t s ' s funds were g o i n g t o b e p l a c e d ?
The o n l y a n s w e r I c a n g i v e t o t h a t i s I d o n ' t recall
because over the years they probably used d i f f e r e n t
financial institutions.
T e l l me some o f t h e m t h a t w e r e u s e d that
Mr. T r a y n o r w o u l d h a v e t o l d you a b o u t . G i v e me t h e
n a m e s o f some o f t h o s e , Mr. Stakelum?
I t i s very difficult under oath, but l e t us try
G u i n n e s s & Mahon London f o r a s t a r t . I don't know.
But i f i t was G u i n n e s s & Mahon L o n d o n , i t would
p r o b a b l y b e a c c o u n t of so and s o , r e f e r e n c e so and
so e t c . e t c . . But I am n o t a b s o l u t e l y p o s i t i v e of
that. I t c o u l d a l s o v a r y d e p e n d i n g on t h e currency.
I f At was d o l l a r s i t m i g h t b e s o m e t h i n g else.
What o t h e r f i n a n c i a l i n s t i t u t i o n d i d he t e l l you
t h a t t h e money was g o i n g t o b e d e p o s i t e d in?
I d o n ' t know, I j u s t d o n ' t know. I t would b e a
once-off instruction. I d o n ' t know. It probably
w o u l d d e p e n d on w h e r e t h e f u n d s w e r e c o m i n g f r o m
too.

Do y o u r b e s t . I am s u r e you a r e u n d e r strain,

Mr. S t a k e l u m . T e l l me t h e n u m b e r s of other

34
 o

1 i n s t i t u t i o n s t h a t c l i e n t s o f y o u r s h a d money
2 d e p o s i t e d as a r e s u l t of your c o n t a c t with
3 Mr. Traynor?
4 A. I j u s t cannot answer t h a t . That i s not wanting to
5 ,-i
be uncooperative, I j u s t cannot remember.
6 169 Q. Why c a n ' t you remember?
7 A. How d o I a n s w e r a q u e s t i o n o f why I c a n n o t remember?
8 170 Q. For example, were any of t h e funds l o d g e d i n any of
9 t h e G u i n n e s s & Mahon s u b s i d i a r i e s i n Cayman o r in
10 t h e Channel Islands?
11 A. I don't think so. But I t h i n k t h e funds would b e
12 i n i t i a l l y l o d g e d somewhere maybe f o r t h e a c c o u n t of
13 G u i n n e s s Mahon Cayman, r e f e r e n c e number s o a n d so,
14 maybe f o r t h e a c c o u n t i n G u i n n e s s & Mahon L o n d o n f o r
15 G u i n n e s s & Mahon D u b l i n . I am n o t t o o sure.
16 You w o u l d g e t s p e c i f i c instructions.
17 171 Q. I t may h a v e b e e n t h e a c c o u n t o f G u i n n e s s & Mahon i n
18 D u b l i n o r G u i n n e s s & Mahon i n L o n d o n . Was t h i s the
19 offshore b a n k we a r e t a l k i n g a b o u t , G u i n n e s s & Mahon
20 Cayman T r u s t , t h e Ansbacher bank. They would h a v e
21 been lodged i n i t s account i n Dublin or lodged in
22 i t s a c c o u n t i n London?
23 A. I t may w e l l h a v e b e e n , I don't remember.
24 172 Q. B u t y o u a r e u n d e r o a t h now?
25 A. That's right.
26 173 Q. You a r e u n d e r o a t h . Can y o u s a y t h a t f u n d s your
27 c l i e n t h a d a s k e d you i n r e l a t i o n t o a s s i s t a n c e were
28 l o d g e d i n a n a c c o u n t i n t h e name o f G u i n n e s s Mahon
29 Cayman T r u s t i n D u b l i n o r i n L o n d o n ?
 r>

1 A. I c a n n o t remember. I suspect that some o f the

2 instructions g i v e n a t t h e t i m e w o u l d b e what was at
3 the best r e q u i r e m e n t s o f t h e G u i n n e s s & Mahon b a n k ,
4 what t h e i r i n t e r n a l ...(INTERJECTION).
r
5 174 Q. A few m i n u t e s a g o y o u t o s a i d t o me t h a t y o u g a v e

6 Mr. T r a y n o r i n s t r u c t i o n s and t h a t you transferred

7 funds t o him and t h e y were t r a n s f e r r e d offshore, is
8 t h a t not r i g h t . D i d n ' t y o u s a y t h a t t o me a few

9 minutes ago?
10 A. They were p r o b a b l y o f f s h o r e already. I thought we
11 were t a l k i n g about a client...(INTERJECTION).
12 175 Q. They were offshore a l r e a d y you think?
13 A. Yes, most of t h e funds were offshore already.

14 176 Q. A l l t h e f u n d s o f t h e s e c l i e n t s we a r e t a l k i n g about

15 were offshore. Did you e v e r h a v e c l i e n t s coming in

16 t o you w i t h funds t h a t w e r e n ' t offshore?
17 A. Yes.
18 177 Q. What w o u l d h a p p e n then?
19 A. At d i f f e r e n t s t a g e s ' ; ."in "the' e a r l y s t a g e s I think

20 I r i s h pounds could be converted without any problem

21 into Sterling. I t i s o n e a n d t h e same i n the
22 1970's. T h e n - t h e y c o u l d b e moved f r o m Sterling.
23 178 Q. Were t h e y p u t o f f s h o r e , the funds?
24 A. Yes.
25 179 Q. Where?
26 A. A l l I know i s t h a t w i t h Des T r a y n o r I w o u l d have
27 a s s u m e d G u i n n e s s Mahon Cayman T r u s t , later
28 Ansbacher. But i t could well have been
29 C o l l e g e T r u s t e e s o r G u i n n e s s & Mahon G u e r n s e y .
»
o c.
1 180 Q. One o r t h e other?
2 A. Y e s , I a s s u m e one o r t h e other.
3 181 Q. Did a n y o f y o u r c l i e n t s t o y o u r k n o w l e d g e establish
4 t r u s t s w i t h t h e a s s i s t a n c e o f G u i n n e s s & Mahon w i t h
5 Mr. T r a y n o r e i t h e r i n theT%ayman I s l a n d s o r i n the
6 Channel Islands?
7 A. N o t t o my k n o w l e d g e .
8 182 Q. None of t h e m t o l d you t h a t t h e y h a d d o n e this?
9 A. No.
10 183 Q. Mr. T r a y n o r d i d n ' t t e l l you t h a t h e was g o i n g to
11 s u g g e s t t h i s t o them?
12 A. No.
13 184 Q. You a r e p r e t t y c e r t a i n on t h a t o r a r e you d o u b t f u l
14 about it?
15 A. I am n o t a w a r e c e r t a i n l y of a n y c l i e n t s that
16 e s t a b l i s h e d such t r u s t s . I am n o t a w a r e o f any
17 that did.
18 185 Q. If they didn't establish t r u s t s , you a r e aware of
19 clients.who-transferred funds o f f s h o r e ?
20 A. Yes, t h a t ' s right.
21 186 Q. We w i l l b r e a k now f o r a c u p of c o f f e e ,
22 Mr. S t a k e l u m , for about t e n minutes o r so.
23
24 SHORT ADJOURNMENT
25
26
27
28

29
Appendix XV (159) ( l ) ( i )
 o

\fnii?i:: i.
OurRef: C/S1Q/NM
18* October 2000
Mr. Jack Stakelum
"Fairmont?'
Ballyronan Road
Kilpedder
Co. Wicklow
Strtetfry Private A Confidential - Addressee Only
Dear Sir
I refer to your letter of 11 October 2000, and I reply an my own behalf, and on behalf of my
colleagues,
» Mr. Justice Dedan Castdlo and Mr. Paxil Rowan.
We now wish to examine you under oath concerning the matters set out in our two letters dated
30 August 2000 and 21 September 2000. To that'end, I propose that an interview would lake
place in our offices at the above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you -would make contact with our secretary, Ms Frances Gaynor at the above
phone number to confirm either date, or to make mutually conveniai alternative arrangements if
those dates do not suit you.
We note your refusal to provide lis wilhniu^ofycOT^^ examination. I must point
out to you that you are obliged by law to provide us with the information we have required of
^ you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of the Companies Act 1990 imposes a duty upon you to
comply with our requirement, and, in the case of a refusal to do so, m&es provision for the
matter to be dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
relation to the transfer of funds to other of 1hose islands. We require this information tobe
provided in -writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidioustodisclosefee identity of your clients. Once again, I must
point out to you that you are obligedtodo so, in compliance with our requirement The interview
is not the proper forum in which to make submissions,find it is not our practice to entertain them.

Yours faithfully

Noreen Mackey B.L.

Appendix XV (159) (1) 0 )
-H+H- JACK STAKELUM
"FAIRMONT"
BALLYRONAN ROAD
m CHARTERED ACCOUNTANT .
JS TELEPHONE: 2810646 FAX: 2810645
MOBILE: 087 2854660
KILPEDDER
CO. WICKLOW
+H4+
The Injectors
3"* Floor
Trident House m. m
Blackrock
rpr PjffflJN

6 November, 2000

Dear Sirs,
With reference to your letter of tbe 18* October, and in particular the third
paragraph, I should point out that I did not refiise as such to provide the information in
question, merely that I should be afforded the opportunity to argue why I should not be
asked to ifivulge such information. The persona in question dealt with me on an
understanding of confidentiality, and as the Inspectors will surely appreciate, it is difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point outforcefully in your letter, you are not prepared to allow
me that opportunity and you have referred to tbe legal position. In the circumstances, I
attach a list of the names and addresses of the persons in question.
Yours fiuthfUlly,

U JfotH

Jtod;

V.A.T. Number 28S4485K

 etlCLc&u£# To teTred Sp 6

i
•• C f »u .

Gerry Keane, 54 Hoytedbmy Lane, Dublin 4.

Appendix XV (159) ( l ) ( k )
f*
JOHN J. STAKELUM
"Fairmont"
Ballyronan Road,
Kilpedder, Co. Wicklow.

21 Fehruaiy2001. ^

Tbe High Court Inspectors, .'•? 6 JJStt

3 r i Floor,
Trident House,
Bladcrock,
Co. Dublin.
Re: Interviews with the Inspector, on 8/1U2000 and 6/12/2000.

Dear Inspectors,

The content in sections I and 2 has been written in ordertoadd clarification to the information
given in my Statement dated 22 September 2000.

!
1. The Consultancy Business I set ap in 1975. * •
»
•

In December 1975 I decided to set up a business that would provide a general financial
Consultancy service to clients. I had Identified the market need in Haughey Bo land & Company
during my auditing work but more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided to focus on were:
• Preparation of properly assembled requestsfin: financing from backs.
• Preparation of well constructed projected cash flow and profit and loss statements.
• Accotccpanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
Jbr the timely production of them.
• Being a sounding board for all kinds of operating issues - both problems and perceived
opportunites.
• Guidance on where to go and how to request professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Actingfor clients in the purchase or sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in the name of Business
Enterprises Limitedfrom December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful. Typically, it ^occupied well over 100% of 50-
hour weeks.
2. The service I gave to persons who wished to hold Hinds offihore.

Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards this my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
• I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
• I would geither issue'nor obtain, receiptsfor movements in funds. Neither would I keep any
ledger records, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisagedfor this service but over time it became necessary to
recover costs on a case by case basis.
My operating procedurefor this service had butfour components:

• A deposit account in G&M that I have described as a hotchpotch account.

• A manual memorandum record I kept in my office under my personal control
• A float account in AIB.
• A monthly reconciliation of tbe sum of the memorandum records with the sum of the
account(s) in G&M and any float balances.
In the interest of completeness perhaps I should add also:
• G&M would be aware of the total fbnds I had in my hotchpotch account
• G&M would not be aware of the names of the depositors whose funds, in aggregate,
comprised the balance in thefcotdgwtch account albeit that a name and an amount could
surface as part of another business transaction with the bank, e.g. a back-to-back loan.
• Some of my clients would be aware generally that the funds they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were oflshorc but would have
no awareness or care about the name of the bank in which their money was deposited.
• Only I knew the names in the memorandum account and only I knew the ownership of the
balance in thefloat account kept in AIB.
5. The information requested by Ms. Mackey on the 6 December 2000.
The information requested by Ms. Mackey on 6 December'2000 is given in the three schedules
that are appendedtothis letter.
Schedule 1 relates to the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had offshore deposits in G&M through my procedure.

Yours sincerely,
 SCHEDULE 1

Name. Offshore Back to Date Deposit Date Depoatt Source of Funds Source of Funds
Back loon. Opened riooofl Offshore iriah Pounds.

GertyKetne. Yea. Yse. Late 1970a. a 1990. Partially. Partially.

Appendix XV (159) (1)(1)
Extract from a statement dated 22 September 2000 provided to the Inspectors by
Mr. Jack Stakelum

Turning now to the data requested in Appendix C enclosed with your letter of 30 August
2000. I propose treating the information requestedin the separately number paragraphs
as questions to which I now respond seriatim as follows:
(7) Channel Island Trusts and Companies.
I am aware of this service through experience of one transaction only. I have
no documentation but my recollection goes as follows. Mr. Geny Keane, a
Client probably in 1988 wished to purchase a residence in Ireland using
funds he held offshore. Having sought advicefrom Mr. Traynor I advised
Mr. Keane that the only manner in which he could maintain the confidentiality
of his funds was by using an offshore company. Guinness and Mahon
provided this service; a property was acquired and initially rented to Mr.
Keane. Subsequently, Mr. Keane purchased Ihe subject property himself.'
Wc&WT M e m * -

SrfltteuiH To rau Z/U&QecToKS

contained in (a) throuah m fafth ""
Appendix XV (160) Mr Austin C Murray
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Austin C Murray.

a) Transcript of evidence of Mr Austin C Murray dated 30 January 2001.

b) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

c) Letter of 18 October 2000from Inspectors to Mr Jack Stakelum.

d) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

e) Letter of 21 February 2001 and enclosuresfrom Mr Stakelum to

Inspectors.

2. Correspondence received from or on behalf of Mr Austin C Murray,

a) Letter of 21 November 2001 - Austin C Murray to Inspectors.

Appendix XV (160) (1) (a)
PRIVATE EXAMINATION OF MR. AUSTIN C. MURRAY

UNDER OATH

ON TUESDAY, 30TH JANUARY 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: MS. N. MACKEY BL

MR. M. CUSH SC

Solicitor to the Inspectors MS. M. CUMMINS

Interviewee: MR. AUSTIN C. MURRAY

 I N D E

WITNESS EXAMINATION

MR. A. MURRAY MS. MACKEY

 1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON TUESDAY,

2 30TH JANUARY 2001:

5 MS. MACKEY: Mr. Murray, we have

6 already introduced

7 ourselves but just formally now my name is

8 Noreen Mackey and this is Michael Cush. We are

9 two of the four Inspectors appointed to investigate

10 the affairs of Ansbacher. The other two Inspectors

11 are not dealing with your particular case.

12

13 This is not, as you know, a Court or a Tribunal.

14 It is just an interview.

15 MR. MURRAY: Yes.

16 MS. MACKEY: Although it is an

17 interview under oath.

18 MR. MURRAY: Yes.

19 MS. MACKEY: If for any reason during

20 the course of the

21 interview you feel concerned about a question that

22 you have been asked and would prefer not to answer

23 unless you get legal advice you can tell us that

24 and we will adjourn to a later date to enable you

25 to do that since you have not got a lawyer with

26 you today.

27 MR. MURRAY: Yes.

28 MS. MACKEY: Otherwise we will just

29 proceed to the end and

4
 1 I do not think there should be any difficulty.

2 MR. MURRAY: I don't have a lawyer with

3 me because I don't think I

4 need one.

5 MS. MACKEY: That is grand.

6 MR. MURRAY: But I was informed that

7 when somebody had brought

8 along a lawyer that they didn't even listen to him.

9 MS. MACKEY: I see. Any way,

10 Mr. Murray, I will now

11 ask Ms. Cummins, our solicitor here, to administer

12 the oath to you.

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

5
 1 MR. AUSTIN C. MURRAY, HAVING BEEN SWORN, WAS

2 EXAMINED AS FOLLOWS BY MS. MACKEY:

5 1 Q. MS. MACKEY: Mr. Murray, I do not

6 think this will take

7 very long because you sent us in a helpful

8 statement, Exhibit 1. Do you have a copy of

9 your own statement with you?

10 A. I do, yes.

11 2 Q. Because I will refer to that if you do not mind?

12 A. Yes.

13 3 Q. Just for the record first of all can I just have

14 a little bit of background about yourself and your

15 own professional career? I understand you are an

16 architect; is that correct?

17 A. I am, yes.

18 4 Q. And are you still practising or retired?

19 A. I am more or less retired.

20 5 Q. You are retired?

21 A. Yes.

22 6 Q. Did you work as an architect for all your

23 professional life?

24 A. Yes.

25 7 Q. Were you involved in business as well apart from

26 your architectural practice?

27 A. You mean did I have a company or anything like that?

28 8 Q. Yes?

29 A. At one stage I was a Director of an art gallery.

6
 1 9 Q. Yes?

2 A. But that was all.

3 10 Q. That was all. Did you operate that through a

4 company?

5 A. Well, I was just a Director of the company.

6 11Q. I understand you had a company called

7 Arthur C. Murray; is that correct?

8 A. No.

9 12 Q. It is not correct?

10 A. No.

11 13 Q. I say that because you provided us kindly yesterday

12 with some files that you got from Guinness & Mahon?

13 A. Yes.

14 14 Q. And from that it emerged that you had at one

15 stage a loan with Guinness & Mahon in the name

16 of Arthur C. Murray Limited, 17 Clyde Road,

17 and it appears that that is a company with its

18 registered office at 17 Clyde Road; is that correct?

19 A. Never heard of it.

20 15 Q. I see. May be we can leave that

21 aside...(INTERJECTION)?

22 A. Unless somebody is mistaken and put my name

23 down as Arthur instead of Austin but I

24 never -- I have been called lots of things.

25 16 Q. Sorry, instead of what? Did I say

26 "Arthur C. Murray"?

27 A. Yes.

28 17 Q. I beg your pardon. I should have said

29 "Austin C. Murray"?

7
 1 A. Now you are getting me confused.

2 18 Q. Yes. The name of the company that we saw is

3 Austin C. Murray Limited?

4 A. Yes.

5 19 Q. 17 Clyde Road?

6 A. Yes.

7 20 Q. That was a company?

8 A. That would be the architectural practice.

9 21 Q. That was your practice?

10 A. Yes.

11 22 Q. I see. That is fine. Sorry, it was my mistake.

12 If we could look at your statement, Exhibit 1?

13 A. If I can find it now.

14 23 Q. We will give you another copy?

15 A. Yes, if have another copy that would be useful.

16 24 Q. Yes (Same Handed), Exhibit 1?

17 A. Thank you.

18 25 Q. If we could move down the statement to the

19 fourth paragraph there and to where you talk

20 about the funds that you received in 1974;

21 do you see?

22 A. Yes.

23 26 Q. I would like to you ask about your first contact

24 with Guinness & Mahon in Dublin? How did that

25 come about?

26 A. I think it was through Haughey Boland.

27 27 Q. Yes. Someone in Haughey Boland introduced you

28 to Guinness & Mahon; is that it?

29 A. Well, Haughey Boland were my accountants.

8
 1 28 Q. Yes?

2 A. And I would imagine it was through them.

3 29 Q. Can you remember?

4 A. It's 30 years ago. I can't remember.

5 30 Q. You cannot remember?

6 A. No.

7 31 Q. Was your first contact with them in 1974 when

8 you deposited these funds with them?

9 A. When -- really what I am saying here is that I

10 put money into...(INTERJECTION).

11 32 Q. No, I understand what you are saying there

12 (indicating). However, what I want to know is:

13 Had you had contact with Guinness & Mahon prior

14 to that? Were you banking with them?

15 A. It is difficult to remember but in fact it has

16 just suddenly struck me that Guinness & Mahon

17 were a client of mine at one stage and that is

18 probably how I came to them.

19 33 Q. Prior to 1974?

20 A. Yes.

21 34 Q. I see. Anyway moving on to the deposit that you

22 made, as you say here, with Guinness & Mahon in

23 1974. Who did you approach in Guinness & Mahon

24 to make this deposit?

25 A. I couldn't tell you.

26 35 Q. Was it Mr. Traynor?

27 A. No.

28 36 Q. Did you know Mr. Traynor?

29 A. I knew Mr. Traynor, yes.

9
 1 37 Q. You did not approach Mr. Traynor to make this

2 deposit?

3 A. No, I think in fact what happened is that I --

4 well, I had money.

5 38 Q. Yes?

6 A. I had fees coming in.

7 39 Q. Yes?

8 A. And they were clients of mine and I put the

9 money into -- on an ordinary account basis.

10 40 Q. Yes?

11 A. Into Guinness & Mahon.

12 41 Q. Into Guinness & Mahon?

13 A. Yes.

14 42 Q. You say here that you did not declare the income

15 to the Revenue authorities?

16 A. This other thing because...(INTERJECTION).

17 43 Q. Is that a different account?

18 A. Some of that money eventually may have gone

19 into an off sea account.

20 44 Q. This is what I am trying to get at?

21 A. Yes, I know.

22 45 Q. How would that have happened?

23 A. Really I can't remember how.

24 4 6 Q. You cannot remember at all?

25 A. No.

26 47 Q. May be we could assist you a little bit?

27 A. Yes.

28 48 Q. You are acquainted with Mr. Stakelum I believe?

29 A. I am, yes.

10
 1 4 9 Q. Right. Did Mr. Stakelum have any management of

2 your overseas funds or assist you in any way in

3 the management of them?

4 A. Mr. Stakelum was involved but I am trying to

5 remember to what extent. He was in the same

6 office. He rented his office from me in

7 Clyde Road.

8 50 Q. He rented. You were his Landlord?

9 A. Yes.

10 51 Q. I see. Yes?

11 A. And I met him through Haughey Boland; as being

12 my accountants.

13 52 Q. This would have been after he had left

14 Haughey Boland himself; was it?

15 A. No, when he was still there.

16 53 Q. He was still there?

17 A. Yes.

18 54 Q. So, was he acting as your accountant in fact?

19 A. Well, Haughey Bolands were acting as my accountants.

20 55 Q. However... (INTERJECTION)?

21 A. Not Jack Stakelum personally.

22 56 Q. Not him personally?

23 A. No.

24 57 Q. Who in Haughey Boland was acting for you?

25 Mr. Traynor?

26 A. No, no. No, no. You are putting words in my mouth.

27 58 Q. I am only trying to...(INTERJECTION)?

28 A. Assist me.

29 59 Q. Help your memory?

11
 1 A. I can't remember the names of the people who

2 were dealing with my accounts.

3 60 Q. In any event it was not either Mr. Traynor

4 or Mr. Stakelum?

5 A. No, it wasn't.

6 61 Q. However, you knew both of them through that?

7 A. Again, Haughey Bolands were clients of mine.

8 62 Q. Yes?

9 A. At one stage.

10 63 Q. Yes?

11 A. I designed their offices in Amiens Street.

12 64 Q. However, they were also your accountants; you

13 have explained?

14 A. Yes.

15 65 Q. That is really the relationship?

16 A. But I would have known Des and Jack as clients.

17 66 Q. As your clients?

18 A. Yes, but it is through the client relationship

19 that I really knew them.

20 67 Q. I understand. In any event what I am interested

21 in at the moment is your relationship with

22 Jack Stakelum insofar as it impinges on

23 the overseas accounts?

24 A. I hope there is no suggestion of...(INTERJECTION).

25 68 Q. Pardon? I beg your pardon?

26 A. Sorry, I am being facetious.

27 69 Q. Yes. May be we could just move on, you know?

28 It would help us all if we can get to the end

29 of this quickly?

12
 1 A. Yes, yes.

2 70 Q. Did you approach Mr. Stakelum and ask him if

3 he could assist you in the management of the

4 overseas accounts or in placing them overseas?

5 A. I don't know how to put it but I can't answer

6 that question because I don't remember but it

7 was with Mr. Stakelum eventually that the

8 monies that I had put into the Ireland -- not

9 the Ireland one -- into the North of Ireland.

10 71 Q. The North of Ireland?

11 A. Yes, yes. I had some money which I put into

12 Kircubbin; The Ulster Bank.

13 72 Q. Into where?

14 A. Kircubbin; K-i-r-c-u-b-b-i-n.

15 73 Q. Right. What was that?

16 A. It is in -- no, sorry.

17 74 Q. What was Kircubbin?

18 A. Kircubbin was a bank; The Ulster Bank.

19 75 Q. I see?

20 A. It's a place north of -- on Strangford Lough.

21 76 Q. Yes. Was this through Mr. Stakelum?

22 A. No.

23 77 Q. Is that what you are telling me?

24 A. No.

25 78 Q. Can you tell me what way Mr. Stakelum assisted you?

26 A. Well, it -- I think I realised that that money,

27 instead of being in Kircubbin, could be put

28 somewhere else.

29 79 Q. Yes?

13
 1 A. And I can't really remember how it came about.

2 80 Q. Yes?

3 A. That he -- no, I remember now.

4 81 Q. It does not matter who approached who first?

5 A. No.

6 82 Q. However, what did he say to you?

7 A. I haven't a clue. The money in fact went from

8 Kircubbin to Guernsey.

9 83 Q. Yes?

10 A. And that was done through Guinness & Mahon.

11 84 Q. Right. Can you tell me how this was done

12 through Guinness & Mahon? Who moved the

13 money from Kircubbin to Guernsey?

14 A. I don't know. I haven't a clue.

15 85 Q. This was your money, Mr. Murray?

16 A. This was my money, yes.

17 86 Q. Did you give instructions to the bank in Kircubbin?

18 A. I presume I did.

19 87 Q. And what instructions did you give them?

20 A. I just -- we are talking about 1974; around those

21 dates.

22 88 Q. Are we still talking about 1974?

23 A. I couldn't tell you. It's, you know --.

24 89 Q. Let us see if we can tease it out? Did

25 Mr. Stakelum give you the number of an account

26 that you could...(INTERJECTION)?

27 A. No.

28 90 Q. He did not?

29 A. No.

14
 1 91 Q. You remember that?

2 A. Yes.

3 92 Q. What did he do?

4 A. I don't know what to say because I am totally at

5 sea on the dates and the amounts and the method.

6 93 Q. Mr. Murray....(INTERJECTION)?

7 A. All I can tell you is that the money went to --

8 I put -- I had money in Guinness & Mahon and they

9 put it on deposit in Jersey in my name.

10 94 Q. In your name?

11 A. In my name.

12 95 Q. And was that with College Trustees in Jersey or

13 Guernsey?

14 A. I think it was. The name is familiar.

15 96 Q. Yes. Did you get statements from them after that?

16 A. No, no.

17 97 Q. What did you do when you wanted to know the state

18 of affairs of your fund?

19 A. I would ask Guinness & Mahon and they would tell me.

20 98 Q. Who would you ask in Guinness & Mahon? Is it

21 not the case, Mr. Murray, that you dealt with

22 Mr. Stakelum in relation to these funds?

23 A. Not at that stage; later.

24 99 Q. Not at that stage?

25 A. Not at that stage.

26 100 Q. Was it later? At what stage then did you begin to

27 deal with Mr. Stakelum in relation to the funds?

28 A. I couldn't tell you.

29 101 Q. All right. It does not matter what date. Can you

15
 1 tell me why you began to deal with Mr. Stakelum or

2 how that came about? You were dealing up to this

3 point, you say, with somebody in Guinness & Mahon

4 in Dublin?

5 A. Yes.

6 102 Q. And then there came a point where Mr. Stalelum

7 took over?

8 A. Yes.

9 103 Q. What did he do for you after that or how did that

10 come about?

11 A. Well, he wanted the money to be put into collective

12 funds that he had.

13 104 Q. I see?

14 A. And I didn't want to do that.

15 105 Q. Yes?

16 A. Because I wanted total accessibility.

17 106 Q. Yes?

18 A. On my own.

19 107 Q. Yes?

20 A. And at some stage he convinced me that the money

21 in one account would be -- would save sort of

22 bank fees and other corporate charges.

23 108 Q. He convinced you that if you transferred your

24 money to sort of a pooled account that he had?

25 A. Yes.

26 109 Q. That that would save you bank charges?

27 A. Yes. By the way there is something which, again

28 referring to your stuff?

29 110 Q. Yes?

16
 1 A. To my knowledge at no time did I have monies in

2 the Cayman Islands.

3 111 Q. Yes. I think that is quite possible, Mr. Murray,

4 because to just explain to you what happened?

5 A. Yes .

6 112 Q. Many of the people that we have met did not

7 know this either?

8 A. Yes .

9 113 Q. People who had money with Guinness & Mahon's

10 subsidiary in the Channel Islands, and which money

11 was managed by College Trustees, in fact ended up

12 with their money in an account in the name of

13 Ansbacher in Guinness & Mahon, which is how they

14 become Ansbacher clients, and that was done because

15 between 1981 and 1989 College Trustees put its

16 money, the money belonging to its clients, on

17 deposit with Ansbacher?

18 A. Yes .

19 114 Q. And Ansbacher had an account in Guinness & Mahon

20 here?

21 A. Yes .

22 115 Q. It had that money in an account marked Guinness

23 Mahon Cayman Trust, which was the then name of

24 Ansbacher?

25 A. Yes .

26 116 Q. Reference College Trustees?

27 A. Yes .

28 117 Q. And it appears that that is what happened to

29 your money; that it was routed via Cayman so

17
 1 that totally unwittingly your money ended up

2 in Ansbacher although you thought it was in

3 the Channel Islands most probably. That is

4 the connection...(INTERJECTION)?

5 A. Yes .

6 118 Q. Between the Channel Islands and Ansbacher?

7 A. Well, it's strange because at one stage I met

8 a Mr. Lipscombe.

9 119 Q. Yes. From the Channel Islands; from College?

10 A. From the Channel Islands.

11 120 Q. Yes?

12 A. And that was when I had the control of it.

13 So, I was quite happy that it was there.

14 121 Q. Yes, yes?

15 A. That's -- the other is -- it is what I

16 suspected; that the money had been shifted.

17 122 Q. Yes. However, that would have happened even if

18 it was still in your own name in College. This

19 happened to all the College Trustee monies at

20 that particular period?

21 A. It did?

22 123 Q. Yes. So, it would have made no difference. Anyway

23 just to clarify: What we are trying to get clear

24 really is the picture of the relationship between

25 yourself and Mr. Stakelum; between yourself and

26 Guinness & Mahon; and how the money came to move

27 from one place to another; and how it was managed.

28 You have just explained to us, and this is helpful,

29 that you had the money in your own name in

18
 1 College Trustees most probably?

2 A. Yes .

3 124 Q. Certainly in the Channel Islands up to a

4 particular date, which you cannot remember;

5 is that right?

6 A. Yes. On dates, no.

7 125 Q. Yes. You cannot even give me a general idea?

8 Was it the 1970's or the 1980's?

9 A. I haven't a clue what it was.

10 126 Q. All right. At a particular point Mr. Stakelum

11 persuaded you that it would be advantageous to

12 you to have it in this pooled account and you

13 agreed?

14 A. Yes .

15 127 Q. How was that done? Where did he tell you this

16 pooled account was? Did he give you any details?

17 A. Well, I thought it was still in Jersey.

18 128 Q. Did he say it was?

19 A. Or Guernsey.

20 129 Q. Did he say it was?

21 A. No, I assumed it.

22 130 Q. I see. You agreed that your money would be

23 transferred to that. How was that then done?

24 A. I would -- sorry, I am not too sure that I am

25 taking you up right. Did you say: How did I

26 arrange the transfer of it?

27 131 Q. Yes?

28 A. I didn't arrange any transference. It

29 was...(INTERJECTION).
 1 132 Q. You had an account in your own name?

2 A. Yes, yes.

3 133 Q. That had to be closed or at least partially emptied?

4 A. I haven't a clue how it was done.

5 134 Q. However, who did it? I mean you gave instructions

6 somewhere; did you? It did not happen by some kind

7 of, you know, magic?

8 A. Yes, but I couldn't tell you today how say

9 the transfer of the money from Kircubbin to

10 Guinness & Mahon...(INTERJECTION).

11 135 Q. However, what I am trying to get

12 at...(INTERJECTION)?

13 A. May be I gave a letter or something saying that

14 you can transfer the monies from -- but I don't

15 remember. I haven't a clue as to how it was done.

16 136 Q. You probably would have written to College Trustee

17 or to whoever was dealing with your money and said

18 that you wished this to happen. However, you would

19 have had to tell them where you wanted it to go; is

20 that not right?

21 A. In hindsight it is -- yes, I would agree with you

22 but in memory I cannot say how and I presume I gave

23 some sort of authorisation.

24 137 Q. Yes?

25 A. To the bank.

26 138 Q. Yes?

27 A. To transfer.

28 139 Q. Yes?

29 A. I presume so.

20
 1 140 Q. Yes. However, you cannot remember; that is what

2 you say?

3 A. I can't remember, no. If I asked you what you

4 were doing in 1974 could you answer me?

5 141 Q. I could actually, yes?

6 A. You could?

7 142 Q. Any way, Mr. Murray, moving on from that: Would

8 it be a correct summary of your evidence so far

9 to say that in 1974 you deposited some funds with

10 Guinness & Mahon in Dublin?

11 A. Yes.

12 143 Q. Those funds were then transferred to the North of

13 Ireland; is that right?

14 A. No.

15 144 Q. No?

16 A. It was the Ulster Bank that the funds were put up

17 in Kircubbin first.

18 145 Q. Yes?

19 A. And then through Guinness & Mahon. It was

20 brought to Dublin I presume because I had an

21 account, a sizable account, in Guinness & Mahon.

22 146 Q. So, the funds were transferred from the North of

23 Ireland to Dublin?

24 A. I don't know how it in fact happened.

25 147 Q. Well...(INTERJECTION)?

26 A. Whether it came to Dublin and went on

27 or...(INTERJECTION).

28 148 Q. I am looking here at your statement, Exhibit 1?

29 A. Yes.

21
 1 149 Q. And what you say is that in 1974 you deposited

2 money with Guinness & Mahon in College Green,

3 Dublin. Did you or are these the funds that

4 came from the North and maybe went via

5 Guinness & Mahon to the Channel Islands or is

6 this something different? What is it that you

7 are talking about here in your statement, Exhibit

8 A. That presumably is the money from Kircubbin.

9 150 Q. Mr. Murray, you say "presumably" but you wrote

10 this statement?

11 A. I did, yes.

12 151 Q. Just a few weeks ago?

13 A. Yes .

14 152 Q. So, what were you talking about at the time that

15 you wrote it? You say that you received funds

16 in 1974. Received them from where?

17 A. I presume I was thinking of the Kircubbin monies.

18 153 Q. So, what you were saying here is that monies came

19 down from the North of Ireland?

20 A. Yes .

21 154 Q. You say you deposited them in Dublin; is that

22 correct? Is that what you in fact did?

23 A. When I wrote that it didn't seem so problematic

24 as you seem to be making it. I cannot remember.

25 They -- what I am saying there effectively I

26 think is that the money was transferred

27 through Guinness & Mahon.

28 155 Q. Yes?

29 A. To somewhere.
 1 156 Q. Through to somewhere?

2 A. To Guernsey.

3 157 Q. I see. That is not actually what you say

4 here but that is what you mean?

5 A. That is.

6 158 Q. That the money was transferred through

7 Guinness & Mahon to Guernsey?

8 A. Yes.

9 159 Q. And that money in Guernsey, which was in your

10 own name for sometime; we do not know how long?

11 A. Yes.

12 160 Q. Was ultimately transferred into a general account,

13 combined account, whatever we would like to call

14 it, in -- held by Mr. Stakelum; is that correct?

15 A. Yes, yes.

16 161 Q. During the time that your money was being managed

17 by Mr. Stakelum you believed it was still in the

18 Channel Islands; is that correct?

19 A. Yes.

20 162 Q. Did you believe it was still in exactly the same

21 Institution that your funds had been in previously?

22 A. I never thought about it like that

23 but...(INTERJECTION).

24 163 Q. Pardon?

25 A. I never thought about it.

26 164 Q. However, you did not think...(INTERJECTION)?

27 A. I would have I think if I had.

28 165 Q. Yes?

29 A. I would have thought it was in the same.

23
 1 166 Q. Yes. You did not think Mr. Stakelum was minding

2 it for you somewhere?

3 A. No.

4 167 Q. No. That is grand. As you know we are

5 investigating the company Ansbacher and we are

6 not interested actually in the individual people's

7 personal tax affairs except insofar as that relates

8 to possible wrongdoing on the part of Ansbacher

9 the bank. One of the things we are asked to look

10 at is whether Ansbacher conducted its affairs in a

11 way that enabled the creditors of other people to

12 be defrauded and in order to find out whether that

13 is the case we must ask individual clients whether

14 in fact they used the facilities of Ansbacher.

15 Now, I appreciate you did not know you were using

16 Ansbacher's facilities at all?

17 A. Yes.

18 168 Q. However, insofar as you were using the Channel

19 Islands ones for that similar purpose that is

20 relevant to us. You have already said here you

21 did not declare the income that was placed on

22 deposit to the Revenue Commissioners?

23 A. Yes.

24 169 Q. I now must ask you: Did you declare the

25 interest that was earned on the deposit to

26 the Revenue?

27 A. No.

28 170 Q. You did not. That is fine. Mr. Murray, I do

29 not think I have any other questions to ask you.

24
 1 A. Yes.

2 171 Q. However, Mr. Cush might like to ask you one or two?

3 A. Just this thing of Ansbacher?

4 172 Q. Yes?

5 A. I didn't even know about Ansbacher.

6 173 Q. I know. I appreciate that?

7 A. I never heard of them.

8 174 Q. Yes, yes. Thank you very much, Mr. Murray?

9 A. Thank you.

10 MR. CUSH: I have no questions,

11 Mr. Murray.

12 A. Thank you.

13 175 Q. MS. MACKEY: Okay. Thank you very

14 much for coming in?

15 A. All right.

16 176 Q. We do not need to talk to Mrs. Murray at all.

17 I think that is perfectly clear. You have

18 explained to us that she was not involved. She

19 may have signed things at your request but it was

20 not in her own right?

21 A. Yes. In fact she would be very -- she is

22 very or she was very annoyed at my lack of

23 intercommunication during my practice years.

24 177 Q. All right. Thank you very much, Mr. Murray?

25 A. All right. Thank you.

26

27 THE EXAMINATION THEN CONCLUDED.

28

29

25
THE EXAMINATION THEN CONCLUDED.

l o b | c>{
Appendix XV (160) (1) (b)
23 147 Q. When d i d t h a t start7

24 A. I am i n c l i n e d t o b e l i e v e 1976 b u t i t m i g h t h a v e been

25 1977. I w o u l d h a v e s t a r t e d on my own i n l a t e 1975.

26 I o n l y had one y e a r of o p e r a t i o n s i n 1975.

27 148 Q. Would y o u t e l l u s w h a t t h e a r r a n g e m e n t in a general

28 way was w i t h Mr. T r a y n o r . How was t h i s service

29 operated?
1 A. If I can t a k e a t y p i c a l example, a c l i e n t may h a v e

2 a s k e d me t o l o o k a f t e r funds t h a t i n a l m o s t all

3 c a s e s t h a t I am a w a r e o f w e r e a l r e a d y abroad.

4 I w o u l d h a v e a s k e d Mr. T r a y n o r t o a d v i s e me w h e r e

5 t h e funds might be t r a n s f e r r e d to, and then the

6 c l i e n t w o u l d i s s u e i n s t r u c t i o n s when I g o t the

7 t r a c k i n g r o u t e o r a c c o u n t name o r c o d e o r w h a t e v e r

8 they might be.

9 149 Q. C o u l d you n o t b e a l i t t l e b i t m o r e s p e c i f i c because

10 y o u know t h e s e t e r m s , I d o n ' t know. Would y o u m i n d
11 e x p l a i n i n g them t o us?
12 P.. I f t h e c l i e n t w i s h e d t o p l a c e t h e f u n d s w i t h me a n d
13 t h ^ y w e r e i n some R o y a l Bank o f S c o t l a n d i n Jersey
14 or wherever.
15 150 Q. T h i s i s c l i e n t ' s of yours?
16 A. Yes.
17 151 Q. Why w o u l d t h e y w a n t t o p l a c e t h e i r f u n d s w i t h you?
18 A. They m i g h t b e unhappy a b o u t m o n i t o r i n g t h e f u n d s in
19 t h e s e n s e of what i n t e r e s t rate...(INTERJECTION).
20 152 Q. But you w e r e n o t a b a n k ?
21 A. No.
22 153 Q. They w e r e a s k i n g y o u r a d v i c e a s t o w h e r e t o p u t the
23 funds?
24 A. They w e r e a s k i n g me w h e t h e r I c o u l d m o n i t o r those
25 f u n d s on t h e i r behalf.
26 154 Q. M o n i t o r i s a word y o u u s e ; I d o n ' t u n d e r s t a n d it.
27 Your c l i e n t s h a v e f u n d s a n d t h e y come i n t o you.
28 What do t h e y a s k you t o do?
29 A. They w o u l d s a y 'We h a v e f u n d s o f f s h o r e ' wherever

31
1 t h e y m i g h t have been 'Can you l o o k a f t e r t h e s e funds

2 for me.1

3 155 Q. "Can you l o o k a f t e r t h e s e f u n d s . " What d i d that

4 mean?

5 A. Would y o u e n d e a v o u r t o g e t t h e b e s t i n t e r e s t rate.

6 Would y o u m o n i t o r t h e f u n d s .

7 156 Q. Take i t s l o w l y . Would you e n d e a v o u r t o g e t t h e best

8 interest rate. Were t h e y a s k i n g y o u t o change

9 w h e r e t h e i r f u n d s w e r e i n t o same o t h e r financial

10 institution?

11 A. I d o n ' t t h i n k t h e y w o u l d come i n a n d s a y 'We h a v e

12 funds. W i l l you c h a n g e t h e m f o r some o t h e r

13 fiujincial i n s t i t u t i o n . ' I think, a d i s c u s s i o n would

14 h a v e a r o s e w i t h them t h a t t h e y w o u l d h a v e a d v i s e d me

15 t h a t t h e y h a d £X i n f u n d s a n d s a y ' C a n y o u look
16 after t h e s e f u n d s on my b e h a l f . '
17 157 Q. What d o e s t h a t mean? '
18 A. I t . means t h a t t h e y m i g h t n o t want t o correspond
19 d i r e c t l y with whatever foreign bank t h e y were using.
20 They m i g h t n o t want t o g e t m a i l r e c e i v e d from

21 f o r e i g n b a n k s on t h e b a s i s o f m o n t h l y statements.
22 They w o u l d n ' t f e e l t h a t n e c e s s a r i l y c o m p e t e n t about
23 l o o k i n g a t whether t h e funds should be p l a c e d
24 one month o r t h r e e months o r s i x months. And t h a t
25 t h e y w o u l d l i k e me t o l o o k a f t e r t h o s e factors.
26 158 Q. What d i d you do t h e n ?
27 A. I w o u l d p r o b a b l y a d v i s e t h e m a t some s t a g e that
28 t h e r e would be a f a c i l i t y available through
29 G u i n n e s s & Mahon.
1 You t h e n c o n t a c t e d G u i n n e s s & Mahon?

2 Yes.

3 You u s e d t h e word " f a c i l i t y . " What d o e s t h a t mean

4 in this connection?

5 I t means I would p r o b a b l y h a v e contacted

6 Des T r a y n o r . I would have s a i d ' I have a client

7 — for t h e m o s t p a r t h e w o u l d n ' t know who my c l i e n t s

8 were — t h a t wishes t o have funds monitored abroad

9 by roe.'

10 D o n ' t u s e d t h e word " m o n i t o r e d " b e c a u s e I don't

11 u n d e r s t a n d what i t means. You h a v e a client.

12 What i s h e t o d o ?

13 Des T r a y n o r i s t o g i v e me a n a c c o u n t n u m b e r , a

14 reference, a b a n k w h e r e t h e c l i e n t who w o u l d h a v e

15 t h e funds would have t o g i v e i n s t r u c t i o n s t o his

16 b a n k t o h a v e t h e f u n d s moved. Those funds —

17 I d o n ' t understand these things e i t h e r — might be

18 moved t o a r e c e i v i n g bank.

19 This i s very important. I f you d o n ' t u n d e r s t a n d it,

20 I u n d e r s t a n d even l e s s . Let us t a k e a typical

21 c l i e n t w i t h funds i n J e r s e y . You t e l l Mr. Traynor

22 that this client is dissatisfied. What d o e s

23 Mr. T r a y n o r t h e n d o ?

24 He g i v e s me c o d e d r e f e r e n c e s . I d o n ' t remember but

25 i t might well be a reference t o a bank account in

26 London f o r so and s o , for t h e a c c o u n t of s o and so.

27 What w a s t h e bank?

28 Mr. C o s t e l l o , I d o n ' t remember a n d I am s u r e those

29 instructions would have v a r i e d o v e r t h e years.

33
What was t h e a c c o u n t , i n whose name was t h e account
t o be placed?

I have a d i f f i c u l t y answering t h a t question, not

wanting t o be uncooperative. A l l I am s a y i n g is
t h a t Mr. T r a y n o r w o u l d b e s e e k i n g t o g e t t h e f u n d s
u n d e r h i s c o n t r o l and t h e r e i s a t r a n s f e r process.
You m u s t h a v e known t h e f i n a n c i a l institution in
which your c l i e n t s ' s funds were going t o b e p l a c e d ?
The o n l y a n s w e r I c a n g i v e t o t h a t i s I d o n ' t recall
because over the years they probably used different
financial institutions.
T e l l me some o f t h e m t h a t w e r e u s e d that
Mr. T r a y n o r w o u l d h a v e t o l d you a b o u t . G i v e me t h e
n a m e s of some of t h o s e , Mr. Stakelum?
I t i s very difficult under oath, but l e t us try
G u i n n e s s & Mahon London f o r a s t a r t . I don't know.
B u t i f i t was G u i n n e s s & Mahon L o n d o n , i t would
p r o b a b l y b e a c c o u n t o f s o and s o , r e f e r e n c e so and
so e t c . e t c . . But I am n o t a b s o l u t e l y p o s i t i v e of
that. I t c o u l d a l s o v a r y d e p e n d i n g on t h e currency.
I f i t was d o l l a r s i t m i g h t b e soitaething else.
What o t h e r f i n a n c i a l i n s t i t u t i o n d i d he t e l l you
t h a t t h e money was g o i n g t o b e d e p o s i t e d in?
I - d o n ' t know, I j u s t d o n ' t know. I t would b e a
once-off instruction. I d o n ' t know. It probably
w o u l d d e p e n d on w h e r e t h e f u n d s w e r e c o m i n g from
too.

Do y o u r b e s t . I am s u r e you a r e u n d e r strain,
Mr. S t a k e l u m . T e l l me t h e numbers of other
r

1 i n s t i t u t i o n s t h a t c l i e n t s o f y o u r s h a d money

2 d e p o s i t e d a s a r e s u l t of y o u r c o n t a c t with

3 Mr. Traynor?

4 A. I j u s t cannot answer t h a t . That i s not wanting to

5 be uncooperative, I j u s t cannot remember.

6 169 Q. Why c a n ' t you remember?

7 A. How d o I a n s w e r a q u e s t i o n o f why I c a n n o t remember?

8 170 Q. For example, were any of t h e funds lodged i n any of

9 t h e G u i n n e s s & Mahon s u b s i d i a r i e s i n Cayman o r in

10 t h e Channel Islands?

11 A. I don't think so. But I t h i n k t h e funds would b e

12 i n i t i a l l y l o d g e d s o m e w h e r e maybe f o r t h e a c c o u n t of

13 G u i n n e s s Mahon Cayman, r e f e r e n c e number s o a n d so,

14 maybe f o r t h e a c c o u n t i n G u i n n e s s & Mahon L o n d o n f o r

15 G u i n n e s s & Mahon D u b l i n . I am n o t t o o sure.

16 You w o u l d g e t s p e c i f i c instructions.
17 171 Q. I t may h a v e b e e n t h e a c c o u n t o f G u i n n e s s & Mahon in

18 D u b l i n o r G u i n n e s s & Mahon i n L o n d o n . Was t h i s the

19 offshore b a n k we a r e t a l k i n g a b o u t , G u i n n e s s & Mahon

20 Cayman T r u s t , t h e Ansbacher bank. They would h a v e

21 been lodged i n i t s account i n Dublin or lodged in

22 i t s a c c o u n t i n London?

23 A. I t may w e l l h a v e b e e n , I don't remember.

24 172 Q. B u t y o u a r e u n d e r o a t h now?

25 A. That's right.
26 173 Q. You a r e u n d e r o a t h . Can y o u s a y t h a t f u n d s your
27 c l i e n t h a d a s k e d you i n r e l a t i o n t o a s s i s t a n c e were

28 l o d g e d i n a n a c c o u n t i n t h e name o f G u i n n e s s Mahon

29 Cayman T r u s t i n D u b l i n o r i n London?
 1 A. I c a n n o t remember. I s u s p e c t t h a t some o f the

2 i n s t r u c t i o n s g i v e n a t t h e t i m e w o u l d b e w h a t was at

3 t h e b e s t r e q u i r e m e n t s o f t h e G u i n n e s s & Mahon b a n k ,

4 what t h e i r i n t e r n a l ...(INTERJECTION).

5 174 Q, A few m i n u t e s a g o you t o s a i d t o me t h a t y o u g a v e

6 Mr. T r a y n o r i n s t r u c t i o n s a n d t h a t you t r a n s f e r r e d
7 f u n d s t o h i m and t h e y w e r e t r a n s f e r r e d offshore, is
8 t h a t not r i g h t . D i d n ' t y o u s a y t h a t t o me a few

9 minutes ago?

10 A. They were p r o b a b l y o f f s h o r e already. I t h o u g h t we

11 were t a l k i n g about a client...(INTERJECTION).

12 175 Q. They were o f f s h o r e a l r e a d y you t h i n k ?

13 A. Yt»s, m o s t o f t h e f u n d s w e r e o f f s h o r e already.

14 176 Q. A l l t h e f u n d s of t h e s e c l i e n t s we a r e t a l k i n g about

15 were offshore. Did you e v e r h a v e c l i e n t s c o m i n g in

16 t o you w i t h funds t h a t w e r e n ' t offshore?

17 A. Yes.
18 177 Q. What w o u l d h a p p e n t h e n ?

19 A. At d i f f e r e n t stages, in the early stages I think

20 I r i s h pounds could be c o n v e r t e d w i t h o u t any problem

21 into Sterling. I t i s o n e a n d t h e same i n the
22 1970's. T h e n - t h e y c o u l d b e moved from Sterling.
23 178 Q. Were t h e y p u t o f f s h o r e , t h e funds?
24 A. Yes.

25 179 Q. Where?

26 A. A l l I know i s t h a t w i t h Des T r a y n o r I w o u l d h a v e
27 a s s u m e d G u i n n e s s Mahon Cayman T r u s t , later

28 Ansbacher. But i t c o u l d w e l l h a v e b e e n

29 C o l l e g e T r u s t e e s o r G u i n n e s s & Mahon G u e r n s e y .
1 180 Q. One o r t h e other?

2 A. Yes, I assume one o r t h e other.

3 181 Q. Did any of your c l i e n t s t o your knowledge establish

4 t r u s t s w i t h t h e a s s i s t a n c e o f G u i n n e s s & Mahon w i t h

5 Mr. T r a y n o r e i t h e r i n t h e Cayman I s l a n d s o r i n the

6 Channel Islands?

7 A. N o t t o my k n o w l e d g e .

8 182 Q. None o f t h e m t o l d you t h a t t h e y h a d d o n e this?

9 A. No.

10 183 Q. Mr. T r a y n o r d i d n ' t t e l l you t h a t h e w a s g o i n g to

11 s u g g e s t t h i s t o them?
12 A. No.
13 184 Q. You a r e p r e t t y c e r t a i n on t h a t o r a r e y o u d o u b t f u l
14 about it?
15 A. I am n o t a w a r e c e r t a i n l y o f a n y c l i e n t s that
16 e s t a b l i s h e d such t r u s t s . I am n o t a w a r e o f any
17 that did.
18 185 Q. If they d i d n ' t establish t r u s t s , you a r e aware of
19 c l i e n t s who t r a n s f e r r e d funds o f f s h o r e ?
20 A. Yes, t h a t ' s right.
21 186 Q. We w i l l b r e a k now f o r a c u p o f c o f f e e ,
22 Mr. S t a k e l u m , for about ten minutes o r so.

23

24 SHORT ADJOURNMENT
25

26
27

28

29
Appendix XV (160) (1) (c)
OurRef: C/S10/NM " - " ^ '
18* October 2000
Mr. Jack Stakelum
"Fairmont?'
Ballyronan Road
Kipeddnr
Co. Wicklow
Strictly Private & Confidential -Addressee Only
Dear Sir
1 refer to your lewer of 11 October 2000, and I r e p 1 ; ' o w n behalf, and on behalf of my
colleagues, Mr. Justice Dedan CosteUo and Mr. Paul Rowan.
*

We now wish to examine you under oath concerning the matters set out in our two Idlers dated
30 August 2000 and 21 September 2000. To that'end, I propose that an interview would take
place in our offices at the above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor at the above
phone number to confirm either dale, or to make mutually conveniert alternative arrangements if
those dates do not suit you.
We note your refusal to provide us with names of yourclients prior to examination. I must point
out to you that you are obliged by law to provide us withfee information we have required of
you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of the Companies Act 1990 imposes a duty upon you to
comply with our requirement, and, in the case of a refusal to do so, mkes provision for the
matter to be dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or m
relation to the transfer of funds to either of those islands. We require this information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidious to disclosefee identity of your cheats. Once again, I must
point out to you that you are obliged to do so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain them.
Yours faithfully

y'tv^'v- -
Noreen Mackey B.L.
Appendix XV (160) (1) (d)
r^—-

rfflffi
FAIRMONT>n
JACK STAKELUM BALLYRONAN ROAD
CHARTERED ACCOUNTANT .
TELEPHONE: 2810646 PAX: 2810645 K1LPEDDER
MOBILE: 0872854660 CO. WICKLOW

The Inspectors
Floor
Trident House «sr AC»
Blackrock

n
6 November, 2000

Dear Sos,
With rensrenco to your letter of the IS* October, and in particular the third
paragraph, l should point out that I did not retuse a* such to provide the information is
question, merely that I should be afforded the opportunity to argue why I should not be
asked to divulge such information. The persons in question dealt with me on an
understanding of confidentiality, and as the Inspectors will surely appreciate, it is difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point out forcefully in your letter, you are not prepared to allow
me that opportunity and you have referred to the legal posltioa to the circumstances, I
attach a list of the names and addresses of the persons in question.
Yours fluth&Ily,

End;

VA.T. Number 28S448SK

 i
eg .

r -

A. C. Murray, El Verano, Upper Mountowii, Dun Laoghaire, Co. Dublin.

rs
Appendix XV (160) (1) (e)
 JOHN J. STAKELUM
"Fairmont'1
Baltyronan Road,
Kilpedder, Co. Wicklow.

21 February 2001.

The High Court Inspectors, 8 JBM

3 rd Floor,
Trident House,
Blackcock,
Co. Dublin.
Re: Interviews with the Inspectors on 8/U/2000 and 6/12/2000.

Dear Inspectors,

The content in sections 1 and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000. -
1. Tbe Consultancy Business I set up In 1975.
»
•

In December 1975 I decided to sol up a business that would provide a general financial
Consultancy service to clients. I had identified the market need in Haughey Boland & Company
during my auditing work but more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided tofocus on were:
• Preparation of property assembled requestsfor financing from banks.
• Preparation of well constructed projected cashflow and profit and loss statements.
• Accompanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
"for the timely production of them.
• Being a sonnJ' -,s board for aii Kinds of operating issues - both problems and perceived
otmortunxtes.
• Guidance on where to go and how to request professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Actingfor clients in the purchase or sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in the name of Business
Enterprises Limitedfrom December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful. Typically, it occupied well over 100% of 50-
hour weeks.
2. The service I gavetopersons who wished to boldfends oflshore.
Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provile a service I required that it be on a
minimalist basis. Towards this my stipulations were:
• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these fbnds would be conveyed to me directly and
orally by the person concerned;
0
I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
ry

• I would tjeitherissue'nor obtain.receiptsfor movements in funds. Neither would I keep any

ledger records, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisagedfor this service but over time it became necessary to
recover costs on a case by case basis.
My operating procedurefor this service had butfour components:

•• A deposit account in G&M that I have described as a hotchpotch account.

• A nrwrrnal memorandum record I kept in my office under my personal control.
• Afloat account in AEB.
• A monthly reconciliation of the sum of the memorandum records with the sum of the
account(s) in G&M and any float balances.
In the interest of completeness perhaps I should add also:

• G&M would be aware of the total funds I had in my hotchpotch account

• G&M would not be aware of the names of the depositors whose funds, in aggregate,
comprised tlie ^w'ncce in the hotchpotch account albeit that a name and an amount couIU
surface as part o* another business transaction with the banK, e.g. a back-to-back loan.
• dome of my clients would be aware generally that the funds they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were offshore but would have
no awareness or care about the name of the bank in which their money was deposited.
• Only I knew the names in the memorandum account and only I knew the ownership of the
balance in thefloat account kqpt in ABB.
5. The information requested by Ms. Mackey on the 6 December 2000.

The information requested by Ms. Mackey on 6 December"2000 is given in the three schedules
that are appended to this letter.
Schedule 1 relates to the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had offshore deposits in GAM through my procedure.

Yours sincerely,
 80-EDULE1

Name. OfTihore Back to Patt Oapodt DsfrOapoaft Source of Fund* Source of Funds
DaponHa Back loan. Opened Cloaad Offahore Irish Pounds.

A. C. Murray. No. aarfy 1080a. c. 1987/88. AIL Nona.

Appendix XV (160) (2) (a)
Office of the Inspectors, 4 St. Johns,
3 r d Floor, Park Avenue,
Trident House, Sandymount
Blackrock, Dublin 4.
Co. Dublin. 21 st November'01

Dear Sir,

With reference to your letter of the 16th inst., I wish to state that at no time had I
funds in Ansbacher nor was I a client of Ansbacher.

There is no evidence or proof that I was such a client.

I have read Mr. Stakelurn's extract and he does not state that I had funds in Ansbacher
Cayman or that I was aware that such funds had been deposited on my behalf.

The fact that Mr. Stakelum listed me as one of his clients does categorically not
prove that I had any account with Ansbacher.

I have at all times stated that I was a client of Guinness Mahon and that, subsequent to
that, I was approached by Mr. Stakelum to handle the funds on my behalf in order to
obtain a better interest rate. He alone deposited the funds and I was not aware of the
location of the account.
th
I have read through the transcript of my examination on the 30 January 2001 and,
looking at some of the questions and answers and in particular numbers 113, 114,
115, 116 and 117, it appears that when I said 'yes', I was agreeing with the Inspector,
Ms. Mackey. This was not the case. I was saying 'yes' as a matter of courtesy that I
was attentive to what she was saying.
I would again stress that I was not a client of Ansbacher Cayman.

Yours faithfully,

Austin C. Murray
Appendix XV (161) Mr William Quinn & Mrs Eileen Quinn
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to
Mr William Quinn & Mrs Eileen Quinn.

a) Extract of Transcript of evidence of Mr Jack Stakelum dated 8

November 2000.

b) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

c) Letter of 6 November 2000 with enclosures to Inspectors.

d) Extract of letter from Mr Jack Stakelum to Inspectors of 21

February 2001 with enclosure.

e) Letter of 30 March 2001 from Mr Paul J Quinn.

Appendix XV (161) (J) (a) . 1
23 147 Q. When d i d t h a t start?

24 A. I am i n c l i n e d t o b e l i e v e 1 9 7 6 b u t i t m i g h t h a v e been

25 1977. I w o u l d h a v e s t a r t e d o n my own i n l a t e 1975.

26 i o n l y h a d one y e a r of o p e r a t i o n s in 1975.

27 148 Q. Would y o u t e l l us what t h e a r r a n g e m e n t in a general

28 way w a s w i t h Mr. T r a y n o r . How was t h i s service

29 operated?
r

1 A. If I can t a k e a t y p i c a l example, a c l i e n t may h a v e

2 a s k e d me t o l o o k a f t e r funds t h a t i n almost all
3 cases that I am a w a r e o f w e r e a l r e a d y abroad.
4 I w o u l d h a v e a s k e d Mr. T r a y n o r t o a d v i s e me w h e r e

5 t h e funds might be t r a n s f e r r e d to, and then the

6 c l i e n t w o u l d i s s u e i n s t r u c t i o n s when I g o t the
7 t r a c k i n g r o u t e o r a c c o u n t name o r c o d e o r whatever

8 they might be.

9 149 Q. C o u l d you n o t b e a l i t t l e b i t more s p e c i f i c because

10 . y o u know t h e s e t e r m s , I don't know. Would y o u m i n d

11 e x p l a i n i n g them t o us?

12 A. If t h e c l i e n t w i s h e d t o p l a c e t h e f u n d s w i t h me a n d

13 t i . y w e r e i n some R o y a l Bank o f S c o t l a n d i n Jersey

14 or wherever.

15 150 Q. This i s c l i e n t ' s of yours?

16 A. Yes.

17 151 Q. Why w o u l d t h e y w a n t t o p l a c e t h e i r funds w i t h you?

18 A. They might be unhappy a b o u t m o n i t o r i n g t h e funds in

19 t h e s e n s e of what i n t e r e s t rate...(INTERJECTION).

20 152 Q. But you were n o t a bank?

21 A. No.
22 153 Q. They were a s k i n g y o u r a d v i c e a s t o where t o p u t the
23 funds?
24 A. T h e y w e r e a s k i n g me w h e t h e r I c o u l d m o n i t o r those
25 f u n d s on t h e i r behalf.
26 154 Q. M o n i t o r i s a word you u s e ; I don't understand it.
27 Y o u r c l i e n t s h a v e f u n d s a n d t h e y come i n t o you.

28 What d o t h e y a s k y o u t o do?
29 A. They would s a y 'We h a v e f u n d s o f f s h o r e * wherever
•31
 1 t h e y m i g h t h a v e been 'Can you l o o k a f t e r these funds
2 for me.'
3 155 Q. " C a n you l o o k a f t e r these funds." What d i d that
4 mean?

5 A. Would y o u e n d e a v o u r t o g e t t h e b e s t i n t e r e s t rate.
6 Would y o u m o n i t o r t h e f u n d s . '
7 156 Q. Take i t slowly. Would you e n d e a v o u r t o g e t t h e best
8 interest rate. Were t h e y a s k i n g y o u t o change
9 w h e r e t h e i r f u n d s w e r e i n t o some o t h e r financial

10 institution?

11 A. I d o n ' t t h i n k t h e y w o u l d come i n a n d s a y 'We h a v e

12 funds. W i l l you c h a n g e t h e m f o r some o t h e r

13 fx . n c i a l i n s t i t u t i o n . ' I think a discussion would

14 h a v e a r o s e w i t h t h e m t h a t t h e y w o u l d h a v e a d v i s e d iue
15 t h a t t h e y h a d £X i n f u n d s a n d s a y ' C a n y o u look
16 after t h e s e f u n d s on my b e h a l f . '
17 157 Q. What d o e s t h a t mean?
18 A. I t means t h a t t h e y might n o t want t o correspond
19 • -• d i r e c t l y with whatever foreign bank t h e y were using.
20 They m i g h t n o t want t o g e t m a i l r e c e i v e d from
21 f o r e i g n b a n k s on t h e b a s i s o f m o n t h l y statements.
22 They w o u l d n ' t f e e l t h a t n e c e s s a r i l y c o m p e t e n t about
23 l o o k i n g a t whether t h e funds should be placed
24 one month o r t h r e e months o r s i x m o n t h s . And t h a t
25 t h e y w o u l d l i k e me t o l o o k a f t e r those factors.
26 158 Q. What d i d you d o t h e n ?
27 A. I w o u l d p r o b a b l y a d v i s e t h e m a t some s t a g e that
28 t h e r e would be a f a c i l i t y available through
29 G u i n n e s s & Mahon.
r^

1 159 Q. You t h e n c o n t a c t e d G u i n n e s s & Mahon?

2 A. Yes.

3 160 Q. You u s e d t h e word " f a c i l i t y . " What d o e s t h a t mean

4 in this connection?

5 A. I t means I would p r o b a b l y have contacted

6 Des T r a y n o r . I would have s a i d "I have a client

7 — f o r t h e m o s t p a r t h e w o u l d n ' t know who my c l i e n t s

8 were — t h a t wishes t o have funds m o n i t o r e d abroad

9 by me.•

10 161 Q. D o n ' t u s e d t h e word " m o n i t o r e d " b e c a u s e I don't

11 u n d e r s t a n d what i t means. You h a v e a client.

12 What i s h e t o d o ?

13 A. De... T r a y n o r i s t o g i v e me a n a c c o u n t n u m b e r , a

14 reference, a b a n k w h e r e t h e c l i e n t who w o u l d h a v e

15 t h e funds would have t o g i v e i n s t r u c t i o n s t o his

16 b a n k t o h a v e t h e f u n d s moved. Those funds —

17 I d o n ' t understand these things e i t h e r — might be

18 moved t o a r e c e i v i n g bank.

19 162 Q. This i s very important. I f you d o n ' t u n d e r s t a n d it,

20 I u n d e r s t a n d even l e s s . Let us take a typical

21 c l i e n t with funds i n J e r s e y . You t e l l Mr. Traynor

22 that this client is dissatisfied. What d o e s

23 Mr. T r a y n o r t h e n d o ?

24 A. He g i v e s me c o d e d r e f e r e n c e s . I d o n ' t remember b u t

25 i t might well be a reference t o a bank account in

26 London f o r so and s o , for t h e a c c o u n t of s o and so.

27 163 Q. What was t h e bank?

28 A. Mr. C o s t e l l o , I d o n ' t remember a n d I am s u r e those

29 instructions would have v a r i e d o v e r t h e years.

33
 •n

1 164 Q. What was t h e a c c o u n t , i n w h o s e name w a s t h e account

2 t o be placed?

3 A. I have a d i f f i c u l t y answering t h a t question, not

4 wanting t o be uncooperative. A l l I am s a y i n g is

5 t h a t Mr. T r a y n o r w o u l d b e s e e k i n g t o g e t t h e funds

6 u n d e r h i s c o n t r o l and t h e r e i s a t r a n s f e r process.

7 165 Q. You m u s t h a v e known t h e f i n a n c i a l institution in

8 which your c l i e n t s ' s funds were going t o be placed?

/•"N 9 A. The o n l y answer I can g i v e t o t h a t is I don't recall

10 because over the years they probably used d i f f e r e n t

11 financial institutions.

12 166 Q. T e l l me some o f t h e m t h a t w e r e u s e d that

13 Mr. l ' r a y n o r would h a v e t o l d you a b o u t . G i v e me t h e

.14 n a m e s o f some o f t h o s e , Mr. Stakelum?

15 A. It i s very difficult unde? o a t h , b u t l e t us try

16 G u i n n e s s & Mahon London f o r a s t a r t . I don't know.

17 But i f i t w a s G u i n n e s s & Mahon L o n d o n , it would

18 p r o b a b l y b e a c c o u n t of so and s o , reference so and

19 so e t c . etc.: B u t I am n o t a b s o l u t e l y p o s i t i v e of

20 that. It c o u l d a l s o v a r y d e p e n d i n g on t h e currency.

21 I f i t was d o l l a r s i t m i g h t b e s o m e t h i n g else.

22 167 Q. What o t h e r f i n a n c i a l i n s t i t u t i o n d i d he t e l l you

23 t h a t t h e money w a s g o i n g t o b e d e p o s i t e d in?

24 A. I don't know, I j u s t d o n ' t know. I t would be a

25 once-off instruction. I don't know. It probably

26 would d e p e n d on w h e r e t h e f u n d s were coming from

27 too.

28 168 Q. Do y o u r b e s t . I am s u r e y o u a r e u n d e r strain,

29 Mr. S t a k e l u m . T e l l me t h e n u m b e r s o f other

34
r

1 institutions t h a t c l i e n t s o f y o u r s h a d money
2 d e p o s i t e d as a r e s u l t of your c o n t a c t with
3 Mr. Traynor?

4 A. I just cannot answer t h a t . That i s not wanting to

5 be uncooperative, I j u s t cannot remember.

6 169 Q. Why c a n ' t y o u r e m e m b e r ?
7 A. How d o I a n s w e r a q u e s t i o n o f why I c a n n o t remember?
8 170 Q. For example, were any of t h e funds lodged i n any of
9 t h e G u i n n e s s & Mahon s u b s i d i a r i e s i n Cayman o r in
10 t h e Channel Islands?

11 A. I don't think so. But I t h i n k t h e funds would b e

12 i n i t i a l l y l o d g e d s o m e w h e r e maybe f o r t h e a c c o u n t of

13 G . ' n n e s s Mahon Cayman, r e f e r e n c e number s o and so,

14 m a y b e f o r t h e a c c o u n t i n G u i n n e s s & Mahon L o n d o n f o r

15 G u i n n e s s & Mahon D u b l i n . I am n o t t o o sure.

16 You w o u l d g e t s p e c i f i c instructions.

17 171 Q. I t may h a v e b e e n t h e a c c o u n t o f G u i n n e s s & Mahon in

18 D u b l i n o r G u i n n e s s & Mahon i n L o n d o n . Was t h i s the

19 offshore b a n k we a r e t a l k i n g a b o u t , G u i n n e s s & Mahon

20 Cayman T r u s t , t h e Ansbacher bank. They would h a v e

21 been lodged i n i t s account i n Dublin or lodged in
22 i t s a c c o u n t i n London?
23 A. I t may w e l l h a v e b e e n , I don't remember.
24 172 Q. B u t y o u a r e u n d e r o a t h now?
25 A. That's right.
26 173 Q. You a r e u n d e r o a t h . Can y o u s a y t h a t f u n d s your
27 c l i e n t h a d a s k e d you i n r e l a t i o n t o a s s i s t a n c e were
28 l o d g e d i n a n a c c o u n t i n t h e name o f G u i n n e s s Mahon
29 Cayman T r u s t i n D u b l i n o r i n London?
o

1 A. I c a n n o t remember. I s u s p e c t t h a t some o f the

2 i n s t r u c t i o n s g i v e n a t t h e t i m e w o u l d b e w h a t was at
3 t h e b e s t r e q u i r e m e n t s of t h e G u i n n e s s & Mahon b a n k ,
4 what t h e i r i n t e r n a l ...(INTERJECTION).
5 174 Q. A few m i n u t e s a g o you t o s a i d t o me t h a t you g a v e
6 Mr. T r a y n o r i n s t r u c t i o n s a n d t h a t you t r a n s f e r r e d
7 f u n d s t o him a n d t h e y w e r e t r a n s f e r r e d offshore, is
8 t h a t not r i g h t . D i d n ' t you s a y t h a t t o me a few
9 minutes ago?
10 A. They w e r e p r o b a b l y o f f s h o r e already. I t h o u g h t we
11 were t a l k i n g about a client...(INTERJECTION).
12 175 Q. They were o f f s h o r e a l r e a d y you t h i n k ?
13 A. i . most of t h e funds were o f f s h o r e already.
14 176 Q. A l l t h e f u n d s of t h e s e c l i e n t s we a r e t a l k i n g about
15 were offshore. Did you e v e r h a v e c l i e n t s c o m i n g i n
16 t o you w i t h f u n d s t h a t w e r e n ' t o f f s h o r e ?
17 A. Yes.
18 177 Q. What w o u l d h a p p e n t h e n ?
19 A. At d i f f e r e n t stages, in the early stages I think
20 I r i s h pounds could be converted w i t h o u t any problem
21 into Sterling. I t i s one a n d t h e same i n the
22 1970's. Then - t h e y c o u l d b e moved from Sterling.
23 178 Q. Were t h e y p u t o f f s h o r e , t h e funds?
24 A. Yes.
25 179 Q. Where?
26 A. A l l I know i s t h a t w i t h Des T r a y n o r I w o u l d h a v e
27 a s s u m e d G u i n n e s s Mahon Cayman T r u s t , later
28 Ansbacher. But i t c o u l d w e l l h a v e b e e n
29 C o l l e g e T r u s t e e s o r G u i n n e s s & Mahon G u e r n s e y .
36
 1 180 Q. One o r t h e other?

2 A. Yes, I assume one o r t h e other.

3 181 Q. Did any of y o u r c l i e n t s t o y o u r knowledge establish

4 t r u s t s w i t h t h e a s s i s t a n c e o f G u i n n e s s & Mahon w i t h

5 Mr. T r a y n o r e i t h e r i n t h e Cayman I s l a n d s o r i n the

6 Channel Islands?

7 A. N o t t o my k n o w l e d g e .

8 182 Q. None o f t h e m t o l d y o u t h a t t h e y h a d d o n e this?

9 A. No.

10 183 Q. Mr. T r a y n o r d i d n ' t t e l l you t h a t h e w a s g o i n g to

11 suggest t h i s to them?

12 A. No.

13 184 Q. Y.*, a r e p r e t t y c e r t a i n o n t h a t o r a r e y o u d o u b t f u l

14 about it?

15 A. I am n o t a w a r e c e r t a i n l y o f a n y c l i e n t s that

16 e s t a b l i s h e d such t r u s t s . I am n o t a w a r e o f any

17 that did.
18 185 Q. If they didn't establish trusts, you a r e aware of

19 c l i e n t s who t r a n s f e r r e d funds offshore?

20 A. Yes, t h a t ' s right.

21 186 Q. We w i l l b r e a k now f o r a c u p o f c o f f e e ,

22 Mr. S t a k e l u m , for about ten minutes or so.

23

24 SHORT ADJOORMMHarr
25

26
27

28

29
Appendix XV (161) ( l ) ( b )
OurRef: C/S10/NM
18* Octobcr 2000
Mr. Jade Stakelum
"Fairmont"
BaUyrooan Road
Kilpedder
Co. Widdow
Strkfly Private & Confidential - Addressee Only
Dear Sir
T
«?fer tn ymrr letter of 11 October 2000, and I reply on my own behalf, and on behalf of my
colleagues, Mr. Justice Declan Costdlo and Mr. Paul XXUvvou.
t
We now wish to examine you under oath concerning the matters set out in our two letters dated
30 August 2000 and 21 September 2000. To that "end, I propose that an interview would take
place in our offices at the above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor at txo above
phone number to confirm either date, or to make mutually conveniert alternative arrangements if
those dates do not suit you.
We note your refusal to provide us with names of your clients prior to examination. I must point
out to you that you are obliged by law to provide us with the information we have required of
you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of the Companies Act 1990 imposes a duty upon you to
comply with our requirement, and, in the case of a refusal todo so, mdces provision for the
matter to be dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
relation to the transfer of funds to cither of 1hose islands. We require this information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidious to disclose the identity of your clients. Once again, I must
point out to you that you are obliged to do so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain them.

Yours faithfully

Noreen Mackey B.L.

Appendix XV (161) (l)(c)
 "FAIRMONT"
JACK STAKELUM BALLYRONAN ROAD
CHARTERED ACCOUNTANT .
TELEPHONE: 2810646 FAX: 2810645 KILPEDDER
MOBILE: 087 2854660 CO. WICKLOW

The Inspectors
3* Floor
Trident House SffT. A0»
Blackrock
co^mm

6 November, 2000

Dear Sirs,
With rt . ence to your letter of the 18* October, and in particular the third
rarronph, I should point «"t th*t I did not rwfl'w •• •»«•»» *n «r»>vide the information in
question, merdy thatlshouldbeaflfonledtheoi^rtunitytoai^whylshouldnotbe
asked to divulge such information. The persons in question dealt with me cm an
understanding of confidentiality, and aa the Inspectors will surely appreciate, it ts difficult
not to honour that confidentiality, particularly when one has been used, over one s
professional life, to honouring the confidentiality of Clients.
However, as you point outforcefully in your letter, you are not prepared to allow
me that opportunity and you have referred to the legal position. In the circumstances, I
attach a list of the names and addresses of the penons in question.
Yours faithfully,

gad;

V.A.T. Number 2854485K

 mci&m . i-*i7e<L 6 Axva^sae

Bill Quinn, c/o Paul Quinn, 25 the Quany, Portmaraock, Ca Dublin. (deceased)

T
Appendix XV (161) ( l ) ( d )
 (e/mc,T)

JOHN J. STAKELUM
"Fairmont"
BaHyronan Road,
Kilpedder, Co. Wicklow.

21 February 2001.

pFSlC0UrtInSPeCtoIS' 5 FM . W
Trident House,
Blackrock,
Co. Dublin.
Re: Interviews with the Inspectors on 8/11/2000 and 6/12/2000.
Dear Inspectors,

The content in sections 1 and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000.
 1. The Consultancy Bnsiaess I set np in 1975.
•

In December 1975 I decided to set up a business that would provide a general financial
Consultancy service to clients. I had identified the market need in Haughey Boland & Company
during my auditing work bat more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided tofocus on were:

• Preparation of properly assembled requestsfor financing from banks.

• Preparation of well constructed projected cashflow and profit and loss statements.
• Accompanying clients at meetings with their bankers.
- • The presentation of meaningful management accounts and the procedures within businesses
for the timely production of them.
• Being a soua-'nr; board for all lands of operating issues - both problems and percel.^*.
opportunites.
• Guidance on wnere to go and how to request professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Acting for clients in the purchase or sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in the name of Business
Enterprises Limited from December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful Typically, it occupied well over 100% of 50-
hour weeks.
2, The service I gave to persons who wished to hold funds offshore.

Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards this my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
° I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
 • I would tjeither issue'nor obtain receiptsfor movements in funds. Neither would I keep any
ledger records, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisaged for this service but over time it became necessary to
recover costs on a case by case basis.
My operating procedurefor this service had butfour components:
i •
• A deposit account in G&M that I have described as a hotchpotch account.
• A manual memorandum record I kept in my office under my personal control.
• Afloat account in AIB.
• A monthly reconciliation of the sum of tbe memorandum records with the sum of the
accounts) in G&M and any float balances.
In the interest of completeness perhaps I should add also:

• G&M would be aware of the total funds I had in my hotchpotch account

• G&M would not be aware of the names of the depositors whose funds, in aggregate,
comprised the balance in the hotchpotch account albeit that a name and an amount cc" 1J
surfoce as part v another business transaction with the tauL, e.g. a back-to-back loan.
• Scris cf my clients wouIJ Lo aware gcu^auy uuai luu uuals they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were offshore but would have
no awareness or care about the name of the bank in which their money was deposited.
' • Only I knew the names in the memorandum account and only I knew the ownership of the
balance in the float account kept in AIB.
5. The information requested by Ms. Mackey on the 6 December 2000.
The information requested by Ms. Mackey on 6 December'2000 is given in the three schedules
that are appended to this letter.
Schedule 1relatesto the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had offshore deposits in G&M through my procedure.

Yours sincerely,
 SCHEDULE 1

Name. Offshore Back to DateDepotf Dato Deport Source of Funds Source of Funds
Deposits Back loan. Opened C'oaad Offshore Irish Pounds.

Bill Quinn. Yes. No.' Late 1970s. On death - uncertain. All. None.
By wife c. 1887/88.
Appendix XV (161) ( l ) ( e )
Inspectors to Ansbacher (Cayman) Ltd. Paul J. Quinn,
3 rd . Floor, 25, The Quarry,
Trident House, Portmaraock,
Blackrock, Co. Dublin.
Co. Dublin.
1h
Your Ref. C/Q02/NSPM 13* March 2001.
Dear Sir/Madam,
I am in receipt of your letter of the 9th. Inst, and in response I would like to make the
following unsworn statement as requested:
My late father William Quinn died in 1985.1 understand that at that time my late
mother was informed of the existence of an account held by Mr. Jack Stakelum of
Business Enterprises Ltd. on my fathers behalf. At that time I understand that my
mother nomfcm:me as a contact on the account. Following my motliers death in
Tnly r>f 1997 and when contacted by Mr. S*"1'"1—^c in^rT^M nc about the
account. At no stage was I made aware of any connection of this account to any
particular institution other than that the money was "offshore". This account was
closed in October of 1997.

Specifically dealing with matters as set out in Appendix C of your letter I would like
to respond point by point as per the Appendix:
1. I never had any dealings with Caymen Island Trusts and Trust companies.
2. I never had any dealings with Guinness & Mahon (Ireland) Ltd.
3. I never had any dealings with Irish Intercontinental Bank Ltd.
4. As with 2. above.
5. As with 3. above.
6. I never appliedfor permission in relation to the Exchange control acts.
7. I never had any dealings with any Channel Island trusts or companies.
8. No bodies corporate connected with me had any dealings with the company,
My only point of contact in this matter has beat and is Mr. Jack Stakelum and I have
already been in contact with him in an effort to obtain any records he may have in
relation to the account. He informed me that he has not retained any records
concerning my late father or mother.
Yours Sincerely,

Paul J. Quinn.
Appendix XV (162) Dr Tom Tiernan
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Dr
Tom Tiernan.

a) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

b) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

c) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

d) Letter of 21 February 2001 and enclosures from Mr Stakelum to

Inspectors.

e) Statement of Dr Tom Tiernan dated 30 January 2001.

2. Correspondence received from or on behalf of Dr Tom Tiernan.

a) Letter of 3 December 2001 - Dr Tom Tiernan to the Inspectors.

Appendix XV (162) (1) (a)
 I I

23 147 Q. When d i d t h a t start?

24 A. i am i n c l i n e d t o b e l i e v e 1976 b u t i t m i g h t h a v e b e e n
25 1977. I w o u l d h a v e s t a r t e d on my own i n l a t e 1975.

26 I o n l y h a d o n e y e a r of o p e r a t i o n s i n 1975.
27 148 Q. Would you t e l l u s what t h e a r r a n g e m e n t i n a general
28 way was w i t h Mr. T r a y n o r . How was t h i s service
29 operated?
1 A. I f I c a n t a k e a t y p i c a l e x a m p l e , a c l i e n t may h a v e
2 a s k e d me t o l o o k a f t e r funds t h a t i n a l m o s t all

3 c a s e s t h a t I am a w a r e of w e r e a l r e a d y abroad.

4 I w o u l d h a v e a s k e d Mr. T r a y n o r t o a d v i s e me w h e r e

5 t h e funds might be t r a n s f e r r e d to, and t h e n the

6 c l i e n t w o u l d i s s u e i n s t r u c t i o n s when I g o t the

7 t r a c k i n g r o u t e o r a c c o u n t name o r c o d e o r w h a t e v e r

8 they might be.

9 149 Q. C o u l d you n o t b e a l i t t l e b i t m o r e s p e c i f i c because

10 you know t h e s e t e r m s , I d o n ' t know. Would y o u m i n d
11 e x p l a i n i n g them t o us?
12 A. I f t h e c l i e n t w i s h e d t o p l a c e t h e f u n d s w i t h me a n d
13 t h e y w e r e i n some R o y a l Bank of S c o t l a n d i n Jersey
14 or wherever.
15 150 Q. T h i s i s c l i e n t ' s of yours?
16 A. Yes.

17 151 Q. Why w o u l d t h e y w a n t t o p l a c e t h e i r f u n d s w i t h y o u ?
18 A. They m i g h t b e u n h a p p y a b o u t m o n i t o r i n g t h e f u n d s in
19 t h e s e n s e of what i n t e r e s t rate..,(INTERJECTION).
20 152 Q. B u t you w e r e n o t a b a n k ?
21 A. No.
22 153 Q. They w e r e a s k i n g y o u r a d v i c e a s t o w h e r e t o p u t the
23 funds?
24 A. They w e r e a s k i n g me w h e t h e r I c o u l d m o n i t o r those
25 f u n d s on t h e i r behalf.
26 154 Q. M o n i t o r i s a word you u s e ; I d o n ' t u n d e r s t a n d it.
27 Your c l i e n t s h a v e f u n d s and t h e y come i n t o you.
28 What d o t h e y a s k you t o do?
29 A. They w o u l d s a y 'We h a v e f u n d s o f f s h o r e ' wherever
31
t h e y m i g h t h a v e b e e n ' C a n you l o o k a f t e r these funds

for me.'

"Can you l o o k a f t e r these funds." What d i d that

mean?

Would y o u e n d e a v o u r t o g e t t h e b e s t i n t e r e s t rate.

Would y o u m o n i t o r t h e f u n d s . "

Take i t slowly. Would you e n d e a v o u r t o g e t t h e best

interest rate. Were t h e y a s k i n g y o u t o change

where t h e i r f u n d s w e r e i n t o some o t h e r financial

institution?

I d o n ' t t h i n k t h e y w o u l d come i n a n d s a y 'We h a v e

funds. W i l l you c h a n g e t h e m f o r some o t h e r

financial institution.' I think a discussion would

h a v e a r o s e w i t h t h e m t h a t t h e y w o u l d h a v e a d v i s e d me

t h a t t h e y h a d £X i n f u n d s a n d s a y ' C a n you look

after t h e s e f u n d s on my b e h a l f . '

What d o e s t h a t mean?

I t . m e a n s t h a t t h e y might n o t want t o correspond

-directly with whatever.foreign bank t h e y were using.

They m i g h t n o t want t o g e t m a i l r e c e i v e d from

f o r e i g n b a n k s on t h e b a s i s of m o n t h l y statements.

They w o u l d n ' t f e e l t h a t n e c e s s a r i l y c o m p e t e n t about

l o o k i n g a t whether t h e funds should be p l a c e d

one month o r t h r e e months o r s i x months. And t h a t

t h e y w o u l d l i k e me t o l o o k a f t e r t h o s e factors.

What d i d y o u do t h e n ?

I w o u l d p r o b a b l y a d v i s e t h e m a t some s t a g e that

t h e r e would be a f a c i l i t y available through

G u i n n e s s & Mahon.
1 159 Q. You t h e n c o n t a c t e d G u i n n e s s & Mahon?

2 A. Yes.

3 160 Q. You u s e d t h e w o r d " f a c i l i t y . " What d o e s t h a t mean

4 in this connection?

5 A. I t means I would p r o b a b l y have contacted

6 Des T r a y n o r . I would have s a i d ' I have a client

7 — for t h e m o s t p a r t h e w o u l d n ' t know who my c l i e n t s

8 were — t h a t wishes t o have funds monitored abroad

9 by me.'

10 161 Q. D o n ' t u s e d t h e word " m o n i t o r e d " b e c a u s e I don't

11 u n d e r s t a n d what i t means. You h a v e a client.

12 What i s h e t o do?

13 A. Det; T r a y n o r i s t o g i v e me a n a c c o u n t n u m b e r , a

14 reference, a b a n k w h e r e t h e c l i e n t who w o u l d h a v e

15 t h e funds would have t o g i v e i n s t r u c t i o n s to his

16 b a n k t o h a v e t h e funds moved. Those funds —

17 I d o n ' t understand these things e i t h e r — might be

18 moved t o a r e c e i v i n g bank.

19 162 Q. This i s very important. I f you d o n ' t u n d e r s t a n d it,

20 I u n d e r s t a n d even l e s s . Let us take a typical

21 c l i e n t w i t h funds i n J e r s e y . You t e l l M r . Traynor

22 that this client is dissatisfied. What d o e s

23 Mr. T r a y n o r t h e n do?

24 A. He g i v e s me c o d e d r e f e r e n c e s . I d o n ' t remember but

25 i t might well be a reference t o a bank account in

26 London f o r so and so, f o r t h e a c c o u n t of s o and so.

27 163 Q. What w a s t h e bank?

28 A. Mr. C o s t e l l o , I d o n ' t r e m e m b e r a n d I am s u r e those

29 instructions would have v a r i e d o v e r t h e years.

33
1 164 Q. What was t h e a c c o u n t , i n whose name was t h e account
2 t o be p l a c e d ?
3 A. I have a d i f f i c u l t y answering t h a t q u e s t i o n , not

4 wanting t o be u n c o o p e r a t i v e . A l l I am s a y i n g is

5 t h a t Mr. T r a y n o r w o u l d b e s e e k i n g t o g e t t h e f u n d s

6 under h i s c o n t r o l and t h e r e i s a t r a n s f e r process.

7 165 Q. You m u s t h a v e known t h e f i n a n c i a l institution in

8 which your c l i e n t s ' s funds were g o i n g t o b e p l a c e d ?
9 A. The o n l y a n s w e r I c a n g i v e t o t h a t i s I d o n ' t recall
10 because over the years they probably used d i f f e r e n t
11 financial institutions.
12 166 Q, T e l l me some o f t h e m t h a t were u s e d that
13 Mr. T r a y n o r w o u l d h a v e t o l d you a b o u t . G i v e me t h e
14 names o f some o f t h o s e , Mr. Stakelum?
15 A. I t i s very d i f f i c u l t under oath, but l e t us try
16 G u i n n e s s & Mahon London f o r a s t a r t . I don't know.
17 B u t i f i t was G u i n n e s s & Mahon London, i t would
18 p r o b a b l y b e a c c o u n t of s o a n d s o , r e f e r e n c e so and
19 so e t c . e t c . . But I am n o t a b s o l u t e l y p o s i t i v e of
20 that. I t c o u l d a l s o v a r y d e p e n d i n g on t h e currency.
21 I f i t was d o l l a r s i t m i g h t b e s o m e t h i n g else.
22 167 Q. What o t h e r f i n a n c i a l i n s t i t u t i o n d i d he t e l l you
23 t h a t t h e money was g o i n g t o b e d e p o s i t e d in?
24 A. I d o n ' t know, I j u s t d o n ' t know. I t would be a
25 once-off instruction. I d o n ' t know. It probably
26 w o u l d d e p e n d on w h e r e t h e f u n d s w e r e coming from
27 too.
28 168 Q. Do y o u r b e s t . I am s u r e you a r e u n d e r strain,
29 Mr. S t a k e l u m . T e l l me t h e numbers o f other
34
1 i n s t i t u t i o n s t h a t c l i e n t s o f y o u r s h a d money

2 d e p o s i t e d a s a r e s u l t of y o u r c o n t a c t with

3 Mr. Traynor?

4 A. I j u s t cannot answer t h a t . That i s not wanting to

5 be uncooperative, I j u s t cannot remember.

6 Q. Why c a n ' t y o u r e m e m b e r ?

7 A. How d o I a n s w e r a q u e s t i o n o f why I c a n n o t remember?

8 Q. For example, were any of t h e funds l o d g e d i n any of

9 t h e G u i n n e s s 6 Mahon s u b s i d i a r i e s i n Cayman o r in

10 t h e Channel Islands?

11 A. I don't think so. But I t h i n k t h e f u n d s w o u l d b e

12 i n i t i a l l y l o d g e d s o m e w h e r e maybe f o r t h e a c c o u n t of

13 Gv.; n n e s s Mahon Cayman, r e f e r e n c e number s o and so,

14 m a y b e f o r t h e a c c o u n t i n G u i n n e s s & Mahon L o n d o n for

15 G u i n n e s s & Mahon D u b l i n . I am n o t t o o sure.

16 You w o u l d g e t s p e c i f i c instructions.

17 Q. I t may h a v e b e e n t h e a c c o u n t o f G u i n n e s s & Mahon in

18 D u b l i n o r G u i n n e s s & Mahon i n L o n d o n . Was t h i s the

19 offshore b a n k we a r e t a l k i n g a b o u t , G u i n n e s s & Mahon

20 Cayman T r u s t , t h e Ansbacher bank. They would h a v e

21 been lodged i n i t s account i n Dublin or lodged in

22 i t s account in London?

23 A. I t may w e l l h a v e b e e n , I don't remember.

24 Q. B u t y o u a r e u n d e r o a t h now?

25 A. That's right.

26 Q. You a r e u n d e r o a t h . Can y o u s a y t h a t funds your

27 c l i e n t h a d a s k e d you i n r e l a t i o n t o a s s i s t a n c e were

28 l o d g e d i n a n a c c o u n t i n t h e name o f G u i n n e s s Mahon

29 Cayman T r u s t i n D u b l i n o r i n London?

35
rN

1 A. I c a n n o t remember. I suspect that some o f the

2 instructions g i v e n a t t h e t i m e would be what was at

3 the best r e q u i r e m e n t s o f t h e G u i n n e s s & Mahon b a n k ,

4 what t h e i r internal ...(INTERJECTION).

5 174 Q. A few m i n u t e s a g o you t o s a i d t o me t h a t y o u gave

6 Mr. T r a y n o r i n s t r u c t i o n s a n d t h a t you transferred

7 funds t o him and t h e y were t r a n s f e r r e d offshore, is

8 t h a t not right. D i d n ' t y o u s a y t h a t t o me a few

9 minutes ago?

10 A. They were p r o b a b l y offshore already. I t h o u g h t we

11 were t a l k i n g about a client...(INTERJECTION).

12 175 0. They were offshore a l r e a d y you think?

13 A. most of t h e funds were c f f s h o r e already.

14 17 6 Q. A l l t h e f u n d s o f t h e s e c l i e n t s we a r e t a l k i n g about

15 were offshore. Did you e v e r h a v e c l i e n t s coming in

16 t o you w i t h funds t h a t w e r e n ' t offshore?

17 A. Yes.

18 177 Q. What w o u l d h a p p e n t h e n ?

19 A. At d i f f e r e n t stages,, in the early stages I think

20 I r i s h pounds could be converted w i t h o u t any problem

21 into Sterling. I t i s o n e a n d t h e same i n the

22 1970's. T h e n - t h e y c o u l d b e moved f r o m Sterling.

23 178 Q. Were t h e y p u t o f f s h o r e , t h e funds?

24 A. Yes.

25 179 Q. Where?

26 A. A l l I know i s t h a t w i t h Des T r a y n o r I w o u l d h a v e

27 a s s u m e d G u i n n e s s Mahon Cayman T r u s t , later

28 Ansbacher. But i t could well have been

29 C o l l e g e T r u s t e e s o r G u i n n e s s & Mahon Guernsey.

36
f

1 180 Q. One o r t h e other?

2 A. Yes, I assume one o r t h e other.

3 181 Q. Did any of y o u r c l i e n t s t o y o u r knowledge establish

4 t r u s t s w i t h t h e a s s i s t a n c e o f G u i n n e s s & Mahon w i t h

5 M r . T r a y n o r e i t h e r i n t h e Cayman I s l a n d s o r i n the

6 Channel Islands?

7 A. N o t t o my k n o w l e d g e .

8 182 Q. None o f t h e m t o l d y o u t h a t t h e y h a d d o n e this?

9 A. No.

10 183 Q. M r . T r a y n o r d i d n ' t t e l l you t h a t h e w a s g o i n g to

11 suggest t h i s to them?

12 A. No.

13 184 Q. You a r e p r e t t y c e r t a i n o n t h a t o r a r e y o u d o u b t f u l

14 about it?

15 A. I am n o t a w a r e c e r t a i n l y o f a n y c l i e n t s that

16 e s t a b l i s h e d such t r u s t s . I am n o t a w a r e o f any

17 that did.

18 185 Q. If they didn't establish trusts, you a r e aware of

19 c l i e n t s who t r a n s f e r r e d funds offshore?

20 A. Yes, t h a t ' s right.

21 186 Q. We w i l l b r e a k now f o r a c u p o f c o f f e e ,

22 Mr. S t a k e l u m , for about ten minutes or so.

23

24 SHORT ADJOURNMENT
25

26

27

28

29
Appendix XV (162) (1) (b)
 >fft iiiji i.
Our Ref: C/S1Q/NM
18* October 2000
Mr. Jack Stakelum
"Fairmont"
Ballyronan Road
Kilpedder
Co. Wicklow
Strtetiv Private & Confidential - Addressee Only

Dear Sir
I refer to yovr ^ e r of 11 October 2000, and I rqply on my own behalf, and on behalf of nay
colleagues,
# Mr. Justice Dedan Costdb and Mr. Paul Rowan.
We now wish to examine you under oath concerning the matters set out in our two ldters dated
30 August 2000 and 21 September 2000. To that'end, I propose that an interview would take
place in our offices at the above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor at Ihe above
phone number to confirm either date, or to make mutually convenient alternative arrangements if
those dates do not suit you.
We note youf refusal to provide us with names of your clients prior to examination. I must point
out to you that you are obliged by law to provide us with the information we have required of
you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of the Companies Act 1990 imposes a duty upon you to
comply with our requirement, and, in the case of a refusal to do so, mikes provision for the
matter to he dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
relation to the transfer of funds to either of those islands. We require this information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidious to disclose die identity of your clients. Once again, I must
point out to you that you are obliged to do so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain them.
Yours faithfully

y^iuv.-

Noreen Madcey B.L.

 -FAIRMONT-
JACK STAKELUM BALLYRONAN ROAD
CHARTERED ACCOUNTANT .
TELEPHONE: 2810646 PAX: 2810645 KILPEDDER
MOBILE: 087 2854660 CO. W1CKLOW

The Inspectors
Moor flt
Trident House
Trident House W Au" *
Blackrock
CQ.IW1PMN

6 November, 2000

Dear Sro,
With reiL ence to your letter of the 18* Octobcr, tod La particular toe tiiird
prn^aph, I shoJd point u«i iluu I tfid not rcT tc- the information in
question, merely that I should be afforded the opportunity to argue why I should not be
asked to divulge such information. The persona in question dealt with me on an
understanding of confidentiality, and as the Inspector! will surely appreciate, it ts difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point cutforcefully in your letter, you are not prepared to allow
me that opportunity and you have referred to tbe legal position. In the circumstances, I
attach a list of the names and addresses of the persons in question.
Yours fiuthfUlly,

la&

V.A.T. Number 2854485K

r -

Tom Hern an, "RozeT, 529 Howth Road, Raheny, Dublin 5.

rv
 JOHN J. STAKELUM
"Fairmont"
Ballyronan Road,
Kilpedder, Co. Wicklow.

21 February 2001.

The High Court Inspectors, :-?s r r g m

3 rf Floor,
Trident House,
Blackrock,
Co. Dublin.
Re: Interviews with the Inspectors on 8/11/2000 and 6/12/2000.

Dear Inspectors,

The content in sections l and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000.
1. The Consultancy Bnsiaess I set op In 1975.
»

In December 1975 I decided to set up a business that would pro-vide a general financial
Consultancy service to clients. I had identified the market need in Haughey Boland & Company
during my giyifring work bat more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided to focus on were:

• Preparation of properly assembled requestsfor financing from banks.

• Preparation of well constructed projected cashflow and profit and loss statements.
• Acconqjanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
for the timely production of them.
• Being a souckil board for ali kinds of operating issues - both problems and percei.^I
nnnnrfiiiutos.
• Guidance on where to go and how to request professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Actingfor clients in the purchase or sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in tbe name of Business
Enterprises Limitedfrom December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful. Typically, it occupied well over 100% of 50-
hour weeks.
2. The service I gave to persons who wished to bold funds offshore.

Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards this my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
® I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
• I would tjeither issue'nor obtain receiptsfor movements in fluids. Neither would I keep any
ledger records, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisagedfor this sendee but over time it became necessary to
recover costs on a case by case basis.
My operating procedurefor this service had butfour components:
i »
•• A deposit account in G&M that I have described as a hotchpotch account.
• A rrwiffl^ memorandum record I kept in my office under my personal control.
• Afloat account in AIB.
• A monthly reconciliation of the sum of the memorandum records with the sum of the
accounts) in G&M and anyfloat balances.
In the interest of completeness perhaps I should add also:

• G&M would be aware of the totalfoods I had in my hotchpotch account

• G&M would not be aware of the names of foe depositors whose funds, in aggregate,
comprised the loboce in the hnt^hpntch account albeit that a name and an amount co i , M
surface as part ol another business transaction with the bank, e.g. a back-to-back loan.
• bome of my ciicuis would be aware generally mat the iunds they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were of&hore but would have
no awareness or care about the name of foe bank in which their money was deposited.
• Only I knew the names in the memorandum account and only I knew the ownership of the
balance in thefloat account kept in AIB.
5. The information requested by Ms. Mackey on the 6 December 2000.
The information requested by Ms. Mackey on 6 December'2000 is given in the three schedules
that are appended to this letter.
Schedule 1 relates to the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had ofishore deposits in G&M through my procedure.

Yours sincerely,
 SCHEDULE 1

Offrfwre Back to D«te Deport ^Deport Scu^ofFunds So^oerfFrnds

PmpotH. Back loon. Opened Cloead Offshore irtahPounde.

No. Earty 1960*. c. 1887/88. ' Uncertain.

 Rozel,
529 Howth Road,
Raheny,
Dublin 5.
Telephone: 831 0994

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 Rozel,
529 Howth Road,
Raheny,
Dublin 5.
Telephone: 831 0994

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T ' / L

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 Rozel,
529 Howth Road,
4 ere m?
Raheny,
Dublin 5.
Telephone: 831 0994
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Rozel,
529 Howth Road,
Raheny,
Dublin 5.
Telephone: 831 0994
Appendix XV (163) Mr Patrick Tolan
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Patrick Tolan.

a) Extract of transcript of evidence of Mr Jack Stakelum dated 8 November

2000.

b) Letter of 18 October 2000 from Inspectors to Mr Jack Stakelum.

c) Letter of 6 November 2000 and enclosure from Mr Stakelum to

Inspectors.

d) Letter of 21 February 2001 and enclosures from Mr Stakelum to

Inspectors.

e) Statement of Mr Patrick Tolan dated 26 February 2001.

2. Correspondence receivedfrom or on behalf of Mr Patrick Tolan.

a) Letter of 14 January 2002 - Peter O'Boyle & Company Solicitors to

Secretary to the Inspectors.
Appendix XV (163) (1) (a)
When d i d t h a t start?

1 am i n c l i n e d t o b e l i e v e 1 9 7 6 b u t i t m i g h t h a v e been

1977. I w o u l d h a v e s t a r t e d o n my own i n l a t e 1975.

I o n l y had one y e a r of o p e r a t i o n s in 1975.

Would y o u t e l l us what t h e arrangement i n a general

way was w i t h Mr. T r a y n o r . How was t h i s service

operated?
1 A. If I can t a k e a t y p i c a l example, a c l i e n t may h a v e
2 a s k e d me t o l o o k a f t e r funds t h a t i n almost all

3 cases that I am a w a r e o f w e r e a l r e a d y abroad.

4 I w o u l d h a v e a s k e d Mr. T r a y n o r t o a d v i s e me w h e r e

5 t h e funds might be t r a n s f e r r e d to, and then the

6 c l i e n t w o u l d i s s u e i n s t r u c t i o n s when I g o t the

7 t r a c k i n g r o u t e o r a c c o u n t name o r c o d e o r whatever

8 they might be.

9 Q. Could you n o t be a l i t t l e b i t more s p e c i f i c because

10 y o u know t h e s e t e r m s , X d o n ' t know. Would y o u m i n d
11 e x p l a i n i n g them t o us?
12 A. If t h e c l i e n t w i s h e d t o p l a c e t h e f u n d s w i t h me a n d
13 t h e y w e r e i n some R o y a l Bank o f S c o t l a n d i n Jersey
14 or wherever.
15 Q. T h i s i s c l i e n t ' s of yours?
16 A. Yes.
17 Q. Why w o u l d t h e y w a n t t o p l a c e t h e i r f u n d s w i t h you?
18 A. They m i g h t b e unhappy a b o u t m o n i t o r i h g t h e f u n d s in
19 t h e s e n s e 6f what i n t e r e s t rate...(INTERJECTION).
20 Q. But you were n o t a bank?
21 A. No.
22 Q. They were a s k i n g y o u r a d v i c e a s t o where t o p u t the
23 funds?
24 A. T h e y w e r e a s k i n g me w h e t h e r I c o u l d m o n i t o r those
25 f u n d s on t h e i r behalf.
26 Q. M o n i t o r i s a word you u s e ; I don't understand it.
27 Your c l i e n t s h a v e f u n d s a n d t h e y come i n t o you.
28 What do t h e y a s k y o u t o d o ?
29 A. T h e y w o u l d s a y 'We h a v e f u n d s o f f s h o r e 1 wherever

31
 1 t h e y m i g h t h a v e b e e n ' C a n you l o o k a f t e r t h e s e funds
2 for me.1

3 155 Q. "Can y o u l o o k a f t e r t h e s e f u n d s . " What d i d that

4 mean?

5 A. Would y o u e n d e a v o u r t o g e t t h e b e s t i n t e r e s t rate.

6 Would y o u m o n i t o r t h e f u n d s . '

7 156 Q. Take i t s l o w l y . Would you e n d e a v o u r t o g e t t h e best

8 interest rate. Were t h e y a s k i n g y o u t o change

9 w h e r e t h e i r f u n d s w e r e i n t o some o t h e r financial

10 institution?

11 A. I d o n ' t t h i n k t h e y w o u l d come i n a n d s a y 'We h a v e

12 funds. W i l l y o u c h a n g e t h e m f o r some o t h e r

13 financial institution.' I think a discussion would

. 14 h a v e a r o s e w i t h t h e m t h a t t h e y w o u l d h a v e a d v i s e d me

15 t h a t t h e y h a d £X i n f u n d s a n d Bay ' C a n y o u l o o k

16 after t h e s e f u n d s on my b e h a l f . '

17 157 Q. What d o e s t h a t mean?

18 A. I t . m e a n s t h a t t h e y might n o t want to•correspond

^ 19 d i r e c t l y w i t h w h a t e v e r f o r e i g n bank t h e y .were using.

20 T h e y m i g h t n o t w a n t t o g e t m a i l r e c e i v e d from

21 f o r e i g n b a n k s on t h e b a s i s o f m o n t h l y statements.

22 They w o u l d n ' t f e e l t h a t n e c e s s a r i l y c o m p e t e n t about

23 l o o k i n g a t whether t h e funds should b e p l a c e d

24 one month o r t h r e e months o r s i x m o n t h s . And that

25 t h e y w o u l d l i k e me t o l o o k a f t e r t h o s e factors.

26 158 Q. What d i d you d o t h e n ?

27 A. I w o u l d p r o b a b l y a d v i s e t h e m a t some s t a g e that

28 t h e r e would be a f a c i l i t y available through

29 G u i n n e s s & Mahon.
 1 159 Q. You t h e n c o n t a c t e d G u i n n e s s & Mahon?

2 A. Yes.

3 160 Q. You u s e d t h e w o r d " f a c i l i t y . " What d o e s t h a t mean

4 in this connection?

5 A. I t means I would p r o b a b l y have contacted

6 Des T r a y n o r . I would have s a i d ' I have a client

7 — for t h e m o s t p a r t h e w o u l d n ' t know who my c l i e n t s

8 were — t h a t wishes t o have funds monitored abroad

9 by me.'

10 161 Q. D o n ' t u s e d , t h e word " m o n i t o r e d " b e c a u s e I don't

11 u n d e r s t a n d what i t means. You h a v e a client.

12 What i s h e t o do?

13 A. Des T r a y n o r i s t o g i v e me a n a c c o u n t n u m b e r , a

14 reference, a b a n k w h e r e t h e c l i e n t who w o u l d h a v e

15 t h e funds would have t o give i n s t r u c t i o n s to his

16 b a n k t o h a v e t h e funds moved. Those funds —

17 I don't understand these things e i t h e r — might be
18 moved t o a r e c e i v i n g bank.

19 162 Q. This i s very important. I f you d o n ' t u n d e r s t a n d It,

20 I understand even l e s s . Let us take a typical

21 c l i e n t w i t h funds i n J e r s e y . You t e l l M r . Traynor

22 that this client is dissatisfied. What does
23 Mr. T r a y n o r t h e n do?
24 A. He g i v e s me c o d e d r e f e r e n c e s . I don't remember but
25 i t might well be a reference t o a bank account in
26 London f o r so and s o , for t h e account of so and so.
27 163 Q. What w a s t h e bank?
28 A. Mr. C o s t e l l o , I d o n ' t r e m e m b e r a n d I am s u r e those
29 instructions would have v a r i e d o v e r t h e years.
 1 164 Q. What w a s t h e a c c o u n t , i n w h o s e name w a s t h e account

2 t o be placed?

3 A. I have a d i f f i c u l t y answering t h a t question, not

4 wanting t o be uncooperative. A l l I am s a y i n g is

5 t h a t Mr. T r a y n o r w o u l d b e s e e k i n g t o g e t t h e funds

6 under h i s c o n t r o l and t h e r e i s a t r a n s f e r process.

7 165 Q. You m u s t h a v e known t h e f i n a n c i a l institution in

8 which your c l i e n t s ' s funds were going t o b e placed?

9 A. The o n l y answer I can g i v e t o t h a t is I don't recall

10 because over the years they probably used d i f f e r e n t

11 financial institutions.

12 166 Q. T e l l me some o f t h e m t h a t w e r e u s e d that

13 Mr. T r a y n o r would h a v e t o l d you a b o u t . G i v e me t h e

.14 n a m e s o f some o f t h o s e , Mr. Stakelum?

15 A. It i s very difficult under oath, but l e t us try

16 G u i n n e s s & Mahon L o n d o n f o r a s t a r t . I don't know.

17 But i f it w a s G u i n n e s s & Mahon L o n d o n , i t would

18 p r o b a b l y b e a c c o u n t of so and s o , reference so and

19 - so e t c . etc. . B u t I am not" a b s o l u t e l y p o s i t i v e of

20 that. It c o u l d a l s o v a r y depending on t h e currency.

21 if it was d o l l a r s i t m i g h t b e s o m e t h i n g else.

22 167 Q. What o t h e r f i n a n c i a l i n s t i t u t i o n did he t e l l you

23 t h a t t h e money w a s g o i n g t o b e d e p o s i t e d in?

24 A. I don't know, I j u s t d o n ' t know. I t would be a

25 once-off instruction. I don't know. It probably

26 would depend on where t h e funds were coming from

27 too.

28 168 Q. Do y o u r b e s t . I am s u r e you a r e u n d e r strain,

29 Mr. S t a k e l u m . T e l l me t h e n u m b e r s o f other

34
 1 institutions t h a t c l i e n t s o f y o u r s h a d money
2 d e p o s i t e d as a r e s u l t of your c o n t a c t with

3 Mr. Traynor?

4 A. I j u s t cannot answer t h a t . That i s not wanting to

5 be uncooperative, I j u s t cannot remember.

6 169 Q. Why c a n ' t y o u r e m e m b e r ?
7 A. How d o I a n s w e r a q u e s t i o n o f why I c a n n o t remember?
8 170 Q. For example, were any of t h e funds lodged i n any of
9 t h e G u i n n e s s & Mahon s u b s i d i a r i e s i n Cayman o r in

10 t h e Channel Islands?

11 A. I don't think so. But I t h i n k t h e funds would b e

12 i n i t i a l l y l o d g e d s o m e w h e r e maybe f o r t h e a c c o u n t of

13 G u i n n e s s Mahon Cayman, r e f e r e n c e number s o a n d so,

14 m a y b e f o r t h e a c c o u n t i n G u i n n e s s & Mahon L o n d o n for

15 G u i n n e s s & Mahon D u b l i n . I am n o t t o o sure.

16 You w o u l d g e t s p e c i f i c instructions.
17 171 Q. I t may h a v e b e e n t h e a c c o u n t o f G u i n n e s s & Mahon in
18 D u b l i n o r G u i n n e s s & Mahon i n L o n d o n . Was t h i s the

19 offshore b a n k we a r e t a l k i n g a b o u t , G u i n n e s s s Mahon
20 Cayman T r u s t , t h e Ansbacher bank. They would h a v e
21 been lodged i n i t s account i n Dublin or lodged in

22 i t s a c c o u n t i n London?
23 A. I t may w e l l h a v e b e e n , I don't remember.
24 172 Q. B u t y o u a r e u n d e r o a t h now?
25 A. That's right.
26 173 Q. You a r e u n d e r o a t h . Can y o u s a y t h a t f u n d s your
27 c l i e n t h a d a s k e d you i n r e l a t i o n t o a s s i s t a n c e were
28 l o d g e d i n a n a c c o u n t i n t h e name of G u i n n e s s Mahon
29 Cayman T r u s t i n D u b l i n o r i n L o n d o n ?
1 A. I c a n n o t remember. I suspect that some o f the
2 i n s t r u c t i o n s g i v e n a t t h e t i m e w o u l d b e w h a t was at
3 t h e b e s t r e q u i r e m e n t s o f t h e G u i n n e s s & Mahon b a n k ,
4 what t h e i r i n t e r n a l ...(INTERJECTION).

5 174 Q. A few m i n u t e s a g o you t o s a i d t o me t h a t y o u g a v e

6 Mr. T r a y n o r i n s t r u c t i o n s a n d t h a t y o u t r a n s f e r r e d
7 funds t o him and t h e y were t r a n s f e r r e d offshore, is
8 that not r i g h t . D i d n ' t y o u s a y t h a t t o me a few
9 minutes ago?
10 A. They were p r o b a b l y o f f s h o r e already. I t h o u g h t we
11 were t a l k i n g about a client...(INTERJECTION).
12 175 Q. They were offshore a l r e a d y you think?
13 A. Yes, most of t h e funds were o f f s h o r e already.
14 176 Q. A l l t h e f u n d s o f t h e s e c l i e n t s we a r e t a l k i n g about
15 were offshore. Did y o u e v e r h a v e c l i e n t s c o m i n g in
16 t o you w i t h funds t h a t w e r e n ' t offshore?
17 A. Yes.
18 177 Q. What w o u l d h a p p e n t h e n ?
19 A. At d i f f e r e n t stages,- in the early stages' I think

20 I r i s h pounds could be converted w i t h o u t any problem

21 into Sterling. I t i s o n e a n d t h e same i n the
22 1970's. T h e n - t h e y c o u l d b e moved from Sterling.
23 178 Q. Were t h e y p u t o f f s h o r e , t h e funds?
24 A. Yes.
25 179 Q. Where?
26 A. A l l I know i s t h a t w i t h Des T r a y n o r I w o u l d h a v e
27 a s s u m e d G u i n n e s s Mahon Cayman T r u s t , later
28 Ansbacher. But i t c o u l d w e l l h a v e b e e n
29 C o l l e g e T r u s t e e s o r G u i n n e s s & Mahon G u e r n s e y .
f
1

1 180 Q. One o r t h e other?

2 A. Yes, I assume one o r t h e other.
3 181 Q. Did any of y o u r c l i e n t s t o y o u r knowledge establish

4 t r u s t s w i t h t h e a s s i s t a n c e o f G u i n n e s s & Mahon w i t h

5 Mr. T r a y n o r e i t h e r i n t h e Cayman I s l a n d s o r i n the

6 Channel Islands?
7 A. N o t t o my k n o w l e d g e .
8 182 Q. None of t h e m t o l d you t h a t t h e y h a d d o n e this?
9 A. No.
10 183 Q. Mr. T r a y n o r d i d n ' t t e l l you t h a t h e was g o i n g to
11 suggest t h i s to them?
12 A. No.

13 184 Q. You a r e p r e t t y c e r t a i n on t h a t o r a r e y o u d o u b t f u l
14 about it?

15 A. I am n o t a w a r e c e r t a i n l y o f a n y c l i e n t s that

16 e s t a b l i s h e d such t r u s t s . I am n o t a w a r e o f any

17 that did.

18 185 Q. If they didn't establish trusts, you a r e aware o f

19 c l i e n t s who t r a n s f e r r e d funds offshore?

20 A. Yes, t h a t ' s right.

21 186 Q. We w i l l b r e a k now f o r a c u p o f c o f f e e ,
22 Mr. S t a k e l u m , for about ten minutes or so.
23

24 SHORX ADJOURNMENT
25

26

27

28

29
Appendix XV (163) ( l ) ( b )
%

Our Bef: C/S1Q/NM i.

18* Octobcr 2000
Mr. Jack Stakelum
"Fairmont"
BaLtyronan Road
Kflpedder
Co. Wicklow
Strfcttv Private & Confidential -Addressee Only

Dear Sir
I refer to your letter of 11 October 2000, and I reply on my own behalf, and on behalf of my
colleagues,
# Mr. Justice Declan Costdlo and Mr. Paul Rowan.
We now wish to examine you under oalh conccxning the matters set out in our two letters dated
30 August 2000 and 21 September 2000. To that'end, I propose that an interview would take
place in our offices at the above address, either on Wednesday 8 or on Thursday 9 November, at
10.00 a.m. Perhaps you would make contact with our secretary, Ms Frances Gaynor at the above
phone number to confirm either date, or to make mutually convenient alternative arrangements if
those dates do not suit you.
We note your refusal to provide us with names of your cheats prior to examination. I must point
out to you that you are obliged by law to provide us with the information we have required of
you. In that regard, I refer you to Appendix B of our two letters, which sets out our statutory
powers. You will note that section 10(5) of the Companies Act 1990 imposes a duty upon you to
comply with our requirement, and, in the case of a refusal to do so, mikes provision for the
matter to he dealt with by the High Court
I therefore repeat our requirement that you provide us with the names and addresses of those
clients who you may have advised in relation to trusts in the Cayman or Channel Islands, or in
relation to the transfer of funds to eilher of those islands. We require Ihis information to be
provided in writing prior to the interview. We have noted also your expressed intention to argue
at interview that it would be invidioustodisclose the identity of your clients. Once again, I must
point out to you 1hat you are obliged to do so, in compliance with our requirement The interview
is not the proper forum in which to make submissions, and it is not our practice to entertain them.
Yours faithfully

Noreen Mackey B.L.

Appendix XV (163) (1) (c)
 "FAIRMONT"
JACK STAKELUM BALLYRONAN ROAD
CHARTKRBD ACCOUNTANT .
TELEPHONE: 2810646 PAX: 2810645 KILPEODER
MOBILE: 087 2854660 CO. WICKLOW

The Inspectors
3** Floor
Trident House usr ao*
Blackrock

6 November, 2000

Dear Sirs,
With reference to your letter of the 18* October, and in particular the third
paragraph, I should point out that I did not refiise as such to provide the information in
question, merely dot I should be afforded the opportunity to argue why I should not be •
asked to divulge such information. The persons in question dealt with me on an
understanding of confidentiality, and as the Inspectors will surely appreciate, it is difficult
not to honour that confidentiality, particularly when one has been used, over one's
professional life, to honouring the confidentiality of Clients.
However, as you point outforcefully in your letter, you are not prepared toallow
me that opportunity and you have referred to the legal poaitioa In the circumstances, I
attach a list of the names and addresses of the persons in questioa
Yours fkithfiilly,

End;

V.A.T. Number 2SS44S5K

 r
• rf M .

Prt Tolan, 40 EHcwood, Ralbftroham, Dublin 14.

Appendix XV (163) (1) (d)
 ( m ^ r )

JOHN J. STAKELUM
"Fairmont"
• Ballyronan Road,
Kilpedder, Co. Wicklow.

21 February 2001.

The High Court Inspectors, ' g WM

3 r i Floor,
Trident House,
Blackrock,
Co. Dublin.
Re: Interviews with the Inspectors on 8/11/2000 and 6/12/2000.

Dear Inspectors,

The content in sections 1 and 2 has been written in order to add clarification to the information
given in my Statement dated 22 September 2000.
1. The Consultancy Bosiiess I set np in 1975. •
• i
In December 1975 I decided to set up a business that would provide a general financial
Consultancy service to clients. I had identified the market need in Haughey Boland & Company
during my auditing work but more particularly during my receivership, liquidation and financial
restructuring experience. The services I decided tofocus on were:

• Preparation of properly assembled requestsfor financing from banks.

• Preparation of well constructed projected cashflow and profit and loss statements.
• Accompanying clients at meetings with their bankers.
• The presentation of meaningful management accounts and the procedures within businesses
for the timely production of them.
• Being a sounding board for all kinds of operating issues - both problems and perceived
opportunites.
• Guidance on where to go and how to request professional services.
• Helping businesses in difficulty to get back to profitability or to move logically to
receivership or liquidation.
• Actingfor clients in the purchase or sale of businesses.
• Acting in a non-Executive Director capacity when requested to do so.
Those were the principal service headings under which I operated in the name of Business
Enterprises Limitedfrom December 1975 until my retirement on the 31 October 1998. This
business was busy, demanding and successful. Typically, it occupied well over 100% of 50-
hour weeks.
2. The service I gave to persons who wished to hold finds offitoore.

Involvement with the savings of clients in any capacity whatsoever was not envisaged in my
original plan. When in due course I agreed to provide a service I required that it be on a
minimalist basis. Towards this my stipulations were:

• Funds would be deposited in licensed banks at rates of interest that would be competitive and
market related. This empowered depositors to be satisfied concerning both safety and
interest rates.
• All decisions in relation to movements in these funds would be conveyed to me directly and
orally by the person concerned;
« I would undertake no advisory or management role in relation to these funds and this fact
was communicated to each person with particular reference to decisions that concerned the
buying or selling of investments.
• I would neither issue'nor obtain.receiptsfor. movements in funds. Neither would I keep any
ledger records, issue statements or engage in correspondence.
• Information in relation to balances and rates of interest would be provided on an oral basis
only.
• Originally, no charge was envisaged for this service but over time it became necessary to
recover costs on a case by case basis.
My operating procedurefor this service had butfour components:
» *

• A deposit account in G&M that I have described as a hotchpotch account.

• A manual memorandum record I kept in my office under my personal control.
• Afloat account in AIB.
• A monthly reconciliation of the sum of the memorandum records with the sum of the
accounts) in G&M and anyfloat balances.
In the interest of completeness perhaps I should add also:

• G&M would be aware of the totalftinds I had in my hotchpotch account

• G&M would not be aware of the names of the depositors whose foods, in aggregate,
comprised the balance in the hotchpotch account albeit that a name and an amount could
surface as part of another business transaction with the bank, e.g. a back-to-back ban.
• Some of my clients would be aware generally that the funds they held offshore were in a
G&M vehicle. Other clients would be aware that their funds were offihore but would have
no awareness or care about the name of the bank in which their money was deposited.
• Only I knew the names in the memorandum account and only I knew the ownership of the
balance in thefloat account kept in AIB.
5. The information requested by Ms. Mackey on the 6 December 2000.
The information requestedby Ms. Mackey on 6 December'2000 is given in the three schedules
that are appended to this letter.
Schedule 1relatesto the list of names I sent to the Inspectors on 6 November 2000. All on this
schedule had ofMore deposits in G&M through my procedure.

Yours sincerely,

Jot
 8CHEDULE1

Ofhhora Backto Date Deposit Date Deposit :8ource of Funds Source of Funds
Name.
Deposits Back loan. Opened Cfoeed Offshore Irish Pounds.

Pat Tolan. Yaa. No. Early 1880a. a 1987/88 Nona. All.

Z0^
 IN THE MATTER OF THE COMPANIES ACTS 1963 TO 1990 AND
IN THE MATTER OF PART II OF THE COMPANIES ACTS 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)

THE HIGH COURT

1999 NO. 163 COS

STATEMENT OF PAT TOLAN

This unsworn statement is made by me in response to a request for assistance by

the Inspectors appointed in the above proceedings to investigate the affairs of the
above named company ("the Company"). I have never had any direct dealings
with the Company. The only transactions through which I might have had
indirect dealings with the Company were with Mr. Jack Stakelum of'Fairmont",
Baliyronan Road, Kilpedder, Co. Wicklow. I was in receipt of untaxed income
in the period 1983 to 1988. This income was paid to me in an annual lump sum
by cheque. I gave these cheques to Jack Stakelum who at that time had an office
in Clyde Road, Dublin 4. My arrangement with him was that he would place the
money an deposit with other money in an undisclosed account and whenever I
wanted some of it back I would contact him by telephone and tell him how much
I wanted. He would tell me when the money would be available and I would go
to his office and collect it in cash. This would usually take one or two days. I
received no documents and maintained no records in relation to this
arrangement. The understanding was that Mr. Stakelum would deduct part of
the incomefrom the deposit as his fee. I understood the money that I placed
with him was deposited with other monies in a form of general account. I was
not informed where the account was held or how the deposit was operated. I did
not know how the withdrawals were made. My understanding was that if
anything happened to me that the fund would be paid out to my family. In or
about 1990 I gave further sums of money to Mr. Stakelum under the same
arrangement. In the years 1994 and 1995 I requested monthly payments in the
form of bank drafts payable to Leeson Park Nursing Home where my mother
resided until she died in September 1995. I do notrecallwhat bank the drafts
were drawn on but I believe that it was an Irish bank.
In early 1998 I was informed by Mr. Stakelum that he proposed to cease
providing this service and he suggested I open an account in the Irish Permanent
Isle of Man Branch into which he would transfer the balance of funds standing to
my account. I opened an account in Irish Permanent (IOM) Limited of St.
James's Chambers, 64a Athol Street, Douglas, Isle of Man in joint names of
myself and my wife Paula Tolan.

On receipt of a letterfrom the Inspectors dated 24th January 20011 consulted my

solicitor Peter O'Boyle who wrote to Jack Stakelum on 7 th February enclosing
copies of the documents receivedfrom the Inspectors seeking any information or
documents that would be of assistance to the Inspectors. Mr. Stakelum replied
to my solicitor on 16th February 2001 in which he confirmed that he maintained
an account through Guinness & Mahon for offshore funds but had no
information or documents that would be of assistance. I attach a copy of my
solicitor's letter to Mr. Stakelum and Mr. Stakelum's reply.

I also attach a copy of the opening statement with Irish Permanent (IOM)
Limited showing a lodgement to that account on 17th April 1998. I have
instructed my solicitor to write to Irish Permanent (IOM) Limited seeking a copy
of any document evidencing the transfer of that money into that account and the
source of that money.
I have no records or documents relating to my transactions with Mr. Stakelum.
The only dealings I have had with the Company are the possible indirect
dealings I may have had through Jack Stakelum. If I did have such dealings with
the Company, such dealings were without my knowledge at the time such
dealings took place. All transactions that may have been with the Company
have been personal on my part, no company or trust having been involved. In
relation to such transactions I never executed any documents or obtained any
documents save on those occasions when I obtained a bank draft which I gave to
Leeson Park Nursing Home to pay my mother's account there. The person I
usually dealt with was Mr. Stakelum. On occasion, I dealt with his secretary
whose name I believe is Ann, or with a man called Ian. I dealt with no other
person in relation to these matters except them. I was not informed where funds
were deposited.

I did not at any time execute a deed of trust or other instrument in the Cayman
Islands or elsewhere whereby the Company or any other person associated with
it or acting at its direction was a trustee or managed the trust

I am not aware whether accounts in the name of Amiens Securities Limited,

Amiens Investment Limited or Kentford Securities Limited were used either to
lodge or withdraw moniesfrom the Company's account with Guinness & Mahon
(Ireland) Limited or Irish Intercontinental Bank Limited.
I am not aware of any code number used to designate my account in which the
record of any service such as I have described in this statement was maintained
although I assume that some such system must have existed.

I never availed of any service involving a loan and guarantee facility through
Mr. Stakelum or in relation to the Company or any of the companies mentioned
in the documents received by mefrom the Inspectors.

I am not aware that I or anyone on my behalf applied under the Exchange

Control Acts for permission in relation to the transactions that I describe in this
statement.

I never availed of any of the services referred to in the documents furnished by

the Inspectors relating to the deposit entitled"Guinness Mahon Cayman Limited
- re College Trustees".

There are no bodies corporate which had dealings with the Company in which I
had any direct or indirect interest or which were directly or indirectly controlled
by me or whose income or part of whose income I had power to enjoy, nor are
there any subsidiaries of such bodies corporate or any other entities related to
such bodies corporate and there were no Trusts which had dealings with the
Company in which I had any direct or indirect interest whether as Settlor,
Trustee of Beneficiary or whose income or part of whose income I had power to
enjoy so far as I am aware.

Dated: Qj^ February 2001

Signed:
PAT TOLAN

Ref: 3d/Tolan Pat No.6/statemeat of Pat Tolan 20.2.01

PETER O'BOYLE & COMPANY Solicitors
Commissioners for Oaths

7 North Great Georges Street

Dublin 1
Tel: (01) 874 6802
Fax: (01) 874 6809
E-mail: oboyleco@eircom.net
Frances Gaynor,
Secretary to the Inspectors,
3 l d Floor Trident House,
Blackrock,
Co. Dublin.

OurRef: P/TOL003-6/AH YourRef: CT09 14 January, 2002

Re: Pat Tolan.

Dear Ms. Gaynor,

We acknowledge your letter of 2 n d January with enclosures. Our client did not
receive these papers until we sent him copies and we have now received instructions.
We trust that the time limit mentioned in the Inspector's letter of 11th December will
be extended to receive this letter on behalf of our client. This is by way of a written
reply to the preliminary conclusion that our client was a client of Ansbacher. Our
client does not wish to avail of the opportunity to cross-examine Mr. Jack Stakelum.

The inspector's preliminary conclusion is as follows:-

"Mr. Tolan was a client of Ansbacher although he was probably unaware of that
fact.

Our client wishes to dispute this preliminary conclusion on the ground that for him to
be a client of Ansbacher some form of relationship of a contractual nature would have
had to exist between our client and Ansbacher. No such relationship existed. Our
client was not aware that any funds owned by him were deposited with Ansbacher
and Ansbacher were not aware that any funds held by it belonged to our client. There
is no evidence of any kind that our client was aware of any money belonging to him
being deposited with Ansbacher. The fact is that he was not so aware. We await
hearing from you.

PARTNERS : Peter O'Boyle, B.C.L., Terry O'Boyle, B.A.

ASSISTANT: Donnacha O'Baoighill B.C.L. Vat No. F1292514B
Appendix XV (164) Mr Neil McCann
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Neil McCann.

a) Transcript of evidence of Mr Neil McCann dated 31 March 2000.

b) Letter of 2 March 2000 - Mr Neil McCann to the Inspectors.

c) Letter of 5 January 1973 - Kennedy Crowley & Co to Mr Vincent Walsh.

d) Letter of 28 December 1972 - GMCT to Mr Nei 1 McCann.

e) Undated letter re Deed of Settlement - Mr Neil McCann to GMCT.

f) Letter of 11 May 2000 - Mr Sean Mooney to Mr Michael Meghen.

2. Correspondence received from or on behalf of Mr Neil McCann.

a) Letter of 21 December 2001 - Arthur Cox Solicitors to the Inspectors.

b) Letter and statement of 21 December 2001 - Mr Neil McCann to the

Inspectors.

c) letter of 21 December 2001 - Mr Alex Burns to Mr Michael Meghan.

Appendix XV (164) (1) (a)
PRIVATE EXAMINATION OF MR. NEIL McCANN

UNDER OATH

ON FRIDAY, 31ST MARCH 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

MS. MACKEY BL

Solicitor to the Inspectors MS. M. CUMMINS

Interviewee: MR. NEIL McCANN

Represented by: MR. DAN O'KEEFE SC

Instructed by: MR. MICHAEL MEGHEN

ARTHUR COX

EARLSFORT CENTRE

EARLSFORT TERRACE

DUBLIN 2
 I N D E X

WITNESS EXAMINATION PAGE

MR. N. McCANN MR. JUSTICE COSTELLO 6 - 6 2

MS. MACKEY 63 - 69

MR. JUSTICE COSTELLO 70 - 73

 1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON FRIDAY

2 31ST MARCH 2000

4 MR. JUSTICE COSTELLO: Mr McCann, we will start

5 our interview now.

6 MR. McCANN: Yes.

7 MR. JUSTICE COSTELLO: I am Declan Costello and

8 on my right is Ms. Mackey.

9 MR. McCANN: Yes.

10 MR. JUSTICE COSTELLO: We are two of the

11 Inspectors that have been

12 appointed by The High Court.

13 MR. McCANN: Yes.

14 MR. JUSTICE COSTELLO: What I explain to people

15 who come for interview is

16 this that this is not a Court.

17 MR. McCANN: Yes, right.

18 MR. JUSTICE COSTELLO: It is not a Tribunal.

19 MR. McCANN: Yes.

20 MR. JUSTICE COSTELLO: It is an interview.

21 MR. McCANN: Right.

22 MR. JUSTICE COSTELLO: If during the course of

23 this interview you want to

24 consult with your counsel or solicitor please tell

25 me and I will stop asking you questions and you

26 could do so.

27 MR. McCANN: Right.

28 MR. JUSTICE COSTELLO: And if during the

29 interview your counsel or

4
 1 solicitor wish to consult with you.

2 MR. McCANN: Right.

3 MR. JUSTICE COSTELLO: They can indicate this to

4 me and we will stop the

5 questions and then you can consult with your legal

6 advisors.

7 MR. McCANN: Thank you very much.

8 MR. JUSTICE COSTELLO: Mr. McCann, this

9 interview, as you know, is

10 under oath and I would ask now Ms. Cummins, our

11 solicitor, to administer the oath to you.

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

5
 1 MR. NEIL McCANN, HAVING BEEN SWORN, WAS EXAMINED AS

2 FOLLOWS BY MR. JUSTICE COSTELLO

4 1 Q. MR. JUSTICE COSTELLO: Mr. McCann, I think

5 we could best start if you

6 give us a bit of background?

7 A. Yes.

8 2 Q. To yourself?

9 A. Yes.

10 3 Q. And to the company Fruit Importers Ireland Limited?

11 A. Yes.

12 4 Q. And what members of your family were involved in

13 that and how the shares were held. Could you just

14 give me general background information?

15 A. Sure. Well, my father and brother died within two

16 years of each other back in 1952 and 1954 and I ran

17 then -- I took over the running of the company,

18 which was a family company operated out of Dundalk.

19 5 Q. Yes?

20 A. And then through the years, moving through the 1950s

21 into the 1960s, the company started to grow somewhat

22 and we moved into Dublin to establish a brokerage

23 business and partnership there with a North of

24 Ireland firm. Through the 1960s, you know, that

25 developed. In the 1970s we kept on, you know

26 growing until finally we came into the 1980s and at

27 that stage, in the early 1980s, the company merged

28 with D.C.C., and also went public, I think, a year

29 ot two afterwards.

6
 1 6 Q. Yes?

2 A. And probably in those early 1980s, you know, one of

3 my sons came into the business as Finance Director.

4 In 1986 we bought the UK company, which was Fyffes.

5 As I say we acquired that company and eventually we

6 changed the name of what had been FII -- the

7 company I think was changed from McCann to

8 Tormey Brothers & McCann then to FII. It went then

9 from FII to Fyffes. Fyffes was a pretty substantial

10 public company -- well, by our standards pretty

11 substantial.

12 7 Q. Yes?

13 A. Then another son then came in. He was a solicitor

14 and he came in, I think, in 1988 or 1987 and that

15 leaves us where we are today.

16 8 Q. Mr. McCann, was it the same company all these years

17 or was a separate company incorporated called FII?

18 A. I think FII was incorporated separately, yes, and it

19 acquired Tormey Brothers & McCann, which was the

20 partnership and then...(INTERJECTION).

21 9 Q. Yes. I...(INTERJECTION)?

22 A. Sorry?

23 10 Q. Sorry, Mr. McCann I just want to get the technical

24 details. The business that you carried on after

25 your father died?

26 A. Yes .

27 11 Q. Was that a Limited company?

28 A. That was a Limited company.

29 12 Q. What was the name of that company?

 1 A. It was Charles McCann Limited.

2 13 Q. Limited?

3 A. Yes .

4 14 Q. Yes. Was it in 1968 that FII was incorporated as a

5 new company?

6 A. I am just not sure. I knew we had been inviting in

7 various people and we said -- it was about that

8 time.

9 15 Q. However, am I right in saying that a new company was

10 formed called...(INTERJECTION)?

11 A. I am sorry, Justice.

12 16 Q. Yes .

13 MR. MEGHEN: Judge, my understanding is

14 that the new company was

15 formed at the time of the D.C.C., investment, which

16 was in either 1979 or 1980.

17 MR. JUSTICE COSTELLO: Yes .

18 MR. MEGHEN: And that the business and

19 assets of the former

20 companies.

21 MR. JUSTICE COSTELLO: That is ... (INTERJECTION)

22 MR. MEGHEN: Were transferred.

23 17 Q. MR. JUSTICE COSTELLO: Sorry, I may have been --

24 I may have misunderstood

25 some of the documents, Mr. McCann?

26 A. Yes .

27 18 Q. I understood that a new company was formed in 1968

28 called Fruit Importers Ireland Limited, am I wrong

29 in that?

8
 1 A. I think you are right, Justice.

2 19 Q. Well...(INTERJECTION)?

3 A. I think you are right. I am not just sure of the

4 years and that FII lived until -- it lived until the

5 beginning of the 1980s and then there was a new

6 company formed.

7 20 Q. Yes. I will come to that later. Really what I am

8 concerned at the moment is...(INTERJECTION)?

9 A. I think you are right. I am sorry I should know

10 that.

11 21 Q. With FII?

12 A. Yes.

13 22 Q. Yes?

14 A. I think I can find that out, you know, very quickly.

15 23 Q. If you look at page 3 of your statement to us

16 (Same Handed) (Exhibit 1)?

17 A. Yes, you are very good.

18 24 Q. Do you see part "B"? You say there:

19 "Fyffes pic is an Irish publicly quoted

company"?
20

21 A. Yes.

22 25 Q.
"I control approximately 10% of
23 Fyffes pic. Fyffes pic was
incorporated in 1980 and acquired the
24 fruit distribution business previously
carried on by another Irish company
25 Fruit Importers of Ireland Limited
which was incorporated in 1968"?
26

27 A. I think that the piece about, you know,

28 "Fruit Importers of Ireland Limited

incorporated in 1968,"
29

9
 1 I think this is accurate.

2 26 Q. That is really all I am concerned about?

3 A. Well, that is accurate.

4 27 Q. At the moment?

5 A. I believe.

6 28 Q. Yes. Presumably then this was incorporated and took

7 over the business which had been previously carried

8 on by Charles McCann Limited?

9 A. Yes, which had spread over the years.

10 29 Q. Of course?

11 A. Yes, yes.

12 30 Q. What I am concerned to know is, in 1968, who held

13 the shares in the company Fruit Importers of Ireland

14 limited?

15 A. Right.

16 31 Q. Just generally?

17 A. Okay, the general way...(INTERJECTION).

18 32 Q. Approximately?

19 A. Well, I controlled I think -- I certainly controlled

20 the majority of the shares.

21 33 Q. Yes?

22 A. Through my own holding and family trusts.

23 34 Q. Yes?

24 A. Which were being done around that time I think.

25 They were done through The Bank Of Ireland.

26 35 Q. Yes?

27 A. But it was more than 50%. It was probably in the

28 order of sixty something per cent.

29 36 Q. Yes. Who else was in the company then?

10
 1 A. Well, then there were a number of people in the

2 company. There were family companies around the

3 country and there were people in the market there

4 who had been invited to participate and they took

5 shares in the company.

6 37 Q. You were the major shareholder?

7 A. I was a major shareholder.

8 38 Q. Had you...(INTERJECTION)?

9 A. My ownself or my trusts.

10 39 Q. Your trusts?

11 A. Yes.

12 40 Q. We held the other shares then, the other 40%

13 approximately?

14 A. Yes.

15 41 Q. Divided up amongst a number of different people?

16 A. A number of different people.

17 42 Q. Yes?

18 A. Some big and some small.

19 43 Q. Small, yes. I see. Did you have any brothers or

20 sisters in the company?

21 A. No.

22 44 Q. At that stage?

23 A. No, no.

24 45 Q. It was mainly controlled then by yourself?

25 A. Yes.

26 4 6 Q. And then later your sons came in and we can deal

27 with that later?

28 A. Yes.

29 47 Q. Who were your accountants, the firms, the company's

11
 1 accountants, then?

2 A. The accountants were a firm called Story & Phelan.

3 48 Q. Yes?

4 A. Which the Managing Partner was Jack Story.

5 49 Q. Yes?

6 A. And they continued as the accountants from the

7 foundation until right into after the deal was done

8 with Fyffes.

9 50 Q. Yes. That would be in the 1980s?

10 A. In the 1980s.

11 51 Q. Yes?

12 A. And then they were acquired by SKC.

13 52 Q. Yes. Story & Phelan were acquired?

14 A. Story & Phelan.

15 53 Q. Story & Phelan were your accountants then, the

16 firm's accountants?

17 A. They were the auditors, yes.

18 54 Q. And auditors, yes?

19 A. Yes.

20 55 Q. Did you have a personal accountant yourself looking

21 after your own personal affairs or did they look

22 after your affairs as well?

23 A. I think SKC were the personal accountants.

24 56 Q. Yes. You would have an association with SKC then

25 for a very long time?

26 A. For a long time.

27 57 Q. Yes. Did you have a solicitor then, a personal

28 solicitor, who looked after your own affairs?

29 A. Yes. Well, there were two firms involved there.

12
 1 58 Q. Yes?

2 A. I had a firm in Dundalk called Daniel O'Connell &

3 Son.

4 59 Q. Yes?

5 A. The principal was Peter O'Connell.

6 60 Q. Yes?

7 A. And then in Dublin we had Coxs and we operated

8 mostly with Denis Bergin and at a later stage with

9 Mr. Michael Meghen.

10 61 Q. Yes. I want to come to your meeting in

11 Guinness & Mahon, your first association with them.

12 When did you first become associated with

13 Guinness & Mahon?

14 A. I think it was at a time in the 1960s that we were

15 trying to buy a company called The Tropical Fruit

16 Company and Guinness & Mahon were acting for them,

17 and we more or less thought we had negotiated a deal

18 but it fell through, and the person at that stage

19 was a man called William Forwood.

20 62 Q. Yes. That is when you first met them?

21 A. I believe so.

22 63 Q. When did you first start then to enter into a client

23 relationship with them?

24 A. Again, I am fairly certain but I will just say I

25 think or I believe, I think it was the time of the

26 first bank strike.

27 64 Q. Yes?

28 A. And they stayed open during the bank strike and they

29 gave, you know, a very good services.

13
 1 65 Q. Yes. Did you meet Mr. Traynor?

2 A. I met Mr. Traynor, I would say maybe seven or eight

3 times over the years, just to shake hands and say

4 hello.

5 66 Q. Who then was your main contact in Guinness & Mahon?

6 A. The main contact would have been Maurice 0'Kelly.

7 67 Q. Yes?

8 A. And then it kind of varied. In the early stages it

9 was certainly Maurice O'Kelly.

10 68 Q. Yes?

11 A. Whom I got to know very well.

12 69 Q. Yes?

13 A. And then at a later stage also Martin Keane.

14 70 Q. Yes?

15 A. And then there were a few names, one was a chap in

16 the Foreign Exchange Department with whom I had a

17 fair few dealings called Scully.

18 71 Q. Yes?

19 A. But that was very much a phone business and that was

20 about it.

21 72 Q. Did you meet Mr. Collery at all?

22 A. No.

23 73 Q. Mr. Traynor then you would have only met over the

24 years a number of times, a few times?

25 A. I don't think I ever had a full conversation with

26 him.

27 74 Q. Yes. Mr. McCann, if Stokes Kennedy Crowley then

28 were looking after your own personal affairs, in

29 relation to the matters that you referred to about

14
 1 Paris Investments?

2 A. Yes .

3 75 Q. And the steps that were then taken?

4 A. Sure.

5 76 Q. In relation to tax avoidance schemes that were being

6 operated, that was on the advice of Stokes Kennedy

7 Crowley?

8 A. That was on the advice of Stokes Kennedy Crowley I

9 believe.

10 77 Q. Yes. Who in Stokes Kennedy Crowley were you

11 discussing these affairs with?

12 A. Now, the involved people there I believe were

13 Alex Spain at some stage and John Callaghan at

14 another stage.

15 78 Q. Yes?

16 A. And maybe, you know, various people at a lower level

17 but I believe it was Alex Spain and John Callaghan.

18 79 Q. What about Mr. Reid, Mr. Don Reid?

19 A. Mr. Reid, sorry, Mr. Don Reid, yes.

20 80 Q. Yes?

21 A. It wasn't very much with him but I do know that he

22 appeared at some stage.

23 81 Q. Yes?

24 A. Just, I should also say, that at that time I mean I

25 was a kind of a hands on person dealing with all

26 aspects of the business.

27 82 Q. Yes?

28 A. And I wasn't familiar with what was happening in

29 wherever, in Bermuda, and eventually Paris and so

 1 on. I was probably kept in the picture but I wasn't

2 really, you know in the driving seat, as it were,

3 because I was running all the rest of the business.

4 We were growing and there was, you know -- people

5 were working terribly hard and so on.

6 83 Q. Yes?

7 A. But in any event I have gleaned a lot in the last

8 few months of what, you know, was happening.

9 84 Q. Did...(INTERJECTION)?

10 A. I wasn't entirely in the dark either.

11 85 Q. Did you go into Stokes Kennedy Crowley and see

12 Mr. Spain and Mr. Reid?

13 A. I see a reference in these papers here, it was

14 suggesting having a meeting with myself and then I

15 saw another -- I think there was -- one of the

16 letters was copied to me. I think Alex Spain's

17 letter was copied to me but I notice the following

18 letters -- sorry, pardon me. The following letters

19 were not copied to me.

20 86 Q. Yes?

21 A. As I say I am familiar now with what had been

22 happening.

23 87 Q. I see a reference in the correspondance to a

24 Ms. Spain?

25 A. Yes .

26 88 Q. Who is your Financial Director?

27 A. Yes .

28 89 Q. Was she then related to Alex Spain?

29 A. A sister.
 1 90 Q. Was she an accountant herself?

2 A. She is a qualified accountant.

3 91 Q. Would she have been involved, do you think, with

4 Mr. Alex Spain in these arrangements?

5 A. She was involved, yes.

6 92 Q. Yes?

7 A. Yes. She was a very competent lady.

8 93 Q. Yes?

9 A. And a very what would you say, you know, meticulous

10 and a person of the highest integrity.

11 94 Q. Then she would have been a person that would have

12 been involved then in these tax planning proposals

13 that were being discussed?

14 A. Yes .

15 95 Q. Yes?

16 A. Yes .

17 96 Q. Perhaps, more than you were?

18 A. I would say more than I was but having said that I

19 mean the responsibility would clearly have been

20 mine.

21 97 Q. Ms. Spain is she alive? Is she able to give

22 evidence?

23 A. She is alive. Well, if you ask me that question I

24 would say there is a question mark. Ms. Spain at

25 that stage was under an awful lot of pressure

26 because she was a very scrupulous person and she was

27 overwhelmed with work and I think I was at fault for

28 that but in 1979 or that period, 1979/1980, she was

29 quite ill and it was on and off. I mean I assume --

 1 am I talking in-house.

2 98 Q. Yes, or course?

3 A. Yes.

4 99 Q. This is absolutely confidential?

5 A. Right, yes.

6 100 Q. Yes?

7 A. Well, anyway she had severe bouts of depression at

8 that stage.

9 101 Q. Yes?

10 A. And eventually I think in 1979/1980 she had a long

11 period in hospital. She came back to the business

12 for a while but eventually she retired early in 1982

13 or 1983 or thereabouts. I am not sure about dates.

14 102 Q. Yes?

15 A. But she had a very bad time and probably the

16 pressures of mergers and public companies, off shore

17 accounts and, you know, maybe lack of consideration

18 on my part in not providing her with proper people

19 and that to back her up, but she was very much

20 involved.

21 103 Q. She was involved then but, you say, she retired

22 early?

23 A. Yes.

24 104 Q. She went into ill health?

25 A. Yes.

26 105 Q. And she retired early then?

27 A. Yes.

28 106 Q. Had she been out of the business ever since?

29 A. That must be the best part of about 17 or 18 years

18
 1 ago.

2 107 Q. Yes?

3 A. She has been out of the business since except that

4 she does some little bit. I mean she is officially

5 retired but she takes care at the same time.

6 108 Q. Did you consider asking her about this question of

7 this trust, that we will come to now in a moment?

8 A. Yes.

9 109 Q. And your letter concerning it?

10 A. At first I was very nervous of speaking to her at

11 all in case I might trigger off a repeat.

12 110 Q. Yes?

13 A. Or a return of the illness.

14 111 Q. Yes?

15 A. But some of the other people in our place have

16 spoken to her.

17 112 Q. Yes?

18 A. I have spoken to her.

19 113 Q. Yes?

20 A. But in a very limited way.

21 114 Q. Yes?

22 A. I gather that she has a fairly clear picture.

23 115 Q. I see?

24 A. Of what went on.

25 116 Q. Yes. I would like to come to this letter that you

26 wrote to the Cayman company. It is page 26 of our

27 documents (Exhibit 2) (Same Handed)?

28 A. You are marvelous. Thank you very much. Yes.

29 117 Q. Was that your personal, your private, address,

19
 1 "Miltown Grange, Castlebellingham"?

2 A. Yes .

3 118 Q. The copy of the letter that we have is undated. Can

4 you explain that?

5 A. I can't. In fact I can't explain anything about

6 this letter.

7 119 Q. I will come to that in a moment, Mr. McCann?

8 A. Sorry.

9 120 Q. However, I am just wondering -- we have been given,

10 we all presume, a photocopy and it seems to be a

11 photocopy of a copy of a letter. However, do you

12 now whether the original copy is undated or not?

13 A. Yes, undated.

14 121 Q. It is undated?

15 A. Undated.

16 122 Q. The document you got was undated?

17 A. Yes .

18 123 Q. Before we go into this document I want you to tell

19 me how you came across this document?

20 A. Well, when I got the letter from yourselves.

21 124 Q. Yes?

22 A. About the enquiry.

23 125 Q. Yes?

24 A. I was staggered. Anyway having said that we

25 immediately appointed a team of three people, the

26 Finance Director Mr. Gernon and Mrs. Ghose, who

27 manages my personal affairs and also she is a

28 Taxation Manager for the company, and also a man

29 called John Hennessy, who was a partner in Arthur

20
 1 Anderson and is now practicing at the Bar. They

2 have done very little else for the last two months

3 but try and get, try and build, up the information

4 on what went on over these years.

5 126 Q. Yes?

6 A. And it is a lot of work and I must say that most of

7 the people that we approached were more than helpful

8 in making files available and any information.

9 127 Q. Yes?

10 A. And I think, trawling through the SKC files, they

11 found this letter (Exhibit 2).

12 128 Q. Yes. When you say "they" do you mean either

13 Mr. Gernon, Mrs. Ghose or Mr. Hennessy?

14 A. Yes .

15 129 Q. They found the letter?

16 A. Yes, in SKC.

17 130 Q. You must have contacted Stokes Kennedy Crowley to

18 ask permission?

19 A. We did.

20 131 Q. Who did you contact in Stokes Kennedy Crowley?

21 A. I just don't know that, who was contacted, but I

22 know at various -- I spoke to Alex Spain myself at

23 some stage.

24 132 Q. Yes?

25 A. I spoke to Don Reid at another stage.

26 133 Q. Yes?

27 A. And I gather that some members of that team, maybe

28 Mrs. Ghose, who had worked for years in SKC,

29 approached other people -- Don Reid and Alex Spain

21
 1 have left the company or the partnership at this

2 stage.

3 134 Q. Yes?

4 A. And also John Callaghan but various members of

5 that group spoke to those other people. I spoke to

6 Mr. Sean Mooney as well.

7 135 Q. Who is Mr. Mooney?

8 A. Mr. Mooney is the taxation man in SKC.

9 136 Q. I am just wondering, SKC must have searched their

10 files?

11 A. Yes.

12 137 Q. Their records?

13 A. Sure.

14 138 Q. For documents?

15 A. Yes.

16 139 Q. I am just wondering who in SKC would have done this?

17 Who would have undertaken this task? Were you in

18 touch with the Managing Partner of SKC or who were

19 you in touch with do you know?

20 A. Well, I know I was in touch with, as I say,

21 Alex Spain.

22 140 Q. However, they are retired now?

23 A. Yes, they are retired.

24 141 Q. Yes?

25 A. I was also in touch with Sean Murphy.

26 142 Q. What... (INTERJECTION)?

27 A. And he would have made approaches to other members.

28 143 Q. Yes?

29 A. But I can find out very quickly and very easily.

22
 1 144 Q. Who actually...(INTERJECTION)?

2 A. Who opened the file.

3 145 Q. Yes. Then as a result of this one letter?

4 A. Sure.

5 146 Q. Has been given to you?

6 A. Yes.

7 147 Q. Were you given any other letters?

8 A. I think other letters, I mean of the dealings with

9 ourselves and SKC, were available to us but there

10 was nothing pertinent.

11 148 Q. Yes?

12 A. That our people deemed pertinent.

13 14 9 Q. Were you given any correspondance that SKC may have

14 had with Cayman?

15 A. I think if that had been there it would have --

16 sorry, with Cayman.

17 150 Q. Yes?

18 A. Anything we got from...(INTERJECTION).

19 151 Q. Can you remember now, Mr. McCann?

20 A. No, no. I can tell you that whatever we got from

21 SKC has been sent to you.

22 152 Q. I wonder is that right? I mean have you given us

23 every piece of paper that SKC gave you?

24 A. Everything -- I will put it another way, everything

25 that we deemed was part of your requirement here.

26 153 Q. Yes. What I am concerned about?

27 A. Yes.

28 154 Q. Is that we have no correspondence that

29 Stokes Kennedy Crowley may have had with

23
 1 Guinness Mahon Cayman Trust?

2 A. Sure.

3 155 Q. It would seem to me very likely that such

4 correspondence must have taken place?

5 A. Well, you know, it may be. I don't know.

6 156 Q. Yes?

7 A. Yes.

8 157 Q. I take it Mr. McCann you can make enquiries?

9 A. Absolutely.

10 158 Q. Yes?

11 A. Yes.

12 159 Q. This is the only document then (Exhibit 2)?

13 A. Yes.

14 160 Q. That you have been given by Stokes Kennedy Crowley

15 that they have been able to find in relation to a

16 possible trust?

17 A. Sure.

18 161 Q. Yes?

19 A. I believe that is absolutely correct.

20 162 Q. It appears to be your address on the top of it?

21 A. Sure.

22 163 Q. It is not a Stokes Kennedy Crowley letter?

23 A. Right.

24 164 Q. It is in their possession?

25 A. Yes.

26 165 Q. Did you keep any correspondence in your home in

27 relation to your financial matters?

28 A. I think not really. I mean from time to time I

29 would have stuff at home and that. I might have

24
 1 some old diaries and that but no.

2 166 Q. Did you?

3 A. No, the answer is no.

4 167 Q. If a trust or something like that had been created,

5 in which you personally were involved, you would not

6 have kept the documents? You would have left them

7 with your accountant. The accountant would have

8 dealt with them?

9 A. Well, no. I kept fairly good files in the office.

10 168 Q. Yes?

11 A. Now, they mightn't be very sophisticated but I would

12 have kept most important things.

13 169 Q. Yes. Your own personal affairs?

14 A. Yes.

15 170 Q. Have you looked...(INTERJECTION)?

16 A. I have always -- sorry?

17 171 Q. Sorry?

18 A. I was going to say I have always -- I have had the

19 benefit for over 30 years of having a qualified

20 person's service available to manage the things.

21 172 Q. Have you looked in your own personal files?

22 A. Absolutely, I have been through files up and down.

23 173 Q. Have you any files going back to the period, to the

24 early 1970s?

25 A. There are bits and pieces of things but there is

26 certainly nothing with this thing here.

27 174 Q. Yes.

28 A. And, you know, while there might have been so many

29 things happening at various stages, you know, with

25
 1 acquisitions of companies and developing and so on,

2 that I wouldn't remember a connection with the

3 company.

4 175 Q. Yes?

5 A. But the idea of setting up anything apart from

6 The Bank Of Ireland trusts, you know, on the local,

7 on the Irish, scene, I -- okay, you can't remember

8 so many things but I think I would remember that to

9 do with the family.

10 176 Q. The Bank of Ireland set up trusts for you?

11 A. Yes.

12 177 Q. Were these discretionary trusts?

13 A. Yes.

14 178 Q. You were familiar with the concept of discretionary

15 trusts?

16 A. Yes.

17 179 Q. Yes?

18 A. I wasn't familiar with all the different companies

19 they have on the chart coming down.

20 180 Q. Yes?

21 A. But I was... (INTERJECTION) .

22 181 Q. However, you were familiar with the concept of

23 discretionary trust, that the trustees have a

24 discretion?

25 A. Sure.

26 182 Q. To give the benefit?

27 A. Yes.

28 183 Q. That they are in?

29 A. Yes.

26
 1 184 Q. The funds in the trust to a group of people?

2 A. Absolutely.

3 185 Q. And have a discretion?

4 A. Yes.

5 186 Q. Are you familiar with the concept of a letter of

6 wishes?

7 A. Yes.

8 187 Q. That the Settlor?

9 A. Yes.

10 188 Q. Would give a letter of wishes?

11 A. Yes.

12 189 Q. And that in the normal course of events the Settlor

13 would expect the trustees to comply with the Letter

14 of Wishes?

15 A. Absolutely, yes.

16 190 Q. You are familiar with that concept?

17 A. Yes, yes.

18 191 Q. Would you just take the letter for a moment here.

19 Do you see that it is addressed to the Directors of

20 Guinness Mahon Cayman Trust Limited, with an address

21 in the West Indies?

22 A. Yes.

23 192 Q. Did you know about Guinness Mahon Cayman Trust?

24 A. No, I wasn't familiar with that at all.

25 193 Q. Perhaps I did not put the question properly or

26 fairly to you, because you did become familiar with

27 Guinness Mahon Cayman Trust Limited, did you not, in

28 relation to the scheme with Paris Investment?

29 A. Well, I should say clearly -- going back to those

27
 1 years, and trying to go back to those years in my

2 mind, I had no knowledge of Guinness Mahon Cayman

3 Trust. I had no knowledge of the detail of what was

4 to be done. I knew we were doing something in

5 Bermuda and afterwards something in Cayman but I had

6 no -- I wouldn't have known the refinement of

7 Guinness Mahon Cayman or whatever the different

8 names of that company was.

9 194 Q. Did you not know, in fact you told us in your

10 statement, that Guinness Mahon Cayman Trust Limited

11 owned the shares in Paris Investment's?

12 A. May I look at this?

13 195 Q. Sure, yes. If you look at page 4 of your statement?

14 Have you got page 4 of your statement (Exhibit 1)?

15 A. Yes .

16 196 Q. Yes. Do you see Fruit Importers...(INTERJECTION)?

17 A. On this, yes, sorry.

18 197 Q. Do you see Fruit Importers of Ireland Limited? You

19 see the second paragraph:

20 "The company held the shares in Paris

Investments Limited in trust for the
21 shareholders of FII"?

22

23 A. Yes, the company.

24 198 Q. Is that right?

25 A. Yes, I follow.

26 199 Q. What I am pointing out to you Mr. McCann is that you

27 must have been aware of the existence of this Cayman

28 company, Guinness Mahon Cayman Trust Limited?

29 A. I am sorry I think where I am confused is that I

28
 1 notice I have a little chart here and I have a line

2 from FII, you know, down to Paris, and then I have

3 Cayman marked outside here as

4 being...(INTERJECTION).

5 200 Q. Look...(INTERJECTION)?

6 A. Of the Cayman company, yes.

7 201 Q. Yes. If you look at the very beginning? Turn to

8 the very first page of your letter?

9 A. Yes, yes.

10 202 Q.
"As requested I set out below a
11 statement of all of my dealings whether
direct or indirect with Ansbacher
12 (Cayman) Limited formerly known as
Guinness Mahon Cayman Trust Limited,
13 Ansbacher Limited and Cayman
International Bank and Trust
14 Company Limited (the Company)."

15

16 In your letter the company is referred to?

17 A. Referred to.

18 203 Q. As to what we have been calling "Ansbacher"?

19 A. Yes.

20 204 Q. Or in those days it was known as Guinness Mahon

21 Cayman Trust?

22 A. Right, yes. I think I have lost my way, Justice.

23 205 Q. What I am coming back to, if you come back to page 4

24 (Exhibit 1)?

25 A. Yes.

26 206 Q. Under "Fruit Importers Of Ireland Limited" it says:

27 "The company held the shares in Paris

Investments Limited in trust for the
28 shareholders of FII"?

29

29
 1 A. Right.

2 207 Q. What I am asking you Mr. McCann is: Does it not

3 appear that you must have been aware of the

4 existence of Guinness Mahon Cayman Trust at the time

5 that this tax planning was undertaken?

6 A. No, because my memory going back to all of this is

7 that I was not familiar with those things but I have

8 become familiar with them in the trawling that has

9 gone on.

10 208 Q. Yes?

11 A. But at that stage it was just very much a thing of

12 we were doing something with Bermuda and at a later

13 stage we were doing something with Cayman, and I

14 think the knowledge that it was Paris or whatever,

15 or IFS and what have you.

16 209 Q. Did you...(INTERJECTION)?

17 A. That is recent for me.

18 210 Q. Yes?

19 A. Recent knowledge.

20 211 Q. Very well. However, when you say you were doing

21 something in Bermuda and doing something in Cayman?

22 A. Yes .

23 212 Q. Do you mean that you were moving funds there and

24 they were involved in the tax planning that was

25 being undertaken?

26 A. Yes, absolutely.

27 213 Q. Did you know that you were doing something in Cayman

28 with a subsidiary of Guinness & Mahon in Dublin?

29 A. It was something which Guinness & Mahon Dublin were

30
 1 involved.

2 214 Q. Yes?

3 A. But as regards the details of it at that time I

4 didn't know.

5 215 Q. What do you mean that they were involved?

6 A. Well, they were either advising or helping to advise

7 maybe SKC.

8 216 Q. Did you not know that, in fact, you were

9 transferring funds or getting involved with a

10 company in the Cayman Islands?

11 A. Sure.

12 217 Q. Which was a subsidiary of Guinness Mahon in Ireland,

13 in Dublin?

14 A. Well, I am not so sure of that because I was sure of

15 the fact that SKC, in whom we had the utmost

16 confidence, and possibly to a lesser extent

17 Guinness Mahon, were helping to set up something.

18 218 Q. Yes?

19 A. To do with off shore business in...(INTERJECTION).

20 219 Q. In the Cayman?

21 A. In the Cayman.

22 220 Q. Yes?

23 A. Yes.

24 221 Q. Well...(INTERJECTION)?

25 A. But beyond that I wouldn't have known a name or a

26 detail about it.

27 222 Q. You must have known the amounts of funds?

28 A. No.

29 223 Q. That were transferred, did you?

31
 1 A. No.

2 224 Q. You did not?

3 A. I imagine at some stage as the cash, you know, would

4 have come through, or as things would have come

5 through, there might have been information passing

6 through the FII company accounts. There would have

7 been something there for me to see but none of that

8 registers.

9 225 Q. Now, is that it?

10 A. It registers now because I have been through it all.

11 226 Q. Yes. However, you had forgotten, until this was

12 brought to your memory you had forgotten?

13 A. Yes. I mean it was quite a shock that this came in.

14 227 Q. Very good. Yes. Let us look at this in some

15 detail?

16 A. Yes.

17 228 Q. It is a letter addressed to the company in Cayman?

18 A. I am sorry. Yes, yes, sorry, yes.

19 229 Q. You say that you now know about the Guinness Mahon

20 Cayman Trust Limited. Does it not appear that if

21 you wrote the letter, this letter, that you would

22 have then known the address or alternatively that

23 this letter was drafted by someone for your

24 signature, and that the person who drafted it would

25 have known the address?

26 A. Justice, can I say to you very clearly.

27 230 Q. Yes?

28 A. This letter is absolutely news to me, from the day

29 it came back from the files of SKC.

32
 1 231 Q. Yes?

2 A. And nothing that I have been told since helps to

3 make me think otherwise.

4 232 Q. Let us just look at the terms of the letter (Exhibit

5 2) ?

6 A. Yes.

7 233 Q. It reads:

8 "I refer to a Deed of Settlement dated

31st March, 1972, whereby John Andrew
9 Furze appointed Guinness and Mahon
Cayman Trust Limited as Trustees of a
10 Settlement for the benefit of the
issue of the late Charles McCann
11 and Rosetta McCann."

12

13 They are your father and mother?

14 A. Yes, yes.

15 234 Q. It refers to a Deed of Settlement of the 31st March?

16 A. Yes.

17 235 Q. Have you made enquiries about this?

18 A. Absolutely, and I have spoken particularly to the

19 people at SKC and the view -- there is a view there

20 that Mr. Mooney would say he vaguely remembers

21 something about that but he says if he did and if

22 there was such a thing being mooted it never was

23 implemented.

24 236 Q. Mr. Mooney?

25 A. Mr. Mooney.

26 237 Q. Mr. Mooney is Sean Mooney, is that right?

27 A. Mr. Sean Mooney.

28 238 Q. You have mentioned?

29 A. The taxation partner.

33
 1 239 Q. Was he in the firm in 1972?

2 A. He must have been, yes.

3 240 Q. Yes. What about Mr. Alex Spain?

4 A. Alex Spain was very much involved. I see from the

5 correspondence was very much involved early on but I

6 think after that he kind of went off the scene.

7 241 Q. Did you ask him did he remember anything about this?

8 A. Well, when I saw Alex Spain I hadn't seen this.

9 242 Q. So you have not asked him since?

10 A. No.

11 243 Q. Yes?

12 A. But he said to me at that stage, "Look, I can

13 remember nothing about what went on at the time."

14 244 Q. Yes?

15 A. "I do know we set up trusts," he said, "in Bermuda

16 and Cayman until they were no longer legal or

17 legitimate."

18 245 Q. He told he that they did set up trusts?

19 A. This was for, yes, in accordance with that letter.

20 You know the letter that came in recently to you,

21 the most recent letter?

22 246 Q. Mr. Spain told you that he had set up trusts until

23 they became illegal?

24 A. I am sorry I put it the wrong way. He set up

25 companies in Cayman, in Bermuda and Cayman.

26 247 Q. You have not shown him this letter (Exhibit 2)?

27 A. No.

28 248 Q. Have you shown this to Don Reid, this letter?

29 A. Yes.

34
 1 249 Q. Does he remember it?

2 A. No.

3 250 Q. Yes?

4 A. And I had certainly a very serious discussion with

5 Mr. Mooney and he is the only one that says that it

6 is any way familiar to him but...(INTERJECTION).

7 251 Q. You see I should explain to you Mr. McCann, you may

8 not know it, but what is said in this letter?

9 A. Yes.

10 252 Q. Has been, on the information we have got, quite a

11 common way of setting up trusts?

12 A. Sure.

13 253 Q. Which Stokes Kennedy Crowley were engaged in at this

14 stage?

15 A. Right.

16 254 Q. It seems to mirror exactly what they did in other

17 cases that we have come across?

18 A. Sure, I hear you.

19 255 Q. What I am wondering is who could help us if your

20 memory is such that you do not remember this?

21 A. Right.

22 256 Q. Who could help us? You think Mr. Mooney could

23 help us?

24 A. I think Mr. Mooney could help.

25 257 Q. Do you think Mr. Spain could help us?

26 A. Yes, but I believe absolutely -- I believe that no

27 trust of any kind of that nature was formed or that

28 anything came into it or out of it.

29 258 Q. Yes?

35
 1 A. And I don't think, there is a few things to do with

2 the family.

3 259 Q. Yes?

4 A. That I could be mistaken in that.

5 260 Q. If we just look at the letter (Exhibit 2)? It goes

6 on:

7 "In their capacity as Trustees,

Guinness & Mahon Cayman Trust Limited,
8 through their nominees own the entire
issued share capital of Blue Limited"?
9

10 A. Yes .

11 261 Q. The letter goes on then:

12 "I hereby authorise you to transfer at

par to Neil Collins or his nominee the
13 entire issued share capital of
Blue Limited."
14

15 A. Yes .

16 262 Q. Do you know who Neil Collins?

17 A. I know Neil Collins, yes.

18 263 Q. Who is he?

19 A. Neil Collins is -- well, he is an individual in

20 Cork, a businessman in Cork, who was very active in

21 business some years ago.

22 264 Q. Yes?

23 A. The reason why his name is perhaps -- well, wait

24 until we see Neil Collins -- any involvement I had

25 was at some stage I had a share in a property in

26 Dundalk in partnership with two other people and I

27 opted out of it and my shares -- I was paid for my

28 shares and I understood afterwards -- I had never

29 spoken to him about that but I understood afterwards

36
 1 that Mr. Collins took my place as the shareholder,

2 or partner, or whatever in that property company.

3 265 Q. Yes?

4 A. But I didn't have any dealings with him and my

5 dealings were purely with the two other

6 shareholders.

7 266 Q. How is that relevant to this letter?

8 A. Because you asked me about Neil Collins.

9 267 Q. Yes?

10 A. And the association.

11 268 Q. Yes?

12 A. And that is the only time I knew anything about

13 Neil Collins.

14 269 Q. How would you be authorising the transfer of shares

15 to Neil Collins?

16 A. I don't believe I did anything of the sort. As to

17 whether you want me to speculate I could say well If

18 Collins replaced me...(INTERJECTION)?

19 270 Q. No. I do not want you to speculate, Mr. McCann?

20 A. No, but that... (INTERJECTION) .

21 271 Q. Because what I understand is that you have no

22 recollection of this?

23 A. No, no.

24 272 Q. I am just wondering however this letter was written,

25 how it came about that you were authorising the

26 transfer of the shares to Neil Collins?

27 A. I don't believe that I did.

28 273 Q. Is there any other Neil Collins that this could be?

29 A. No, no. I am quite sure that is the person and this

37
 1 may have been intended to be done in some way or

2 another but certainly I have no recollection

3 whatever of this authorisation.

4 274 Q. Yes. Perhaps, you might tell me about this

5 arrangement with Mr. Collins? Did you knew him

6 personally?

7 A. No, I heard of him. I met him once afterwards I

8 think, again only "Hello, nice day".

9 275 Q. You had no -- you had no...(INTERJECTION)?

10 A. I knew he was.

11 276 Q. You knew who he was?

12 A. Yes.

13 277 Q. He was a Cork businessman?

14 A. And he was pretty well known.

15 278 Q. You must have been very surprised when you saw this

16 letter?

17 A. In the last few weeks, my Lord?

18 279 Q. Yes?

19 A. I was very surprised.

20 280 Q. When did you see this letter for the first time?

21 A. Well, it is since the trawl started.

22 281 Q. Yes?

23 A. So, it has to have been in the last four weeks or

24 so.

25 282 Q. Since you got our letter?

26 A. Yes, yes.

27 283 Q. In December?

28 A. Yes, absolutely, as a result of.

29 284 Q. Yes. Did you contact Mr. Collins?

38
 1 A. No, because I had no dealings with him.

2 285 Q. Just tell me, you have indicated to me that

3 Mr. Collins may have taken your place as partner in

4 some business venture?

5 A. In Dundalk.

6 i Q.
2 36 In Dundalk?

7 A. Yes .

8 2 37
i Q. However, that is a very remote connection with

9 Mr. Collins, is it not?

10 A. Very remote.

11 288 Q. You would not have met him?

12 A. No.

13 i Q.
2 39 Did you know that there was a Mr. John Collins

14 who was Managing Director of Guinness Mahon

15 Cayman Trust Limited?

16 A. No.

17 290 Q. You did not know that?

18 A. No, no. I never heard of him. I didn't know any

19 people in this Cayman Trust.

20 291 Q. There is just one other matter I want to refer to in

21 this letter, the last paragraph goes on:

22
"I hereby authorise you to transfer at
23 par to Neil Collins or his nominee the
entire issued share capital of
24 Blue Limited."

25

26 Does that not indicate Mr. McCann, from the way in

27 which that is worded, that you had authority to tell

28 the Trustees to transfer?

29 A. Yes .
 1 292 Q. To Mr. Collins the share capital?

2 A. It would appear to but, you know, I never saw that

3 letter.

4 293 Q. I understand?

5 A. Or that draft.

6 294 Q. Yes?

7 A. Or I don't know of anybody else who has.

8 295 Q. Yes?

9 A. I don't believe any of it happened.

10 296 Q. Yes. However, if you had authority it would

11 mean that the Trustees must have appointed, under

12 the Deed of Trust, the property in the trust to you

13 in order to give you...(INTERJECTION)?

14 A. If it was true.

15 297 Q. If it was true?

16 A. Yes.

17 298 Q. Very well. I want you to refer to page 64. It is

18 tab 15 (Exhibit 3) (Same Handed)?

19 A. Thank you.

20 299 Q. This is a record of resident and non-resident loans

21 of £5,000 and over, which has been obtained from the

22 records of Guinness & Mahon Ireland. You will see

23 on the left-hand side the customers and towards the

24 end, the fourth from the bottom:

25 "Fruit Importers of Ireland Limited."

26

27 Do you see that?

28 A. Yes.

29 300 Q. Do you see that it shows the present balance

40
 1 of £225,844?

2 A. Yes.

3 301 Q. Do you see under the column headed "Comments"

4 "Suitably secured."

6 Do you see that?

7 A. I do.

8 302 Q. Are you familiar Mr. McCann with the concept of cash

9 backed loans?

10 A. I am sorry Justice, am I familiar with the

11 concept of?

12 303 Q. The concept of cash backed loans?

13 A. Cash backed loans? Yes, I think so, yes.

14 304 Q. That the loan would be given in this case by the

15 bank and they would use as security a deposit?

16 A. Sure.

17 305 Q. For the same amount of the loan in fact?

18 A. Right.

19 306 Q. You are familiar with that?

20 A. Yeah, I am familiar with that, yes.

21 307 Q. I must inform you Mr. McCann that our information is

22 that where Guinness & Mahon Ireland refer to a

23 suitably secured loan that they mean a loan which is

24 cash backed by a deposit?

25 A. Yes.

26 308 Q. It would appear therefore that your company had a

27 very substantial loan or overdraft, it is not clear

28 which, and that it was secured by a deposit with the

29 company, is that not so?

41
 1 A. Well, I read it here.

2 309 Q. You read it there?

3 A. But... (INTERJECTION) .

4 310 Q. Yes. I take it that you have no recollection of it?

5 A. No.

6 311 Q. Do you see again it is your information that people

7 who had established trusts were enabled to use the

8 deposit in Guinness Mahon Cayman Trust, which that

9 Cayman company had in Guinness & Mahon in Ireland,

10 as a security. You see that in the letter?

11 A. Yes. I am sorry Judge am I missing something? I do

12 not see -- is there a date.

13 312 Q. The date, the repayment date, is the best we can

14 give?

15 A. Yes, March 1973.

16 313 Q. 31st March 1973?

17 A. Yes, yes.

18 314 Q. There is a very substantial deposit apparently being

19 used to secure that loan?

20 A. Yes.

21 315 Q. Have you any explanation for...(INTERJECTION)?

22 A. Well, I just am not familiar with it.

23 316 Q. You are not familiar with it?

24 A. No.

25 317 Q. Perhaps you might try to see?

26 A. Yes.

27 318 Q. If you can get any information about it?

28 A. If I may take a copy?

29 319 Q. You may take it, yes. We have kept out the other

42
 1 information?

2 A. Okay.

3 320 Q. Of other people in other companies?

4 A. So, we will pursue that one.

5 321 Q. If you can pursue that one, yes?

6 A. Yes .

7 322 Q. We also have information that there was a

8 management report in the 1974 to the effect

9 that there was a suitably secured loan to your

10 company of £96,000. That is in the management

11 report of 31st October 1974. Can you see if

12 you can get any information on that?

13 A. I will. I would be very happy to, Justice.

14 323 Q. Mr. McCann, we do take a coffee break. I was just

15 wondering if this would be a suitable time for a

16 coffee break?

17 A. That is a very nice idea.

18 324 Q. Very well then. We will say about ten minutes or

19 so?

20 A. Yes .

21

22 SHORT ADJOURNMENT

23

24 A. Apologies Judge.

25 325 Q. No, that is fine Mr. McCann. We will continue then

26 Mr. McCann?

27 A. Yes .

28 326 Q. I was just asking you about your relations with

29 Mr. Collins?
 1 A. Yes.

2 327 Q. The people that you had the arrangement with or you

3 were in business with in Dundalk; what were their

4 names, Mr. McCann?

5 A. Alex Spain was one.

6 328 Q. Yes?

7 A. And Philip Monahan was another.

8 329 Q. Yes. Was your place taken in that by Mr. Collins?

9 A. I believe so.

10 330 Q. You believe so?

11 A. Yes.

12 331 Q. Was that a property development or what was it?

13 A. It was a property development. There had been, you

14 know, bits of property involved in the thing and a

15 particular development they were going to do and I

16 didn't feel comfortable and I said that I would like

17 to opt out.

18 332 Q. Yes?

19 A. And they produced.

20 333 Q. Mr. Collins?

21 A. Yes, I believe.

22 334 Q. Yes. Would you have any objection to our writing to

23 Mr. Collins to get his evidence in this connection?

24 A. Absolutely not.

25 335 Q. Very well. I want to deal with another matter now

26 about Fruit Importers of Ireland Limited?

27 A. Yes.

28 336 Q. It appears that Fruit Importers of Ireland Limited

29 had a deposit in Cayman, in Guinness Mahon Cayman

44
 1 Trust?

2 A. I am not sure where we are, Judge.

3 337 Q. I think it may refresh your memory if we turn to

4 page 48, the telex to Mr. Keane. Have you got the

5 telex of the 14th October 1977 (Same Handed)?

6 A. Yes, I have.

7 338 Q. You knew Mr. Martin Keane?

8 A. Yes.

9 339 Q. Would you have dealings with him?

10 A. Yes, yes.

11 340 Q. You never met Mr. John Furze?

12 A. No.

13 341 Q. Did you know of Mr. Furze's existence until

14 the recent developments that have been in the

15 public domain?

16 A. No.

17 342 Q. You did not?

18 A. No.

19 343 Q. You have seen this telex I take it (Exhibit 4)?

20 A. Yes.

21 344 Q. Does it not appear from that that FII had a deposit

22 of $29,927?

23 A. Yes, it appears that way.

24 345 Q. Have you any recollection of this?

25 A. No.

26 346 Q. You have not?

27 A. No.

28 347 Q. You have read this document?

29 A. Yes.

45
 1 348 Q. It dose appear that this was an instruction, was it

2 not, given my Mr. Furze on behalf of the Guinness

3 Mahon Cayman Trust which had an account in Dublin,

4 and out of this sum, this FII deposit, you were to

5 be paid two drafts?

6 A. I mean since I saw this I mean I have racked my

7 brains. I have looked through old diaries. I have

8 looked through everywhere in my own files and just

9 -- it bugs me. There is nothing I can recall about

10 this and as I said I know Martin Keane. I never

11 heard of the other man and none of this rings any

12 bells, just nothing.

13 349 Q. Is it not clear that you are receiving from the

14 account of Guinness Mahon Cayman Trust in

15 Guinness & Mahon in Dublin this sum of money?

16 A. Well, its certainly -- the internal memo is there

17 and it appears from that that there was an

18 arrangement to do that but I can't throw any light

19 on it Judge and as I said...(INTERJECTION).

20 350 Q. We have, and I will show you, the sundary

21 sub-company account and it is a bad photostat but

22 you will able to make out the -- (Exhibit 5)(Same

23 Handed)?

24 A. Yes. Thank you.

25 351 Q. If you see the payment to Fruit Importers of this

26 figure of £2,166?

27 A. Yes.

28 352 Q. You will then see on the right-hand side the balance

29 that was left and now unfortunately the photostat

46
 1 has not come out in relation to the figure that

2 shows the balance on the right-hand side, there

3 is £33,000 and the other balance. However, the

4 arithmetic of the situation shows that the balance

5 that was left amounts to the figure, that is

6 referred to in this Telex, of £14,655?

7 A. Yes.

8 353 Q. What I am indicating to you is that the money came

9 out?

10 A. Right.

11 354 Q. Of the account?

12 A. Right.

13 355 Q. That Guinness Mahon Cayman Trust Limited had in

14 Dublin, have you any doubt about this?

15 A. Well, I mean that looks fairly strong.

16 356 Q. Yes. Well...(INTERJECTION)?

17 A. I can't see the date of the money coming out.

18 357 Q. No, the photostat is very bad. I agree with you

19 Mr. McCann it is very hard to make it out?

20 A. I see the date now.

21 358 Q. However, the date is there. It is 1977?

22 A. It is October.

23 359 Q. It is 13th October 1977?

24 A. Yes. This one here is -- yes, yes, yes. I just

25 have, you know -- I have no memory of it.

26 360 Q. Yes. Let us assume that the record shows this

27 payment?

28 A. Sure.

29 361 Q. Can you explain how you came to be paid money which

47
 1 apparently was on deposit in the name of FAI in

2 Cayman Islands?

3 A. Well, I mean if I am speculating, you know, perhaps

4 -- I just don't know.

5 362 Q. Very well.

6 A. I don't know.

7 363 Q. I want now to turn to The International Fruit Agents

8 Limited?

9 A. Right, Judge.

10 364 Q. If you would like to look at your statement to

11 refresh your memory on it?

12 A. Yes.

13 365 Q. It was incorporated in the year ending the

14 31st October 1972?

15 A. Yes.

16 366 Q. It is listed as a subsidiary of FII in its accounts,

17 is that not right?

18 A. Yes, yes.

19 367 Q. The documents, which I will put to you in a moment,

20 show that its address was C/O Guinness Mahon

21 Cayman Trust. Did you know that?

22 A. No.

23 368 Q. You tell us that it was sold in March 1974 to a

24 company called Montagu Insurance Company. Would

25 you just look at this, it is Exhibit 5 of your

26 documents (Same Handed)?

27 A. Right. You are very good. Thank you very much.

28 Yes.

29 369 Q. You see this is dated 24th March 1974. It is

48
 1 between Fruit Importers Of Ireland Limited

2 and Montagu Insurance Limited of an address in

3 Grand Cayman?

4 A. Yes .

5 370 Q. It is an agreement by which FII agreed to

6 sell the equity in a firm called International Fruit

7 Agents Limited, 100 ordinary shares and the price

8 was apparently £110,800?

9 A. Yes .

10 371 Q. FII sold its shareholding in the company to

11 Montagu Insurance Limited by that document, is that

12 not so?

13 A. Yes .

14 372 Q. I want you to refer now to the documents on

15 pages 38 to 41 of our file. Ms. Cummins, they

16 are new accounts being opened (Exhibit 1)(Same

17 Handed)?

18 A. Thank you.

19 373 Q. Have you got these?

20 A. Yes .

21 374 Q. International -- it is slightly not quite in order

22 in my copy but let us look at what it is?

23 A. Yes .

24 375 Q. It is an authorisation to open a new account. The

25 name is International Fruit Agents and the address

26 is C/O GMCT, which is Guinness Mahon Cayman Trust?

27 A. Yes .

28 376 Q. The address of the International Fruit Agents is

29 Guinness Mahon Cayman Trust. It is a fixed deposit.

 1 The number of the account is hard to make out but it

2 is up there on the right-hand side?

3 A. Yes .

4 377 Q. It is in French Francs I think. It is from the

5 French Francs Ledger?

6 A. Yes .

7 378 Q. Would you turn over the next page?

8 A. Yes .

9 379 Q. It is again an authorisation to open a deposit

10 account. It is the 4th October 1978?

11 A. Yes .

12 380 Q. It is the International Fruit Agents Limited. The

13 account number is given and the amount of the

14 deposit is given in French Francs. It is nearly one

15 million French Francs?

16 A. Right.

17 381 Q. The next document is another authorisation to open

18 Deposit Account. The name of the company we have

19 mentioned. The address is C/O Guinness Mahon and it

20 is -- the amount of the deposit is half a million

21 French Francs?

22 A. Yes .

23 382 Q. The last document, that I want to refer to you, is

24 dated earlier. It is International Fruit Agents.

25 It is external fixed deposits in French Francs and

26 it is 23rd November 1976?

27 A. Yes .

28 383 Q. It shows, in fact, the balance there of French

29 Francs and apparently it was reduced to a small

50
 1 amount. I want to refer you now to your own

2 statement. See at page five of your own statement,

3 it is a continuation of the paragraph, which on the

4 previous paragraph refers to International Fruit

5 Agents Limited?

6 A. Sorry, yes, International Fruit Agents Limited on

7 page 4.

8 384 Q. Yes?

9 A. On the top of page five.

10 385 Q. I am on top of page 5 now. Look at the last

11 sentence in the paragraph?

12 A. Yes.

13 386 Q. It reads:

14 "I believe that..."

15

16 It is the second last sentence:

17 "I believe that FII was the beneficial

owner of the funds in these bank
18 accounts."

19

20 These bank accounts are referred to in the earlier

21 sentence:

22 "Notwithstanding the said sale it

appears that non-resident bank accounts
23 were maintained with the Bank in the
name of International Fruit Agents
24 from October 1976 to approximately
October 1980."
25

26 A. Yes.

27 387 Q. I want you to tell us how it came about that FII was

28 the beneficial owner of the funds in these bank

29 accounts?

51
 1 A. This is the company FIA that had been sold.

2 388 Q. Yes .

3 A. And then this happened.

4 389 Q. Yes?

5 A. Yes, I think -- I believe that this, you know -- it

6 puzzles us.

7 390 Q. Yes?

8 A. And I don't understand why or how IFA, you know,

9 continued, or the name would have ever continued,

10 after the thing had been sold and I think it just

11 looks -- it looks a mess from that period 1976 until

12 it was...(INTERJECTION).

13 391 Q. However, surely Mr. McCann just to say it looks a

14 mess isn't a proper explanation?

15 A. Sorry.

16 392 Q. For the situation?

17 A. Sorry.

18 393 Q. If you say and in your statement say they were

19 beneficially owned, how did FII beneficially own the

20 monies in these accounts?

21 A. I understand that, your know, the particular -- but

22 again this is not first-hand but I understand that

23 Ms. Spain dealing with that particular business was

24 absolutely aware of what monies were due to FII that

25 had not been transferred and eventually all of those

26 monies were transferred back into FII in Dublin.

27 394 Q. However, Mr. McCann if the documents reflect the

28 true situation?

29 A. Yes .

52
 1 395 Q. All the shares were sold and FII no longer had any

2 interest in this company?

3 A. Sure.

4 396 Q. What I want to know is why you say in your statement

5 that your company beneficially owned these sums in

6 the account?

7 A. I ... (INTERJECTION) .

8 397 Q. Yes?

9 A. Sorry, I was going to say I just don't understand.

10 398 Q. You do not understand?

11 A. Yes.

12 399 Q. I see?

13 A. May I consult for a moment?

14 400 Q. Yes, yes?

15 MR. O'KEEFFE: Can we step outside the door?

16 A. Yes, of course, yes.

17

18 SHORT ADJOURNMENT

19

20 A. Judge, I am sorry but...(INTERJECTION).

21 401 Q. No, I am sorry for rushing you, Mr. McCann?

22 A. No, you are not.

23 402 Q. What I wanted to suggest was if there are matters

24 that you want to clarify later on you can do it by

25 letter to us, if necessary?

26 A. Sure.

27 403 Q. I just want to get your statement today as to what

28 you recollect. You see what I want you to clarify

29 what you have stated in your statement to us?

53
 1 A. Sure.

2 404 Q. That your company was the beneficial owner of it?

3 A. Right.

4 405 Q. That is what I want to clarify?

5 A. Well, now as I understand and please bear with me

6 because I am not familiar with the original

7 transactions.

8 406 Q. Yes?

9 A. But I have been through all of this but I just may

10 not have taken it all on board.

11 407 Q. Yes?

12 A. Anyway just to say that the company was sold

13 to Montagu.

14 408 Q. Can I just stop you there. Do you know who Montagu

15 were?

16 A. No, just the buyer but who they were or anything

17 about them I don't know.

18 409 Q. It might have been a shelf company?

19 A. It may have been.

20 410 Q. Yes?

21 A. I just... (INTERJECTION) .

22 411 Q. Very well?

23 A. I don't know but the consideration went back to

24 Dublin, I think was shown in the accounts.

25 412 Q. Yes?

26 A. And, you know, clearly was dealt with.

27 413 Q. Yes?

28 A. And then after that this other cash started to come

29 through and was lodged and I think the first one or

54
 1 two documents show, you know, lodgement to

2 International Fruit Agents Limited, you know. Is it

3 an explanation? I don't think so. International

4 Fruit Agents but not International Fruit Agents

5 Limited and some of the later ones I think have

6 Limited.

7 414 Q. Yes?

8 A. But whether that was a mistake or deliberate but

9 none of it explains the fact that this International

10 Fruit Agents had been disposed of.

11 415 Q. Yes?

12 A. And the funds had gone bank into the company at

13 home, our Irish company, and the re-appearance of

14 this is obviously irregular and I don't have an

15 explanation.

16 416 Q. Very well. I just want to refer you to another

17 document. That document now is page 52, Ms. Cummins

18 (Same Handed) (Exhibit 4)?

19 A. Thank you.

20 417 Q. This is a document, it is an internal memorandum of

21 Guinness & Mahon and the upper photostat is bad but

22 the lower photostat is clearer?

23 A. Sure.

24 418 Q. It is a "Changes In Static Data." This is a banking

25 term, as I understand it, which is just merely a

26 note saying any changes in the data in the account

27 are noted on these pieces of paper?

28 A. Yes.

29 419 Q. However, what I want to draw your attention to is

55
 1 this: It is the 23rd November 1976. Do you see

2 that?

3 A. Yes.

4 420 Q. It says:

5 "International Fruit Agents Limited."

7 Do you see that?

8 A. Yes.

9 421 Q. Then it says:

10 "NR"

11

12 which is non-resident?

13 A. Yes.

14 422 Q. Then:

15 "Fixed DA"

16

17 that is deposit account?

18 A. Yes.

19 423 Q.
"Jersey & with GMCT"?
20

21 A. Yes.

22 424 Q. The very difficult photostat to read above that?

23 A. Yes, but...(INTERJECTION).

24 425 Q. Also show Guinness & Mahon. It is a "Changes In

25 Static Data"?

26 A. Yes.

27 426 Q. It seems to be the 25th November?

28 A. Yes.

29 427 Q. And it refers to the company's name:

56
 "Fruit Agents,"
2

3 that comes out all right. However then it says:

4 "Jersey Islands Ledger"?

6 A. Yes.

7 428 Q. Sorry, it is:

8 "Channel Islands Ledger"?

10 A. Yes.

11 429 Q. However, we need not bother about that one. The

12 bottom one is a record which shows that this company

13 International Fruit Agents Limited had a fixed

14 deposit account in the Jersey Islands, in Jersey?

15 A. I just don't have any fast answer for that, Judge.

16 430 Q. Yes?

17 A. If I might be permitted?

18 431 Q. Yes, do?

19 A. To search.

20 432 Q. Yes. You can consider it and I think unfortunately

21 we may have to ask you come back again or we can do

22 it by letter but you can consider it?

23 A. Yes.

24 433 Q. I want you to see what I am suggesting is that this

25 company which you said you beneficially owned the

26 accounts of?

27 A. Sure.

28 434 Q. Which were in Guinness & Mahon in Dublin also had

29 accounts in Jersey?

57
 1 A. Sure.

2 435 Q. And that there is a subsidiary of Guinness & Mahon

3 in Jersey, there was a subsidiary of

4 Guinness & Mahon in Jersey, at the time, Guinness

5 Mahon Jersey Limited?

6 A. Yes.

7 436 Q. You know nothing about this?

8 A. I know nothing about the whole of this.

9 437 Q. Just in that connection I want to put another letter

10 to you. It is page 56 (Exhibit 7)(Same Handed)?

11 A. Yes.

12 438 Q. This is a very long letter. There is confidential

13 information in this letter and I know you will treat

14 it as confidential?

15 A. Sure.

16 439 Q. I am only referring it to you because of one part in

17 it which I will draw your attention to?

18 A. Yes.

19 440 Q. I will just tell you what the letter is. It is

20 dated 16th October 1987. It is a letter from the

21 English Guinness & Mahon company?

22 A. Yes.

23 441 Q. Which was the parent company of Guinness & Mahon

24 Ireland?

25 A. Yes.

26 442 Q. It is addressed to Mr. Pender in Guinness & Mahon

27 Limited in Dublin. Do you see that?

28 A. Yes, I do.

29 443 Q. It is about College Trustees. Do you see that

58
 1 "College Trustees"?

2 A. Yes, I do.

3 444 Q. If I may just pause there?

4 A. Yes .

5 445 Q. Have you heard of College Trustees?

6 A. Yes, but only since.

7 446 Q. Since this has started?

8 A. Yes .

9 447 Q. College Trustees, I think you know, is a company.

10 It is a subsidiary of the Guinness & Mahon group of

11 companies. It was then. It was originally a

12 subsidiary of Guinness & Mahon in Ireland. What

13 this letter is: Is a discussion about the sale of

14 College Trustees?

15 A. Yes .

16 448 Q. Which, in fact, did take place later on?

17 A. Yes .

18 449 Q. I am only drawing your attention to this letter for

19 this purpose: The writer of this letter is

20 discussing the various circumstances that could

21 arise in respect of the sale of College Trustees?

22 A. Yes .

23 450 Q. He discusses on the second page the clients of

24 College Trustees,

25 "...which may have a loyalty..."

26

27 he says,

28 "to Guinness & Mahon specifically or

the Guinness & Mahon group generally."
29
 1 He sets out the number of the trusts?

2 A. Yes .

3 451 Q. Which College Trustees managed and then he sets out

4 the companies which they managed. If you would turn

5 over the page you will see "trusts" and then

6 "companies"?

7 A. All right.

8 452 Q. You will see half way...(INTERJECTION)?

9 A. Yes, sorry, I have it here.

10 453 Q. Have you got it there?

11 A. Yes .

12 454 Q. You will see half way -- do you see the list that is

13 headed "companies"?

14 A. Yes .

15 455 Q.
"International Fruit Limited"?
16

17 A. Yes .

18 456 Q. What I am pointing out to you Mr. McCann is that

19 International Fruit Limited was in 1987 a company

20 which was a client of College Trustees?

21 A. Yes .

22 457 Q. And this lends support to the note that I referred

23 you to earlier that College Trustees -- that this

24 company had an account in the Jersey company of

25 Guinness & Mahon. You know nothing about it, is

26 that the position?

27 A. International Fruit Limited I don't.

28 458 Q. Yes?

29 A. But I do know I think at some stage that -- no, I

 1 don't. I am sorry I was going to say Fyffes but

2 that is not as Fyffes.

3 459 Q. That is not Fyffes, no?

4 A. No, Fyffes had some relationship, a management

5 relationship, for a short while in...(INTERJECTION).

6 460 Q. I will give you a copy of this letter but I do think

7 we would have to keep the confidential information

8 out of it?

9 A. Yes.

10 461 Q. If that is all right with you, Mr. O'Keeffe?

11 MR. O'KEEFFE: Of course.

12 MR. JUSTICE COSTELLO: If you would like to look

13 at it?

14 MR. O'KEEFFE: Yes, Judge.

15 MR. JUSTICE COSTELLO: And read it yourself.

16 MR. O'KEEFFE: We can look at it before

17 we leave.

18 462 Q. MR. JUSTICE COSTELLO: You can look at it before

19 you leave, yes.

20 Mr. McCann, we did receive documents yesterday from

21 your solicitor in relation to Paris Investments

22 Limited?

23 A. Yes.

24 4 63 Q. We have not had an opportunity to examine them

25 properly?

26 A. Fine.

27 464 Q. So it may be necessary to call you back when we have

28 had an examination of it?

29 A. Right.

61
 1 465 Q. There may be other matters arising which we would

2 like your assistance on?

3 A. Yes.

4 466 Q. That is all I have to ask you at the moment.

5 Ms. Mackey would like to ask you a few questions

6 however?

7 A. Sure.

8 END OF EXAMINATION OF MR. NEIL McCANN BY

9 MR. JUSTICE COSTELLO

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

62
 1 MR. NEIL McCANN WAS EXAMINED, AS FOLLOWS, BY

2 MS. MACKEY

4 4 67 Q. MS. MACKEY: Mr. McCann, just if we

5 could go back for a moment

6 to your statement?

7 A. Yes.

8 468 Q. Have you got it there?

9 A. Yes.

10 469 Q. If you would just turn to page 5 (Exhibit 1)?

11 A. Yes.

12 470 Q. Up at the top, it is a continuation of the part of

13 your statement that deals with International Fruit

14 Agents Limited, which began on the previous page?

15 A. Right.

16 471 Q. It is what we have just been talking about now,

17 International Fruit Agents' accounts in

18 Guinness & Mahon from 1976 to 1980?

19 A. Yes, at least I think...(INTERJECTION).

20 472 Q. It is what we were talking about earlier?

21 A. Yes, right.

22 473 Q. As I understand what you were saying to us earlier,

23 after International Fruit Agents had been sold money

24 continued to be transferred and was lodged into its

25 account there?

26 A. Sure.

27 474 Q. And you described it as a mess and so on?

28 A. Yes.

29 475 Q. However, I am just not totally clear and if I could

63
 1 clarify it a little bit better I would be glad?

2 A. Right, I will try.

3 476 Q. Yes?

4 A. Yes.

5 477 Q. What exactly happened at that stage? An account in

6 the name of International Fruit Agents appears to

7 have been opened in Guinness & Mahon in 1976, is

8 that right?

9 A. It appears that way, yes.

10 478 Q. There was not one there dating from the time prior

11 to the sale, was there?

12 A. I don't think so.

13 479 Q. No, so this was opened. Into that account came what

14 monies exactly?

15 A. I have a note here if I may read it.

16 480 Q. Certainly?

17 A. Maybe it will be more helpful.

18 481 Q. Yes?

19 A. It just says:

20 "International Fruit Agents 1976 -

1980. We do not know or why --"
21

22 482 Q. Sorry, could I just interrupt you for a moment

23 Mr. McCann?

24 A. Yes.

25 483 Q. Did you prepare this note?

26 A. No, it is prepared by the people who have been, you

27 know, working, the professionals and the people

28 in-house and sorry...(INTERJECTION).

29 MR. MEGHEN: Not by us.

64
 1 A. No, no. I am sorry it hasn't. This has been

2 prepared by the people in-house but it

3 is...(INTERJECTION).

4 4 84 Q. MS. MACKEY: In Fyffes?

5 A. In Fyffes.

6 485 Q. Who would have prepared it?

7 A. Mrs. Ghose in particular.

8 486 Q. What information would she have used in order to

9 prepare this?

10 A. Well, all the information that she would have had in

11 talking to people and looking through files and

12 talking to the professionals and so on.

13 487 Q. Very well. Okay.

14 A. So, anyway:

15 "We do not know or why this company

appears to come back into existence in
16 1976. We think that it was a name of
convenience used on a number of bank
17 accounts held with Guinness & Mahon in
Dublin.
18
Money was transferred to these accounts
19 by overstating the cost of fruit in the
books of FII.
20
The practice was discontinued in 1979
21 and all of the accumulated monies were
brought back into the P & L account in
22 1980 and were chargeable to tax.

23 We do not know who advised..."

24

25 If anybody I think they should be saying,

26
"...in relation to this structure.
27
We have supplied some bank statements
28 in connection with this period of
activity. The statements supplied
29 refer to Guinness & Mahon Cayman Trust.
There were other accounts on which

65
 1 there was no reference to Guinness &
Mahon Cayman Trust."
2

3 488 Q. If I could just stop you there Mr. McCann?

4 A. Yes.

5 489 Q. Then the money that was transferred into IFA came

6 from FII, is that correct?

7 A. I believe so.

8 4 90 Q. Right.

9 491 Q. MR. JUSTICE COSTELLO: Can you give us a copy of

10 that please Mr. McCann?

11 A. Yes, yes.

12 4 92 Q. MS. MACKEY: Yes.

13 A. I can give it to you afterwards because I have been

14 scribbling. I am not quite sure where -- I think I

15 need it back.

16 493 Q. So...(INTERJECTION)?

17 A. I am sorry, Ms. Mackey.

18 494 Q. Yes. Is it on that basis then Mr. McCann that you

19 say that FII is the beneficial owner of the monies

20 in it?

21 A. Yes, yes.

22 4 95 Q. When you say here in your statement:

23 "I believe that FII was the beneficial

owner"
24

25 do you believe that of your only knowledge or have

26 your researchers...(INTERJECTION)?

27 A. No, I don't have my own knowledge of it. This is

28 just from enquiries.

29 496 Q. From your researchers?

66
 1 A. And research.

2 497 Q. Yes. Very good. Moving on down to just two

3 paragraphs below that?

4 A. Yes.

5 498 Q. You set out how the funds in these bank accounts

6 were applied. Do you see that:

7 "I believe that all of the funds

transferred into these bank accounts
8 together with interest earned thereon
were applied (1)"?
9

10 A. Yes, yes.

11 499 Q. So (1) in the transfer of part of such funds to FII?

12 A. Yes.

13 500 Q. They went back to FII again?

14 A. Yes.

15 501 Q. And then in making payment to suppliers and thirdly:

16 "In making payments to personnel of

FII" .
17

18 What does that relate to?

19 A. I understand that that is payments perhaps of

20 bonuses to staff, gross without deduction of tax.

21 502 Q. Without deduction of tax?

22 A. Yes.

23 503 Q. Would that be to particular members of staff or

24 personnel?

25 A. Well, yes.

26 504 Q. Yes?

27 A. But I am not sure, I don't know who they were.

28 505 Q. Would it be a particular grade or level of staff?

29 A. No, it wouldn't be like that.

67
 1 506 Q. No. Okay. Just two things in relation to what you

2 have told us. In regard to the Telex (Exhibit

3 4)that we looked at from John Furze to Martin Keane,

4 you remember the one about the withdrawal of the

5 money?

6 A. Yes .

7 507 Q. From FII deposit?

8 A. Yes .

9 508 Q. Have you enquired from Mr. Keane if he has any

10 knowledge or memory of this Telex?

11 A. I didn't speak to him.

12 509 Q. Yes?

13 A. But I understand that some of our people did.

14 510 Q. Right?

15 A. And I think he comments on what it was without

16 indicating any knowledge of the particular one.

17 511 Q. Yes?

18 A. But I think he said, "Yes, that is an in-house

19 internal memo," and I don't thing he had any

20 information to give us that helped us to identify

21 it.

22 512 Q. Right. That is very good. Then just one other

23 question: In relation to the drafts you are

24 satisfied, you say in your statement, that you did

25 not receive these for your personal use?

26 A. Absolutely not.

27 513 Q. Have you, this relates to 1977, checked your

28 personal bank accounts for 1977?

29 A. We have checked everything personal around that

68
 1 period and, you know.

2 514 Q. Do you keep records of your personal bank accounts

3 going back that far?

4 A. Yes, and going back even ten years earlier.

5 515 Q. Right?

6 A. The personal records are fortunately, you know, very

7 complete.

8 516 Q. Yes. Very good. I have not any...(INTERJECTION).

9 A. Which is not -- sorry, which is not the case for

10 some of the companies things because of change of

11 location and one thing and another.

12 517 Q. I have not any further questions. Thank you

13 Mr. McCann.

14 END OF EXAMINATION OF MR. NEIL McCANN BY MS. MACKEY

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

69
 1 MR. NEIL McCANN WAS EXAMINED AS FOLLOWS BY

2 MR. JUSTICE COSTELLO

4 518 Q. MR. JUSTICE COSTELLO: Mr. McCann?

5 MR. O'KEEFFE: Judge, we handed in the

6 contents of the letter

7 that we wrote initially to KPMG, as they are now.

8 MR. JUSTICE COSTELLO: Yes.

9 MR. O'KEEFE: We also handed in a copy

10 of the reply which we got.

11 MR. JUSTICE COSTELLO: Yes.

12 MR. O'KEEFFE: And we have handed in a

13 letter that we sent to the

14 Cayman Islands Company's Office and again no reply.

15 MR. JUSTICE COSTELLO: Yes?

16 A. And Judge just if I may ask you a question just for

17 guidance.

18 519 Q. Yes?

19 A. In the light now of, you know, the questions and

20 answers and the things that I have felt unduly vague

21 about, if there is something I feel or our people

22 feel when we discuss, you know, what has taken place

23 that there may be something, you know, that may be

24 helpful would you like us to put that on paper to

25 you if there is anything?

26 520 Q. Yes. Mr. McCann, we are investigating this

27 situation?

28 A. Yes.

29 521 Q. On behalf of The High Court?

70
 1 A. Sure.

2 522 Q. All information that you can gave us that would

3 indicate what occurred?

4 A. Yes .

5 523 Q. In this situation we would require?

6 A. Yes .

7 524 Q. If there is any further information that you can

8 give us please do so?

9 A. Yes .

10 525 Q. You can send it on by letter to us?

11 A. Yes .

12 526 Q. And we can consider it?

13 A. Yes, and if I may just, you know, stress again, you

14 know -- I appreciate very much the courteous way you

15 are dealing with the inquiry and to say to you that

16 we at our end have involved three most senior people

17 and we will investigate everything that we can and

18 it is the intention to be absolutely open.

19 527 Q. Yes?

20 A. And the same instructions have been given to all

21 people in the organisation.

22 528 Q. Yes. Just a propos of that Mr. McCann: There have

23 been some cases that we have considered in which the

24 person that we were interviewing had, in fact, been

25 previously approached and given information by

26 Guinness & Mahon or sometimes from, in one or two

27 cases, the Cayman Islands. This did not happen in

28 your case? You got no information from anybody

29 about this investigation until our letter, is that

 1 the position?

2 A. Absolutely not.

3 529 Q. Yes .

4 A. And we wrote to -- we wrote to the various -- to any

5 address we had about company registration and so on

6 in the Cayman and Bermuda and Ireland.

7 530 Q. Yes?

8 A. And we didn't get answers •

9 531 Q. Yes. Very well?

10 A. But we haven't been approached by anybody.

11 532 Q. Very well Mr. McCann.

12 MR. O'KEEFFE: Just Judge in relation to

13 the last question that you

14 raised?

15 MR. JUSTICE COSTELLO: Yes?

16 MR. O'KEEFE: I think that we might just

17 have to look into the

18 Telex matter, the Telex, to see if had we got a copy

19 of that before or after.

20 MR. JUSTICE COSTELLO: No, no.

21 It. . . (INTERJECTION) .

22 MR. MEGHEN: We had been sent a copy of

23 the Telex. I cannot

24 remember by whom.

25 MR. O'KEEFFE: Yes .

26 MR. JUSTICE COSTELLO: It does appear

27 Mr. O'Keeffe

28 that Guinness & Mahon had been asked to produce

29 certain records.
 1 MR. O'KEEFFE: Yes.

2 MR. JUSTICE COSTELLO: And they felt that they

3 were obliged to ask their

4 clients.

5 MR. O'KEEFFE: Yes.

6 MR. JUSTICE COSTELLO: For permission.

7 MR. O'KEEFFE: Yes.

8 MR. JUSTICE COSTELLO: To produce these records.

9 MR. O'KEEFFE: Yes, sure.

10 MR. JUSTICE COSTELLO: That was one instance.

11 MR. O'KEEFFE: Yes.

12 533 Q. MR. JUSTICE COSTELLO: I was wondering whether

13 that had happened in this

14 case?

15 A. I think so.

16 534 Q. Secondly, the report of the Authorized Officer was

17 made available to the representative of "Ansbacher"

18 here in Dublin and he has made portions of that

19 report available to some of the witnesses?

20 A. Yes.

21 535 Q. I just wanted to see whether that had happened.

22 Very well then. Thank you.

23 A. Thank you very much.

24

25 THE EXAMINATION WAS THEN CONCLUDED

26

27

28

29

73
Appendix XV (164) (1) (b)
 SUUfc T

Miltown Grange
Castlebellingham
Co. Louth

2"1 March 2000

Mr. Justice Declan Costello

Ms. Noreen Mackey
Mr. Paul Rowan BY mTTRfFfl
Office of the Inspectors 9 C? !*J&sj v«
Third Floor
Trident House
Blackrock
Co. Dublin

Dear Sirs & Madam,

I refer to your letter of 20* January..

As requested, I set out below a statement of all of my dealings whether direct or indirect with
Ansbacher (Cayman) Limited formerly known as Guinness Mahon Cayman Trust Limited,
Ansbacher Limited and Cayman International Bank and Trust Company Limited (the
Company). I have conducted or have had conducted on my behalf an extensive search of all
records in my custody or power or in the custody or power of Fyffes pic in relation to the
matters which are the subject of your letter. I have also made or caused to be made enquiries
of persons whom I believed could be of assistance in enabling me to prepare this reply. The
enquiries made on my behalf included a letter of request to the Company [EX1] seeking any
information or records held by it however no response to this request has been received to
date.

I makeThis statement on the basis of such records and information as have been disclosed by
the searches referred to above, on the basis of such limited recollection as I have of the
relevant events and circumstances having regard to the passage of timeand on the basis of the
documentation referred to herein and enclosed herewith.

For ease of reference I have divided my response to the questions raised by you in Appendix
C into two parts. Part A deals with the personal affairs of myself and my wife including any
companies controlled by either or both of us and Part B deals with the affairs of Fyffes Pic (of
which I am Chairman), its subsidiariesfrom time to time and its predecessors.
PART A
I have been a long-standing client of Guinness & Mahon Limited (the Bank) where I
maintained and continue to maintain a small current account (my principal account being
maintained with AIB). I started my relationship with the Bank during the 1971 bank strike.
From time to time I invested some funds with the Bank in accounts which were at all times
designated "resident accounts".

Question (I)
I am advised and believe that I am entitled to answer this question in the negative because I
do not believe that I caused a Deed of Trust to be executed and transferred money or other
assets to such a trust. However, I attach afile copy of an undated letter which appears to
have been sent by me to Guinness & Mahon Cayman Trust Limited [EX2]. This letter was
obtainedfrom thefiles of my advisors SKC, now known as KPMG, arising out of a search
conducted at my requestfor the puipose of enabling me to furnish this reply. This letter
constitutes the only documentation in my custody or power in relation to Guinness Mahon
Cayman Trust Limited and its possible involvement in my personal affairs. I have no further
information or recollection on who may have advised in relation to the establishment of the
trust or as to whether it was ever actually established.

From this letter it would appear that on 31 March 1972,1 may have caused a settlement for
the benefit of the issue of nay parents, the late Charles and Rosetta McCann, to be created by
John Andrew Furze who appointed Guinness & Mahon Cayman Trust Limited as trustees.
Notwithstanding thereference to Mr. Furze in the letter I have no recollection of ever having
heard of Mr. Furze until the public disclosure of his name in relation to the McCracken
Tribunal. I never met him.

The letter suggests that the trust, if established, may have owned the share capital of Blue
limited. I recollect nothing about Blue Limited and have not been able to obtain any
information in relation to this company despite enquiries made on my behalf with the Registrar
of Companies in Grand Cayman [EX3] and searches conducted at the Companies Registration
Office in Dublin.

From the letter it would appear that the trust's interest in Blue Limited was disposed of.
However apartfrom the information supplied above I do not have any further or more detailed
responses to your questions 1(a)- to - 1(g) in relation to theforegoing events which occurred
almost thirty years ago. hi particular my recollection and that of my advisors at that time,
SKC, is that if the trust was ever put in place, I never settled any assets or transferred any cash
to such trust and that the trust was never used.

Question (2)

I did not avail of the service described.

Question (3)
I did not avail of the service described.
Question (4)
I did not avail of the service described.

Question (5)
I did not avail of the service described.

Question (ti)
See reply at (1) above.

Question (7)
I did not avail of the service described.

Question (8)
See reply to (1) above.

PARTB
Fyffes pic is an Irish publicly quoted company of which I am currently a director and the
chairman. I control approximately 10% of Fyffes pic. Fyffes pic was incorporated in 1980
and acquired the fruit distribution business previously carried on by another Irish company
Fruit Importers of Ireland Limited which was incorporated in 1968.
I set out below my responses to the specific questions raised dividing my response between
Fyffes pic and Fruit Importers of Ireland Limited

Fyffes pic
In all cases the response is given in relation to Fyffes pic-and each of its subsidiary or
associated companies.

Question (1)

Fyffes pic did not avail of the service described.

Question (2)

Fyffes pic did not avail of the service described.

Question (3)

Fyffes pic did not avail of the service described.

Question (4)

Fyffes pic did not avail of the service described.

Question (5)
Fyffes pic did not avail of the service described.
 Question (6)
Not applicable.

Question (7)
Fyffes pic did not avail of tbe service described.

Question (8)
None.

Fruit Importers of Ireland limited

In all cases the response is given in relation to Fruit Importers of Ireland Limited and each of
its subsidiary or associated companies ("FII"). This company ceased trading in 1980.

FII had dealings with two Cayman Island companies in the early 1970ies, namely Paris
Investments Limited and International Fruit Agents T .imited which are dealt with in more detail
below. The Company held the shares in Paris Investments Limited in trust for the
shareholders of FII. Apartfrom this I am not aware of airy connection between the Company
and these two companies at that time. In particular I do not know whether these companies
or any of their assets were managed by the Company at that time and accordingly it is not clear
whether these companies are covered by the terms of your letter..

Paris Investments Limited

A Cayman company called Paris Investments Limited (Paris) was established in 1972 and it
was referred to in thefinancial statements of Fruit importers of Ireland T .imitedfor that year.
I attach a copy of the saidfinancial statements in which reference to Paris appears on pages
5 and 8 [BX4]. Paris was established to acquire the share capital of two Bennudan
subsidiaries of FII, namely International Fruit Shippers Limited and Fruit Exporters Limited.
I believe it is likely that these companies were acquired at nominal cost by Parisfrom FII.
During the year to 31* October 1972 International Fruit Shippers Limited, was acquired and
subsequently disposed of as a subsidiary and therefore was not listed as a subsidiary as at 31*
October 1972. I believe that these two companies were liquidated and the proceeds of
liquidation were used by Paris to subscribefor new shares in FII: Paris was subsequently
liquidated and the shares in FII were distributed in specie to the shareholders of FII..

As this transaction pre-dated the Corporation Tax Act, the Capital (kins Tax Act and the 1974
Finance Act, I have been advised by KPMG that the transaction does not give rise to any Irish
tax exposure for the companies involved or for the shareholders in FII.

International Fruit Agents Limited

FII acquired a subsidiary called International Fruit Agents Limited incorporated in the Cayman
Islands during the year ended 31. October 1972 though it may not have caused that company
to be established in the first instance. Its share capital was Cy$100. It was listed as a
subsidiary at page 11 of the financial statements of FII in that year a copy of which is set out
in [EX4]. The company was involved in the buying and selling of fruit and received
commissions for these activities. In March 1974 die company was sold. I attach a copy of the
sale agreement [EX5]. Notwithstanding the said sale it appears that non-resident bank
accounts were maintained with the Bank in the name of International Fruit Agents from
October 1976. to approximately October 1980. I believe that FII was the beneficial owner of
the funds in these bank accounts. A number of documents relating to certain of these accounts
refer to the Company and copies of these documents are attached [EX6].

I am not aware of what, if airy, service was provided by die Company in relation to these
bank accounts.

I believe that all of the funds transferred into these bank accounts together with interest earned
thereon were applied (1) in the transfer of part of such funds to FIIfrom 1976 to 1980 in
circumstances where FII believes that the said amounts were brought into the P & L account
of FII for the relevant year and accordingly would haveformed part of the profits liable to tax
for that year; (2) in making payments to suppliersfrom November - to - December 1976 and
March- to -June 1979; (3) in making payments to personnel of ^TT; and (4) in discharging
bank charges and other costs. Despite extensive enquiries no closing statements for these bank
accounts have been located nor are there any accounting records available reflecting the
closure of these bank accounts. Full disclosure of relevant facts has been made to the
Revenue Commissioners.

I am advised and believe that any Exchange Control consents required in respect of Paris
Investments Limited were sought and obtained by the Bank. I attach a copy of a letter from
the Bank to Story & Phelan, Chartered Accountants, dated 19 October 1972 [EXT]. I do not
know whether Exchange Control consent was necessary or obtained in relation to the
transactions undertaken by International Fruit Agents described above.

Other
Guinness and Mahon Limited have supplied me with a copy of a telex [EX8] which refers to
a dollar deposit in the name of FII containing, at the relevant time, $29,927.54. The fact that
John Furze was the author of the telex and a handwritten reference to "GMCT file" appears
in the top corner suggests a link between the account and tbe Company. The telex refers to die
debiting "of the sundry sub company account" and a hand-written note indicates that two drafts
for the total amount in the account, after deducting a number of expenses, were made payable
to me. I have no recollection of receiving these drafts. No reference to this account has been
located in what remains of the records of FII. Having enquired of a former employee of die
Bank I am advised that the references to the "sub-company " account and to replenishing the
account refers to an inter-bank account between die Bank and the Company. I have carried
out or have had carried out an extensive review of all of my personal bank accounts and
financial affairs and I am satisfied that these drafts were not given to me for my personal use.
Appendix XV (164) (1) (c)
 Kennedy Crowley & Co. Chartered Accountants

Harcourt House Harcourt Street Dublin S Telephone (oi) 757971 Telex 4494

Vincent Walsh, Esq., i.: AJS/BE

Arthur Cox & Co.,
42, St. Stephen's Green,
Dublin, 2. 5th January, 1973.

ted. White and Blue Trusts

Dear Vincent:

• '-.Three'Discretlonary Trusts ve*e .net ,up early in, ; ~ ... .

i?72jr-rthe Bed, White and Blqfc.Twef&^fc^lwa&jM.arlaing '--^^iUl,
from Earl-House Limited or. Earl;-J?quB«j^^eatanantft«d r,j,; " ,
V -'• ?
i• shbiild flow thxougbjocal i n v e s t m e n t * ' S c ^ . A

IattachidiGtocopr ofr ••.- .•

* Hah^n Cayman .Tcust Ltd.' la jc^WAiS^fMb ^^taiffk^^v^^V^I^ s^-^vj
t-: t^am**-'frfcsntl*]. beneficiary.. ;. v,;.^,
• • ? : • wrlttei* to Nell"McCann and-Fhllip •.
the'powera referred to In the last paragraph which have been •
' irrevocably granted to you are the powers of. the Settlor, the .. .
principal power being the power to replace- the, Trustees. The
Settlor was a Cayman Lawyer.
I hope that this will be in order with you and should you require
any further information, or a copy of the original documents,
please let me know.
With every good wish.
Yours sincerely,

Alex. Spain.

cc: Nell V. McCann, Esq.*/

Philip Monahaa, Esq.
Appendix XV (164) (1) (d)
* GUINNESS MAHON CAYMAN TRUST LIMITED
TKUEmifct MOOV« P.O. BOX 801
TKLIX CP ail OKAND CAYMAN
W. I.
December 28, 1972

N e i l McCann, Esq*
c / o Kennedy Crowley ft Co.
Chartered Accountants
H a i n a u l t House
6 9 / 7 1 S t . S t e p h e n ' s Green
D u b l i n 2 , IRELAND

Dear Mr. McCann»

T h i s l e t t e r w i l l s e r v e t o confirm t h a t we a r e h o l d i n g i n s a f e
c u s t o d y an i n d e n t u r e o f S e t t l e m e n t d a t e d 3 1 s t of March 1972
e x e c u t e d by t h e u n d e r s i g n e d a s S e t t l o r and t h i s Coup any a s
Trustee.

Under t h e t e r m s of t h e T r u s t you a r e named 'as * member of ? t h e

a p p o i n t e d c l a s s , , and i n . a l e t t e r of reques.tTio.ius d a t e d "
3 1 a t ; Mar<^h H:hei S e t t l o r lias i n d i c a t e4) t h a t -th'if: Trb»fc-Ptiurid :be • V
h e l d priiMurily' f o r thtf' b e n e f i t : o f youi'SifclfV! ybturlWiffe Mary .Vi ..
;and. y o u r - f a m i l y i Xhe.Sfcvurimftmre&ijaift^^ nsotrtto.'-
"• 'makg^cmy ^ d i s t r i b u t i o n s e i t h e r of.'e^it^l^btr^iiwomi'-from t h « v

I n a d d i t i o n --•tjo- t h e aforementioned T r u s t : D » 6 < i 5 ' - - a l s o - h o l d i n g •••" , v t :

a f u r t h e r Deed made on t h e 7th of November 1972 . whereby t h e
powers g r a n t e d t o t h e S e t t l o r under t h e t e r m s ' o f Clause 8 ( a ) of
t h e T r u s t Deed have been i r r e v o c a b l y g r a n t e d t o V i n c e n t Walsh E s q .
of A r t h u r Co* & Company, s o l i c i t o r s , 42, S t . Stephens Green, Dublin
2 , o r i f t h e s a i d Vincent Walsh should be d e c e a s e d , t o t h e s e n i o r
p a r t n e r f o r t h e t i m e bainfc i n t h e s a i d firm of A r t h u r Cox and Company.

rely,

JAFthr
 Cjiviv^v X,

EXHIBIT 2
Hiltown Grange,
Castlabelllnfehan,
Co. Loath.

Xh» Dlractora,
Gulnnasa & Mahon Cayawm Trust Llaited,
P.O. Box 887,
Grand Cayman,
British Vaat Iadiaa.

t
DaarSlrs,
I refer to « Doed of Settlamiit dated 31st March, 1972, vhareby John
.Andrew Tarx* appoint ad Goixmaaa and Hahon Caynan Troat Lladted as Trustees
of a SattlaaMnt for th« banafit of thalaaua of tha lata Charles MeCaxm and
Itoaetta KeCaon.
In thair capacity as Trustees, Goianaaa A Mahon Caynan Trtxat Llad ted, through
thalr nonlneaa ova tha antIra Issued ahara capital of Blue Limited.
I hereby authorise you to transfer at par to Hall Collins or'his nominee tha
antlra issued- ahara capital of Blua Llalted.

Yours faithfully,

Sell Y. McCann
Appendix XV (164) (1) (f)
 Chartered Accountants
EXHIBIT 1
1 Stokes Place Te.
St. Stephen's Green Fax ~ +383 1 4121122
Dublin 2 Internet www.kpmg.le
Ireland

Mr Michael Meghen Ourref sm/ep/162102

Arthur Cox & Co
Solicitors
EarLsfort Centre
Earlsfort Terrace
Dublin 2

11 May 2000

Dear Michael

Neil V McCann
Irefer to die undated letter marked "Exhibit 2" which was enclosed with Mr McCann's letter of
March 2 nd to the Inspectors.
I was on the staff of Kennedy Crowley in 1972. It is myrecollectionthat die trust referred to in
the said letter and the company, Blue Limited, were established as a tax planning measure to be
available if and when profits arosefrom various property transactions. It is also my recollection
that the trust and Blue Limited were never in fact used and were dissolved in due course.
I have no documentary evidence to support my recollection of these matters.

Yours sincerely

Sean Mooney

Jama Kama* • M n l a m • Padrafg (anm • l u t l w • MMftm* • GolmCMm

Mn CatfM • NmI Caota • OntoofMr M m • Mn OMr > Mi OTNty • MbM Ota
MutOatois • MOatay • ftunmitr • OaMnoM • Oaaal Oara • NcNriOtoig*
ItaaUMMtaaa • KoffHamii • k » M n • OoMKm* • MaurtuMaOor • PMMcOanan
Nhrr* ManMI • Jta MMnm • CkM Muaan • 3kw> Mvpky • Pat Olikn
Oanla O'Comof > Knki ODwotU • Saw O'Kaala • toma O'Aowta
Milan HoMwon • Mm • Haw* SHU • S u m 1W(a • bla WMaca
ntmd WMm • M a i WMda • CenatiamtaualWia<lui»ahtr tm dmnd * • > • *
MtanlMar > taanMaanar • fWlbiat • 0a<<an Wlman • lan*an«
Ofltoa* M*l aaM. carte M IMf
Appendix XV (164) (2) (a)
 ARTHUR COX
EARI.SFORT CFNTRH, EARI.SFORT THRRACH, DUBLIN 2
Tin. +353 1 618 0000 FAX +353 1 618 0618 Dx 27 DUBLIN
n i a i l @ a r t kiuurrccooxx..cc oo m

BMI.I-AST NI-:W YORK

Stokis lloi'si-:, 17-25 Coi.u-v.i; SGI AKi: East 29 I.nx'.ATi; I [h i. 570 I.HXINGTON AVKNl'K, 28TII F l . O O R
B i i i a s t UTL Will London H C 4 M 7JK NI;W Y O R K , N Y 10022
TI-IJ-PIIONI; + 4 4 2 8 9 0 2 3 0007 I i I i.piiom: + 4 4 2 0 7 2 1 3 0450 TI:I.I-:I"I i o n i ; +1 212 759 0808
FAX + 4 4 2 8 9 0 2 3 3464 FAX + 4 4 2 0 7 2 1 3 0455 Fax +1 212 688 3237

MM/pod C/M03/NSP

21st December, 2001

III M W,
His Honour Judge Sean O'Leary
Ms Noreen Mackey B.L.
Mr Paul Rowan F.C.A.
Mr Michael Cush S.C.
Office of the Inspectors
3rd Floor
Trident House
Blackrock
Co. Dublin

Re: Neil V. McCann

Dear Sirs

We act for Neil V. McCann and enclose a reply to your letter of November 20 th which we
have received by fax from Mr McCann this afternoon.

Mr McCann's original letter and enclosures will follow by post.

Yours faithfully

flJLaLt
ARTHUR COX

)ami=3 01>vcvi:k P.u-i. McI.u-oiii.in Ian- a. Scorr John G. Fish Danihi. E. O'Connor PktisR McLu-ciiun Rohi:rt Boiion John V. O'Dytkr Ronan Wai.su
Donooii C r o w i hy John S.YTai.su Mumaii. MNUIIFCX Joski-ii I.i:vi>i;n VCii.i.iam Johnston Ei'UKnh McCac.i-i; Nicholas G. Moorh Dkcian ta
David O'Donoiiok Coim I)i-oc.an C a r i . O ' S i t.i.ivan Isaiii-i. Foi.i:v J o h n Mi-aim-: Conor McDonnkm. Patrick McGovi:rn G r a i n n i ; IIi:nni:5sy SRami's Givi:n Colin Byrne
C a r o i i M i Diivi i \ Ciaran Boiumr Grmc.oky Gi.ynn D a v i d Foi.i:v Sn;pin:N JIi-oarty P i - c i a n Dkisiani-: Saraii Ccnnii-t Katinj:i-:n Gakri-:it Padraic. O RIorimin Dr. Mary Redmond
l:i.iz.viiin-|i Honiwiii.1. N i a . m i i UI-RKI: Wil l . i a m Day Andrew Lenny John Mi-nton Patrick O'Brien O r i a O'Connor Brian O'Gorman Mark Sai'nders
Appendix XV (164) (2) (b)
Rcvd 12/21 05:13PM ( 0 1 .
21x12/01 i8O;20rthur M for MMEGH£n
U m Z
^'"nted MME3C236E213E73
on 12/21/2001 05-
NO.

Your ref: C/M03PNSP.

21 December 2001. P R I V A T E 8C
His Honour Judge Sean CLeswy,
Commml
Ms. Noreen Mackey B . L
Mr. Paul Rowan F . C A
Mr. Michael Cosh S.C.
Office of the Inspector ofTaxes,
3rd Floor Trident House,
Blackrock, Co. Dublin.

Deaf Sirs,
The attached Replying Statement is made in response to the preliminary coodosions
expressed in you* letter of 20th November 2000 in relation to myself.

I refer to the paragraphs as numbered ia your letter.

If necessary I am prepared to give further mdencg^tcT substantiate the matters set
out in my accompanying statement

Yours sincerety.
Rcvd 12/21 05:13PM (01:36) on Arthur Cox ine 11 for MMEGHEN W0RKSRV2 printed MME3C236E213E13 on 12/21/2001 05:15PM * Pg 3/5
21/12/01 13:20 NO. 762 003

REPLYING STATEMENT OF NEIL V. MCCANN TO INSPECTORS ^ ^

(i) Around 1975 my wife and I controlled, directly or indirectly, 57% of the
shares in FU. FIX was an unlisted public company with many other
shareholders. The Board (in addition to myself) comprised independent
directors, some of whom were the representatives of other significant
shareholders.

Note:
These facts are relevant to illustrate the Board comprised independent persons
and was representative of many shareholders.

(ii) The second last sentence in paragraph 1 commencing with the words "In 1972,
FTI acquired " has no bearing on the facts or inference and should, I
suggest, be deleted.
(iii) The last sentence in paragraph 1 is factually incorrect The fects are: The
Company Fruit Importers of Ireland Limited ceased trading in 1980. Its trade
and assets -were transferred to a new and previously unconnected company, FII
pic, which in 1986 purchased Fyffes and subsequently changed its name to
Fyffes pic.

2. (i) I repeat I have no recollection or knowledge in relation to the undated copy

letter to which you refer. I do not believe I ever signed the original of such a
letter and it is significant that no original signed version exists. As noted by
me already this copy letter only came to light from files which had been
maintained by SKC. Whilst they were my financial and taxation advisers,
there is no certainty the letter was ever sent by me to GMCT.

(ii) The hand written notes on the copy letter sent by you to me are in fact mine,
having been written by me in February 2000.

3. (i) The letter dated 28 December 1972from Mr Furze addressed to me was in feet
sent to SKC. The Inspectors, in paragraph 4, accept that no assets were ever
transferred to the Trust (and refer to the letter of Mr Sean Mooney of KPMG).
This last fact confirms my belief and my evidence as already given to the
Inspectors. In the light of this finding by the Inspectors I contend that the
finding in the last sentence in paragraph 3, namely "it is clear that he
still had an interest in the Blue Trust at that time", is clearly incorrect in fact
and contradictory to the findings in paragraph 4, to which I have referred,
namely that "no assets were ever transferred to it".
(ii) I am also advised that asft matter of law I did not have an interest direct or
indirect if in fact no assets were ever transferred to the Blue Trust.

(i) Asfer as I can recall I never arrangedfor or permitted the establishment of the
Blue Trust. Moreover I cannot accept the conclusion of the Inspectors that
having determined that no assets were transferred by me to the Trust, that the
role of GMCT constituted the "carrying out of business" for me by GMCT.
Rcvd 12/21 05:13PM (01:36) on Arthur Cox I :>.e " for MMcaHES WCRKSRV'2 print 3d *ME3C236e213El3 on 12/21/2001 05:15PM * Pg 4/5
21/12/01 18:20 NO.762 P04

Mr-Moonsy also states in his letter that the Trust (Le. the Blue Trust) and Blue
Limited were never in iaet used and were dissolved.

(ii) As already stated I received taxation and financial advice from Kennedy
Crowley at the time. Transactions such aa the establishment of a Trust with an
associated company were part of the tax planning measures of the time. This
has been confirmed to me by XPMG in a letter dated 21" December 2001 a
copy of which 1 attach. I at all times acted in accordance with such advice. It
is, I suggest, appropriate to refer to such facts, if the inspectors are to conclude
that GMCT carried out business for me so as the context can be fairly
understood.
Conchision:

Having regard to the potential impact of your findings on my good name and
reputation 1 also request the substantial restatement and redrafting of paragraph 6.
If the Inspectors accept my submissions in relation to paragraphs 5 and 6, then 1
submit having regard to the potential adverse affect on my reputation of any
remainingfindings of the Inspectors (howsoever slight) that the Inspectors should in
accepting that no assets were ever transferred to the Trust by me exonerate me and
exclude any suchfinding. Alternatively anyfindings of the Inspectors should protect
firstly my reputation as at all times I acted properly on accepted legal and taxation
advice.
Appendix XV (164) (2) (c)
12/21 12:19PM (00:36) on Arthur Cox tine 02 for MMEGHEN UORKSRV2 printed FAX3C23290671CA on 12/21/2001 12:23PM * Pg
21•Dec• 2 0 01 12:3 2 No• 2173 P. 2

Chartered Accountants

1 Stokss Place Telephone +3S3 1410 1000

St. Stephen'3 Green Fax +3S3 1 412 1122
Dublin 2 Internet www.kpmg.ie
Ireland

Mr Michael Meghen Our ref *wbh/2553a2

Arthur Cox
Solicitors
Earlsfort Centre
Earlsfort Terrace
Dublin 2

21 December 2001

Dear Michael

Re: Neil V. McCann

Thank you for your letter dated 11 December 2001 addressed to Jerome Kennedy, who has
asked me to reply.

Trust arrangements, such as those set up in relation to the Bine Trust and the underlying
company, were a framework within which profits arisingfrom property development might
accumulate for the benefit of beneficiaries. This was a type of taxation mitigation arrangement
prevalent at the time and, to the best of my recollection, such an arrangement was in accordance
with Irish law at the time and had been so opined upon by leading Counsel of the day.

Yours sincer*

Alexander K. Bums
Partner

Jairao
nmaClaKv
alwiiady«*Jim Oart/
ia*fyBatfa•tt Co
>lmGaerlyided
BriRM- -Ciwa
Xtaok
ph drow
uyn
as
«i«»•Pa JUa
Bx MnD f
Br Ci tor CR 'ta aw
ly
So o en Oik < Wir t Ct
tf eB
vn • Ps J O
u tlay • Eimonn Oo
nao ul I n net
La m a Ga llat far • Oor NUI Gan
n on • A
fcJ
Hrt OMtta ' Ru a Urw GiM oM • l
<09ar GfcaaM
Oi
smc&iMuddIi
C/
ah
aanr
at •- BC awd ,<Marn« *• UIa
u.r
luMu Mr
co
fh
ly
oy»• Pa?l
aiO' MiM • Paa
ulM M c Go
onwna n
J liona ulle n . £ m
i n
> aten • O O' C or *
O'Kaaia • Terana ov
eidO'R ourka * jonn ?.<xh6 •Irtusiificaaoria
Ha*<y Savi lr
lt
aiv•
Richard VvMUn * D Wilkinaon «flcasn woadj • C oruul
iami o
thf
aincii:Crtsrwrod AccouRcoart aiitt! * $»an Moo^ay • im Young
Mafflbw firm oi
Of OuDin. a «ltall. Cent and Salway
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Philip Monahan.

a) Letter of 5 January 1973 - Kennedy Crowley & Co to Mr Vincent Walsh

of Arthur Cox & Co.
 Appendix XV (165) (1) (a)

yell's.
 Kennedy Crowley & Co. Chartered Accountant!

Haroourt Home Harcourt Straet Dubfin 1 Telephone (01) 747971 Telex 44M

Vlnooat vol*, X«J., AJ8/B*

Artlwrftoe * Co.,
42, St. fitojhoa'e Qxooa.
DnbXia, 2. 5th Jaauoxy, 1973.

Door VlaoanCt

ttfcvflW,. Ifcito. and Bb* . t J M t o ^ ^ f a r IP**** /^..^.-^.^.iL

Limited : . 'k*/.
ttio&ld &t*n*tm*t* '..J:. ~ ,.,<.
. X-~otifcMfc:fjfc*tU0Bpr ofi l o t t o * , . . . . . . . .
iuh£» C*Mta*JTO«t ltd, JLn .rtpn^tfaa .7 . ^ v
ijp&fcoatlol b*H»«ioi*xy..•• .ct^-

tto poUrii roforrod to i s tfeo lost pcrf|2aph ffctdi fcovo boon •

ifcxwraooblr ssooto* to youoxo th* paw*** a t tfeo,Bottlor, tho . ..
principal power being tho power to ioplooo- the, Tjnutooo. Xho
Sottiov w« o C e y n Loayor.
I hop* Out this will bo in ordox vith yoa end should yea roqalxo
oagrfinrtfco* information, or * eopgr of tho original 4owiwt» t
plMM lot OA taO«.
With ovoxy ®ood «uk.
Tear* olaooroly,

Alex. tpOiA(
j
oot HQll^lfeCara, Jo*. 4 '
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Alex Spain.

a) Letter of 5 January 1973 - Mr Alex Spain to Mr Vincent Walsh.

Appendix XV (166) (1) (a)
 ( Kennedy Crawley & Co. Chirtered Accountant*

Hircourt House Harcourt Street Dublin S TtkphoM (01) 75797lTd«4484

ytaoMft taq.,
Arthur Cos A Co..

#
Baa* Viaeoati • ••

'F.W- Liaitod o* vj^.

— UxbfcM .-A • -Oj^
oft ; .
••• •• . - r . - . a t i k U & p ' c ^ f t n - a w t Ltd; ;c^q.tfa»^^tl^ai^fff-?^^ . l g^-^yw,.^
'.. % • - b o o s t t o i o ^ r . - V «
'writ*** ^tso v-OJ^;.^? •
tto'poainrb roforrod to In t ^ U s t *** '
i**Wbc«blr gxaatoA to youaxo «h* pow»j$ of, tfro. fattier. tha ... .
priwipol power baing the powar to raplaca tha> X*uatoo«. Tha
jBattlor was • Capua Lmgwr.
X hop* chat this will bo 1A ordox villi yes aad shoald yen roqpixo
aay fn*tfao* iafouatloa, ok a aogy of tha original Hani—nrs.
ploaoo lot in
With m a good wish
Yoors siaooxoly.

>s
J '
oci sail
IhilipV.Mooahaa,
MoOaaa, Is*.*'
Isq.
1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr
Vincent Ferguson.

a) Transcript of evidence of Mr Vincent Ferguson dated 23 February 2000.

b) Letter of 2 March 1992 - JA Furze to JD Traynor.

c) Letter of 15 October 1992 - JA Furze to JD Traynor.

d) Letter of 27 May 1993 - JD Traynor to Vincent Ferguson.

e) Letter of 31 December 1986 - JA Furze to JD Traynor.

f) Letter of 13 February 1990 - JA Furze to Ascot Holdings.

g) Letter of 23 April 1987 - JD Traynor to Vincent Fergsuon.

h) Letter of 4 September 1987 - JD Traynor to JS McCarthy.

i) Letter of 28 May 1990 - JD Traynor to JS McCarthy,

j) Letter of 28 May 1990 - JD Traynor to JS McCarthy.

k) Unsworn statement of Vincent Fergsuon of 11 February 2000.

Appendix XV (167) (1) (a)
PRIVATE EXAMINATION OF MR. VINCENT FERGUSON

UNDER OATH

ON WEDNESDAY, 23RD 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. VINCENT FERGUSON

Represented by: MR. SIMON McALEESSE

MATHESON ORMSBY PRENTICE

30 HERBERT STREET

DUBLIN 2
 2 THE EXAMINATION COMMENCED, AS FOLLOWS, ON WEDNESDAY,

3 23RD FEBRUARY 2 000.

5 MR. JUSTICE COSTELLO: Mr. Ferguson, we will

6 start the interview. I am

7 Declan Costello and on my right is Ms. Mackey and on

8 my left is Mr. Rowan.

9 MR. FERGUSON: Yes.

10 MR. JUSTICE COSTELLO: We are the Inspectors

11 appointed by

12 The High Court as you know.

13 MR. FERGUSON: Yes.

14 MR. JUSTICE COSTELLO: What we have made clear to

15 witnesses is that, of

16 course, if they have a problem about questions that

17 we ask and they want legal advise they can consult

18 their legal advisor. Similarly, if their legal

19 advisor wants to mention something to their client,

20 we will stop and allow that to be done.

21 MR. FERGUSON: Right.

22 MR. JUSTICE COSTELLO: Would you now take the

23 oath, which we will ask

24 Ms. Cummins, our solicitor, to administer to you.

25

26

27

28

29

3
 1 MR. VINCENT FERGUSON, HAVING BEEN SWORN, WAS

2 EXAMINED AS FOLLOWS:

4 MR. McALEESE: I suppose I should at this

5 stage say, Judge, once

6 again, that I am the solicitor for Mr. Ferguson.

7 MR. JUSTICE COSTELLO: Yes, yes.

9 MR. FERGUSON WAS EXAMINED, AS FOLLOWS, BY

10 MR. JUSTICE COSTELLO:

11

12 1 Q. MR. JUSTICE COSTELLO: Mr. Ferguson, perhaps you

13 could briefly outline your

14 career for the purposes of the record?

15 A. Certainly, Judge. I am a certified accountant. I

16 have worked in business all my life. I was never a

17 practising accountant as such. I started work in

18 Sligo, where I was born, as a clerk in a builders

19 providers. I undertook a correspondence course to

20 qualify as a certified accountant over the years. I

21 went to London in 1958 for experience and was there

22 two years. I came back to Dublin to work for a

23 company called M.J. Boylan. After a year or so

24 there I went to an American company, Warner Lambert,

25 who were situated in Deansgrange.

26 2 Q. Yes?

27 A. From there in 1964 I went to the Irish Sugar Company

28 as a management accountant. I left that company in

29 1969 to join Allied Irish Investment Bank, which is

4
 1 a merchant bank set up by Allied Irish Banks. I was

2 there a year and a half when we set up our own

3 company with my partners at the time Nicholas

4 Leonard and Tony O'Reilly. We set up a company

5 called Fitzwilton Securities, which was designed to

6 be an investment holding company.

7 3 Q. Yes?

8 A. We borrowed money from The Ulster Bank at the time

9 and went on a series of acquisitions of various

10 companies in Ireland. That developed and grew into

11 quite a successful company for a period and

12 eventually we acquired W.H.M. Goulding & Company, a

13 fertilizer company, which was a public company at

14 the time. We then ran that company which acquired

15 further other companies over the years.

16 4 Q. Yes?

17 A. That company was called Fitzwilton from 1972

18 onwards.

19 5 Q. Yes?

20 A. During the period of that company's expansion we

21 fell on hard times in the fertilizer business

22 following the oil crisis of the mid 70's. We had to

23 realise quite a lot of our investments. We then

24 held investments in Independent Newspapers. We

25 started an oil company called Atlantic Resources and

26 I retired from that company in, I think, 1987. I

27 remained a Director until it was acquired recently.

28 I am a Director of Independent Newspapers.

29 6 Q. MS. MACKEY: Of which?

5
 1 A. Pardon?

2 7 Q. MS. MACKEY: You are a Director of

3 which?

4 A. Independent Newspapers.

5 MS. MACKEY: Yes.

6 A. Independent News & Media, is its new name.

7 8 Q. MR. JUSTICE COSTELLO: Just so that I understand,

8 Fitzwilton is a completely

9 separate company to Atlantic Resources, is it?

10 A. Absolutely, yes.

11 9 Q. Is it the investment company which you and

12 Mr. O'Reilly and Mr. Leonard had started, or is this

13 the holding company of these other companies?

14 A. Well, it made investments in other companies.

15 10 Q. In other companies?

16 A. Yes, I mean the first investment was a small public

17 company in Dublin called Crowe Wilson, which was in

18 the textile business.

19 11 Q. What is the name of this company which is the

20 investment company?

21 A. Fitzwilton.

22 12 Q. Fitzwilton?

23 A. Yes.

24 13 Q. Fitzwilton made investments then in

25 Atlantic Resources, did it?

26 A. That's right.

27 14 Q. Was it a subsidiary then?

28 A. No.

29 15 Q. Of Fitzwilton?

6
 1 A. No, no. It was that Fitzwilton were shareholders in

2 it.

3 16 Q. Yes?

4 A. Other people became shareholders as well.

5 17 Q. Yes. You were a Director then of Fitzwilton?

6 A. Yes.

7 18 Q. You were a Director of Atlantic Resources?

8 A. That's right.

9 19 Q. Are you still a Director of these companies?

10 A. No.

11 20 Q. When did you cease?

12 A. Well, Atlantic Resources was taken over by a mining

13 company, Arcon.

14 21 Q. Yes?

15 A. I don't exactly know when. I think it was in the

16 early 1990's. I ceased to be a Director at that

17 stage.

18 22 Q. Yes?

19 A. Fitzwilton was acquired by the O'Reilly Family

20 Interests.

21 23 Q. Yes?

22 A. In 1998.

23 24 Q. Yes?

24 A. I ceased to become a Director at that stage.

25 25 Q. Yes. I want you to tell us about your relationship

26 with Mr. Traynor?

27 A. Well, I met Mr. Traynor originally -- one of the

28 investments that Fitzwilton had in the early 1970's

29 was a share in New Ireland Assurance Company. We

7
 1 acquired a 20 percent interest in New Ireland

2 Assurance Company in the early 1970's and

3 Mr. Traynor was a Director of New Ireland. So, I

4 met him at that stage.

5 26 Q. Yes. Did you have a business relationship with him?

6 A. No, no.

7 27 Q. When did you have your first business relationship

8 with him?

9 A. 1984.

10 28 Q. What was that?

11 A. That was a loan that we made from Guinness & Mahon.

12 29 Q. Yes. Could you tell us about that now please?

13 A. We borrowed money from Guinness & Mahon.

14 30 Q. Who is "we"?

15 A. Mr. Jim McCarthy and Mr. Neil Collins.

16 31 Q. Yes. I want you to tell me in detail the

17 conversations you had and where they took place?

18 A. The conversations I had?

19 32 Q. Yes?

20 A. Where, with Mr. McCarthy and Mr. Collins?

21 33 Q. Yes?

22 A. They had had previous dealings with

23 Guinness & Mahon.

24 34 Q. Yes?

25 A. I hadn't had previous dealings with them.

26 35 Q. Yes?

27 A. I knew Guinness & Mahon in the old days when a man

28 called Bill Forwood and John Guinness were the

29 joint Managing Directors. I worked, as I said, for

8
 1 Allied Irish Investment Bank and I had commercial

2 dealings with them on behalf of the bank.

3 36 Q. Yes?

4 A. With Guinness & Mahon.

5 37 Q. Yes?

6 A. Yes.

7 38 Q. I want you to tell me, did negotiations take place

8 with Mr. Traynor about the loans?

9 A. Yes, I didn't actually partake in the negotiations

10 directly myself.

11 39 Q. You did not meet Mr. Traynor at all, did you not?

12 A. No, not at that stage.

13 40 Q. No?

14 A. No.

15 41 Q. Tell we what you were told? Was it Mr. McCarthy and

16 Mr. Collins you saw?

17 A. Yes.

18 42 Q. Tell me what they told you?

19 A. They told me that money would be available from

20 Guinness & Mahon to buy shares.

21 43 Q. Yes?

22 A. On terms that other banks wouldn't be

23 ...(INTERJECTION).

24 44 Q. No, I want you to tell me, Mr. Ferguson?

25 A. Sure.

26 45 Q. Mr. Ferguson, I want full details of this

27 transaction?

28 A. Right.

29 46 Q. Completely full details?

9
 1 A. Yes .

2 47 Q. Do you understand?

3 A. I understand.

4 48 Q. Very well?

5 A. Yes. All I can say is what I remember from the

6 time.

7 49 Q. Yes?

8 A. My memory at the time was that Mr. McCarthy and

9 Mr. Collins had had previous dealings

10 with Guinness & Mahon. We were trying to borrow

11 money to invest in Atlantic Resources shares. I was

12 already very heavily borrowed with the ordinary

13 banks.

14 50 Q. Mr. Ferguson, would you just tell me what was said

15 and what you understood the arrangement was?

16 A. I understood that money was available from

17 Guinness & Mahon, as a bank loan, to purchase shares

18 in Atlantic Resources.

19 51 Q. Yes?

20 A. And the conditions were that shares would be held as

21 security and that a personal guarantee would be

22 required.

23 52 Q. Go on?

24 A. And that was implemented.

25 53 Q. No. I want you to tell me what the arrangement was?

26 A. The arrangement was that a loan was being made

27 available to us.

28 54 Q. Yes?

29 A. I thought collectively at the time but it turned out

 1 to be separately to each of us, that the loan was

2 made for the purchase of the shares. The shares

3 would be purchased and would be held as security by

4 the bank and that a personal guarantee would be

5 required as well. Now, these terms were not

6 available from any other bank.

7 55 Q. All right. I want you to tell me what happened

8 then?

9 A. The loan was implemented.

10 56 Q. Tell me what happened?

11 A. The shares were purchased.

12 57 Q. How do you know and by whom?

13 A. I had dealt with Guinness & Mahon in the previous

14 ten years. They were a reputable merchant bank.

15 58 Q. Who purchased the shares?

16 A. Guinness & Mahon.

17 59 Q. Guinness & Mahon?

18 A. Yes.

19 60 Q. You were told that?

20 A. Yes. Well, I assumed that.

21 61 Q. Yes?

22 A. I mean because we were dealing with

23 Guinness & Mahon.

24 62 Q. You assumed that Guinness & Mahon had purchased the

25 shares?

26 A. Yes.

27 63 Q. The Irish company?

28 A. Well, the Irish company through a subsidiary or

29 through a nominee account or whoever.

11
 1 64 Q. Did you know?

2 A. No, I didn't know. I didn't know.

3 65 Q. Did you make enquiries?

4 A. I didn't make enquiries.

5 66 Q. Continue, what happened then? They purchased the

6 shares. How did you learn that?

7 A. They informed us.

8 67 Q. Who did?

9 A. I presume Mr. Traynor did.

10 68 Q. You were not told by Mr. Traynor?

11 A. I don't recollect being told by him but I knew that

12 ...(INTERJECTION).

13 69 Q. Could he have told you?

14 A. Pardon?

15 70 Q. Could he have told you?

16 A. He could, of course, certainly, yes. He could have

17 told me but I don't remember him telling me.

18 71 Q. You do not remember him telling you?

19 A. No.

20 72 Q. If he did not tell you, then Mr. McCarthy told you

21 or Mr. Collins told you?

22 A. Yes.

23 73 Q. What did they tell you?

24 A. They told me that the loan had been approved and was

25 available and shares had been purchased.

26 74 Q. By whom?

27 A. By Guinness & Mahon.

28 75 Q. By Guinness & Mahon?

29 A. I was dealing with Guinness & Mahon.

12
 1 76 Q. You thought Guinness & Mahon had purchased the

2 shares?

3 A. Absolutely, yes.

4 77 Q. Yes?

5 A. Yes, on our behalf.

6 78 Q. On your behalf?

7 A. Yes.

8 79 Q. What about the registration of the shares? Who

9 would be registered as owner of the shares?

10 A. I presumed I would be indirectly.

11 80 Q. No, no?

12 A. Yes.

13 81 Q. However, you would not be -- I am talking about the

14 share register. Who would be on the share register?

15 A. The nominee company.

16 82 Q. Who was what?

17 A. Which I understood later was a company called

18 Coral Reef.

19 83 Q. When did you find that out?

20 A. Sometime after the event.

21 84 Q. How long after, Mr. Ferguson?

22 A. I can't honestly say. I would say weeks.

23 85 Q. Weeks?

24 A. Yes.

25 86 Q. So, weeks later you had understood a nominee

26 company. . .

27 A. Right.

28 87 Q called Coral Reef Securities?

29 A. Yes.

13
 1 88 Q. What did you understand that was? Did you know

2 where it was registered?

3 A. No, I didn't. I assumed it was a nominee company.

4 89 Q. Yes, I know. However, did you know where it was

5 registered?

6 A. No, I didn't, no.

7 90 Q. You did not know that it was registered in

8 the Cayman Islands?

9 A. I didn't know at that time, no.

10 91 Q. When did you find that out?

11 A. Some time later.

12 92 Q. How long later?

13 A. I don't know, Judge. I mean it could have been

14 weeks.

15 93 Q. It could have been weeks?

16 A. Yes, or months, yes.

17 94 Q. Within a matter of weeks then you had learned, first

18 of all, that it was a nominee company called

19 Coral Reef Securities Limited that were holding the

20 shares?

21 A. Yes.

22 95 Q. Did you ascertain were they registered as the owners

23 of the shares?

24 A. No, I didn't, no.

25 96 Q. No. Did you make any enquiries as to who was

26 registered as the owners of the shares?

27 A. No, I didn't.

28 97 Q. How much money did you borrow, Mr. Ferguson?

29 A. Something like £375,000.

14
 1 98 Q. How many shares were you going to buy?

2 A. Something around 325 I think.

3 99 Q. At £1.20 per share?

4 A. At £1.20, yes. That's right.

5 100 Q. There is no doubt, Mr. Ferguson, that you were the

6 beneficial owner of these shares?

7 A. I had no doubts, no.

8 101 Q. You had no doubts?

9 A. No.

10 102 Q. You had absolutely no legal document to support your

11 claim that you were the legal owner of the shares,

12 is that correct?

13 A. As far as I know I haven't been able to find one

14 Judge. I mean ...(INTERJECTION).

15 103 Q. You signed nothing?

16 A. Pardon?

17 104 Q. You signed nothing?

18 A. I certainly signed a personal guarantee.

19 105 Q. Did you sign a personal guarantee?

20 A. Yes, I did, yes.

21 106 Q. Yes?

22 A. Yes.

23 107 Q. You got some documents then?

24 A. Yes.

25 108 Q. You got some documents relating to this transaction.

26 You got a personal guarantee to sign?

27 A. I did, yes.

28 109 Q. Who gave you that?

29 A. Guinness & Mahon.

15
 1 110 Q. Who in Guinness & Mahon?

2 A. Well, I presume it came from Mr. Traynor.

3 111 Q. Did you meet Mr. Traynor?

4 A. Not personally at that stage, no.

5 112 Q. Somebody handed you this document to sign?

6 A. That's right, yes. It may have come in the post. I

7 can't remember. I do remember signing it and

8 I remember seeing it afterwards.

9 113 Q. Where there any other documents that you were given

10 at this time?

11 A. Not that I can recollect, Judge.

12 114 Q. When you say, "not that you can recollect," did you

13 look to see?

14 A. I didn't specifically look. I mean I was dealing

15 with a reputable merchant bank.

16 115 Q. No?

17 A. Sorry to go back.

18 116 Q. What I mean, Mr. Ferguson, is now?

19 A. Sorry, yes.

20 117 Q. Have you looked to see since what records you have

21 about this transaction?

22 A. Yes, I have looked to see whatever records I had.

23 118 Q. Did you see any records?

24 A. No, I didn't.

25 119 Q. You found no records?

26 A. Well, I found some correspondence.

27 120 Q. What correspondence?

28 A. Well, it is in the document that I submitted.

29 121 Q. No, that is not it. There is no correspondence

16
 1 about Coral Reef Securities in 1984. Did you have

2 any correspondence about it?

3 A. No, I haven't been able to find any, Judge.

4 122 Q. Yes?

5 A. I may have had. I mean to my mind the loan had been

6 made. I knew I was liable for it. I knew I was

7 dealing with a bank.

8 123 Q. Did you know what interest you had to pay on the

9 loan?

10 A. Well, it was a variable rate of interest.

11 124 Q. How do you know that it was variable?

12 A. Well, it seemed to change from time to time.

13 125 Q. However, was it agreed that it was to be variable?

14 A. I assume it was.

15 126 Q. How do you know that it changed from time to time?

16 A. Well, I seem to recollect being told that interests

17 rates was varying according to the

18 . . . (INTERJECTION) .

19 127 Q. Who told you?

20 A. I presume Mr. Traynor told me. I mean I don't

21 honestly know. I mean I would regard a normal bank

22 loan as being at a variable rate of interest.

23 128 Q. I am just wondering what your recollection is,

24 Mr. Ferguson. Do you recall Mr. Traynor telling you

25 that the rates had been changed?

26 A. I don't recall specifically, no.

27 129 Q. You do not?

28 A. I don't. I mean I had several other bank loans with

29 other banks and they were always subject to a

 1 variable iterest rate.

2 130 Q. Did you know how this Coral Reef Securities -- what

3 its arrangement was? It was a nominee company you

4 told us, is that right?

5 A. I thought it was a nominee.

6 131 Q. What do you mean by that? What did you understand

7 by that?

8 A. I thought that the shares were held on my behalf by

9 this company.

10 132 Q. By it?

11 A. Yes.

12 133 Q. Yes. However, to whom did you owe the money?

13 A. To Guinness & Mahon.

14 134 Q. You owed the money to Guinness & Mahon?

15 A. Yes.

16 135 Q. When did you stop paying interest?

17 A. When did I start or stop?

18 136 Q. Paying interest, yes?

19 A. I presume it started pretty well straightaway, you

20 know. I don't know whether it was quarterely the

21 interest had to be paid. I can't remember the exact

22 details.

23 137 Q. Do you remember how much?

24 A. But interest was accruing, I know, from the start.

25 138 Q. Yes. Do you remember how much you were paying?

26 A. I think it was a reasonably high rate.

27 139 Q. No. Do you remember how much it was?

28 A. Not specifically, no.

29 140 Q. Approximately?

18
 1 A. I would say probably 10/12 percent. Probably 12

2 percent.

3 141 Q. How much did that come to?

4 A. Pardon?

5 142 Q. How much did that come to? What did you have to pay

6 by way of a cheque?

7 A. It could be £10,000.

8 143 Q. £10,000?

9 A. A quarter.

10 144 Q. A quarter?

11 A. Yes.

12 145 Q. Who did you pay this to?

13 A. Well, I recollect paying it to Guinness & Mahon in

14 the earlier stages.

15 146 Q. What do you mean by that?

16 A. Well, I was repaying Guinness & Mahon the interest.

17 147 Q. No, what do you recollect about the repayments of

18 the loan, Mr. Ferguson?

19 A. I recollect paying various sums of money to the

20 bank.

21 148 Q. To who?

22 A. To Guinness & Mahon.

23 149 Q. To the bank?

24 A. To the bank, yes.

25 150 Q. How were they paid? Were they paid to Mr. Traynor?

26 A. I can't remember offhand when he took over. Whether

27 they were being paid by post or ...(INTERJECTION).

28 151 Q. You cannot remember?

29 A. No, I can't remember.

19
 1 152 Q. At some stage did he take over?

2 A. At some stage he certainly took over, yes.

3 153 Q. Did you then pay him personally?

4 A. I paid him personally, yes.

5 154 Q. Used you go to his office?

6 A. Yes, yes.

7 155 Q. You went into his office?

8 A. I went into his office.

9 156 Q. And paid him a cheque?

10 A. That's right.

11 157 Q. Who was the cheque made payable to?

12 A. I would say to Guinness & Mahon in the earlier

13 stages.

14 158 Q. And the later stages?

15 A. The later stages it could have been, and certainly

16 in the final stages it was Ansbacher because they

17 had taken over the business.

18 159 Q. I want you to try and remember back when you think

19 you made the cheques payable firstly to

20 Guinness & Mahon and then who took over?

21 A. And to Ansbacher. That is all I remember. I mean

22 ...(INTERJECTION).

23 160 Q. You do not remember in between?

24 A. I don't remember in between or when that changed.

25 161 Q. No. However, you do not remember any other person

26 to whom the cheques were made payable?

27 A. No, I don't.

28 162 Q. Your recollection is that you made the cheques

29 payable to Guinness & Mahon?

20
 1 A. Yes.

2 163 Q. That is Guinness & Mahon Ireland Limited?

3 A. Yes.

4 164 Q. The Irish company?

5 A. Right, yes.

6 165 Q. And then to Ansbacher?

7 A. And then to Ansbacher.

8 166 Q. Yes?

9 A. Now, I did pass over various cheques.

10 167 Q. That is what I am coming to?

11 A. Sure. Okay.

12 168 Q. Apart from writing cheques did you pass over cheques

13 to him?

14 A. I did, certainly.

15 169 Q. What were these?

16 A. These were cheques that I would have received

17 myself.

18 170 Q. Yes?

19 A. Either as salary cheques.

20 171 Q. Yes?

21 A. Or cheques for sale of assets, which I had to do in

22 the later stages, you know.

23 172 Q. Yes?

24 A. It became difficult for us after a while.

25 173 Q. I know that, yes?

26 A. To ...(INTERJECTION).

27 174 Q. I will come to that, Mr. Ferguson?

28 A. Right. Okay.

29 175 Q. In addition to paying cheques you paid over cheques,

21
 1 endorsed over cheques to him?

2 A. Right.

3 176 Q. These would have been paid in his office?

4 A. Yes, yes.

5 177 Q. I want to come back, Mr. Ferguson, to the

6 circumstances in which you and your fellow Directors

7 became entitled to take up shares in

8 Atlantic Resources. Can you explain to me how that

9 happened?

10 A. Well, there were various rights issues from time to

11 time. Again, I am giving the general history of

12 Atlantic Resources.

13 178 Q. No, you need not, just come to the time when you

14 purchased shares?

15 A. Well, ...(INTERJECTION).

16 179 Q. When you took up these ...(INTERJECTION)?

17 A. Yes .

18 180 Q. When you made this borrowing of £375,000 to purchase

19 shares ?

20 A. Yes, my recollection is that there had been a rights

21 issue or a placement some time previously.

22 181 Q. Yes?

23 A. At that stage we were not able to take up our

24 entitlements or to support the share issue through

25 lack of funds, through lack of available funds.

26 182 Q. Yes?

27 A. It was a very speculative company at all stages. It

28 always required you to raise fairly considerable

29 sums of money to stay in business. These issue

22
 1 share issues would have been underwritten by

2 stockbrokers and various investment houses. It was

3 not regarded by them as favourable if Directors were

4 not seen to be taking up their shares. It was a

5 black mark against the company if the Directors were

6 not seen to support it. We did support it as best

7 we could but at that final stage there in 1984 we

8 couldn't, in fact, it was the end of 1983 and we

9 couldn't support it. We didn't have the funds.

10 183 Q. Yes?

11 A. My recollection is that a lot of shares were left

12 with the underwriters and were hanging over the

13 market and this is when we decided we should buy

14 some of these shares. That is it.

15 184 Q. However, it was completely hidden from the public

16 and from everybody that the Directors were buying

17 these shares?

18 A. That particular lot, yes, that is true.

19 185 Q. However, then there was no reason why you should buy

20 the shares in order to give confidence to the

21 public. It did not apply in this case?

22 A. Well, it meant that these shares were available to

23 us that otherwise might be sold on the market and

24 over a long period of time.

25 186 Q. Yes?

26 A. They were available to us and we felt that we should

27 support the issue.

28 187 Q. I am only just ...(INTERJECTION)?

29 A. Yes, sorry.

23
 1 188 Q. I am only just asking you about the reason that you

2 gave. It is invalid in this instance?

3 A. It is not valid in the sense of the public

4 awareness.

5 189 Q. Yes, very well?

6 A. But it was valid in the sense that the underwriters

7 were aware that the shares had been taken up.

8 190 Q. Yes?

9 A. On the market.

10 191 Q. Yes?

11 A. Yes.

12 192 Q. Can you be more specific about the date on which

13 this occurred?

14 A. I think it was early March/April 1984.

15 193 Q. March or April of 1984, you think?

16 A. I think so, yes.

17 194 Q. I just take it that you have made enquires about

18 this or you have checked it out, have you?

19 A. Pardon?

20 195 Q. You have checked it out, have you? Is that pretty

21 definite, March or April 1984?

22 A. I haven't been able, it has been difficult to get

23 information because I haven't been able to get any

24 information from them.

25 196 Q. However, your recollection is that it was March or

26 April of 1984?

27 A. My understanding is, after talking with my

28 colleagues.

29 197 Q. Yes?

24
 1 A. Yes, that ...(INTERJECTION).

2 198 Q. Would there be any records of this in the company of

3 these shares been purchased by the three of you?

4 Would there be a record in the company?

5 A. There should be a record in Atlantic Resources of

6 various share transactions.

7 199 Q. Yes?

8 A. My understanding is that it has not been possible to

9 identify these particular purchases that we made.

10 200 Q. Why is that?

11 A. I don't know.

12 201 Q. I think you do know, Mr. Ferguson?

13 A. Pardon?

14 202 Q. I think you do know?

15 A. I don't honestly know. I mean ...(INTERJECTION).

16 203 Q. Because the shares were not taken in the name of

17 Coral Reef Securities, were they?

18 A. No, apparently not.

19 204 Q. Is that not the reason?

20 A. That is the reason -- no, you could still try and

21 identify the numbers of shares.

22 205 Q. No, but for some reason ...(INTERJECTION)?

23 A. Or the quantity of shares.

24 206 Q. I take it that you do not know why

25 Coral Reef Securities did not take up the shares.

26 They were the nominee company?

27 A. Yes. No, I only became aware of that quite

28 recently.

29 207 Q. Yes, and that is the reason why you are not able to

25
 1 identify who took up the shares. You do not know

2 the name of the company, is that it?

3 A. I don't know the name of the company that actually

4 took up the shares. I assumed that it

5 was Coral Reef.

6 208 Q. Yes?

7 A. But that hasn't appeared in the register.

8 209 Q. Yes?

9 A. Also ...(INTERJECTION).

10 210 Q. Did you look in the register?

11 A. Yes.

12 211 Q. Did you check the register?

13 A. The register was searched.

14 212 Q. Yes, on your instructions?

15 A. On my behalf, yes.

16 213 Q. What came up?

17 A. Well, they couldn't identify any particular numbers

18 of shares that equated, the sums, the amounts of

19 share that we had purchased.

20 214 Q. Who could not?

21 A. The register.

22 215 Q. Who did this on your behalf?

23 A. I can't honestly say. I think the solicitors did

24 it.

25 216 Q. The solicitors did it?

26 A. Yes.

27 217 Q. I see. You had advisors, Mr. Corcoran, is that

28 right?

29 A. Mr. Corcoran, yes. He was certainly

26
 1 ...(INTERJECTION).

2 218 Q. Did he do it. Did he look, do you know?

3 A. I think he did.

4 219 Q. Yes?

5 A. I think he did. I was told that it couldn't be

6 identified, those particular shares that we had

7 purchased.

8 220 Q. Yes?

9 A. Whether they were amalgamated with other purchases

10 at the same time or...(INTERJECTION).

11 221 Q. What I want to know is: How is it that it came

12 about that you purchased the shares at £1.20 in

13 March or April of 1984? How was that price fixed?

14 A. I can't remember. My understanding was that was the

15 market price at the time.

16 222 Q. You were not buying shares in the market, is that

17 right?

18 A. Pardon?

19 223 Q. You were not buying shares in the market? You were

20 taking up shares out of an issue, is that not right?

21 A. No, not specifically because the shares had not been

22 taken up in the placing. They were still available

23 through the underwriters.

24 224 Q. You were taking them from underwriters?

25 A. I assumed so. Now, to me that is through the market

26 in my understanding.

27 225 Q. Very well?

28 A. Yes.

29 226 Q. Yes. The underwriters had shares?

27
 1 A. Yes.

2 227 Q. If Coral Reef Securities got these shares they got

3 them from the underwriters, is that your

4 understanding?

5 A. That is my understanding, yes.

6 228 Q. Would the underwriters have sold the shares to

7 Coral Reef at the market price, at the then market

8 price?

9 A. Well, the market price may have been the placing

10 price. I am not quite sure of that.

11 229 Q. You see I understood, Mr. Ferguson, and correct me

12 if I am wrong, but this was a placement of shares

13 which had been issued but had not yet been taken up.

14 They were then issued to you by the company, is that

15 wrong?

16 A. I don't honestly know, I can't answer that question.

17 I don't honestly know. My own assumption was that

18 the shares had failed to be placed by the

19 underwriters and were still with the underwriters.

20 230 Q. But were they placed ...(INTERJECTION)?

21 A. But my ...(INTERJECTION).

22 231 Q. Were they placed then to you and your fellow

23 Directors at the price in which they were originally

24 offered, at £1.20? Were they originally offered

25 at £1.20?

26 A. I think that is the figure, yes.

27 232 Q. Was that the price they were originally offered?

28 A. Yes, they were originally offered at £6 a share but

29 there had been a share split by five.

28
 1 233 Q. Yes?

2 A. Which would be equivalent to £1.20.

3 234 Q. They were £1.20?

4 A. Yes.

5 235 Q. You then and your fellow Directors were able to buy

6 the shares, obtain the shares, at £1.20?

7 A. Yes.

8 236 Q. That was from the underwriters?

9 A. Well, through the market.

10 237 Q. Through the market?

11 A. Yes.

12 238 Q. Yes?

13 A. From the underwriters, yes.

14 239 Q. Why I ask you these questions, Mr. Ferguson, is that

15 from information that we have got it would appear

16 that the price, the market price, of the shares was

17 a great deal more than that at that time. Do you

18 know that?

19 A. I don't, no.

20 240 Q. You do not?

21 A. No, I don't. I assumed the price had gone down to

22 be honest with you.

23 241 Q. Yes?

24 A. Because certainly they were -- we were under water

25 with our borrowings very shortly after the

26 borrowings were taken out.

27 242 Q. I just want to refer you to a document?

28 A. Yes.

29 243 Q. I will explain to you in a moment what it is

29
 1 (Same Handed)?

2 A. Thank you.

3 244 Q. This is a ledger of Guinness & Mahon (Exhibit 1)?

4 A. Yes.

5 245 Q. The account is in the name of "Guinness & Mahon

6 Cayman Trust College" and it is a call account. It

7 is a sterling account?

8 A. Yes.

9 246 Q. You will see down there on the 20th February 1984?

10 A. Yes.

11 247 Q. "5,750 Atlantic Resources shares were sold at

12 £39,020"?

13 A. Yes.

14 248 Q. Further down in March 1984 there were 4,000

15 Atlantic Resources were sold at £20,660.50?

16 A. Yes.

17 249 Q. In rough figures about £5 a share.

18 A. I can only assume that was after the split.

19 250 Q. I beg your pardon?

20 A. I can only assume that that was after the

21 subdivision of the shares by five. I mean

22 ...(INTERJECTION).

23 251 Q. It would appear that you bought the shares around

24 about the same time at £1.20 a share?

25 A. I don't know the exact date of the actual

26 subdivision of the shares.

27 252 Q. No, I am not talking about the price though. I am

28 talking about the price that you paid for the

29 shares?

30
 1 A. Well, there was no way that we bought shares at

2 £1.20 and they were being sold at the same time

3 at £6 a share.

4 253 Q. I see. That could not be?

5 A. That couldn't be, no.

6 254 Q. Very well. We can leave it then at that. Before I

7 go further in relation to these transactions

8 Mr. Ferguson I want to ask you about the documents

9 and the records that you have about them?

10 A. Yes, Judge, yes.

11 255 Q. Your statement contained a number of documents?

12 A. Yes.

13 256 Q. Which were, in fact, the same documents that your

14 colleague Mr. McCarthy gave us in his statement.

15 Were you aware of that?

16 A. Well, in fact, I got these copies from Mr. McCarthy.

17 257 Q. Yes?

18 A. The ones I was able to discover in my own right were

19 all dated from 1990 onwards.

20 258 Q. Yes. I think you have three or so copy letters?

21 A. That's right.

22 259 Q. There are in relation to Coral?

23 A. That's right.

24 260 Q. To Coral Reef Securities?

25 A. Yes.

26 261 Q. However, all the others are from

27 Mr. McCarthy's file?

28 A. Yes.

29 262 Q. I want you to tell me why that is so Mr. Ferguson?

31
 1 Why is that so?

2 A. Because I wasn't able to find any records. I didn't

3 keep the records. I mean I am not a great record

4 keeper, Judge, I have to say.

5 263 Q. Where did you keep the records of these?

6 A. At home.

7 264 Q. In your home?

8 A. In my home, yes.

9 265 Q. Not in your office?

10 A. Not in my office, no, but I didn't have an office

11 since 1989 really.

12 266 Q. Since 1989?

13 A. Yes.

14 267 Q. Up to 1989 where was your office?

15 A. I was in Fitzwilton in Hatch Street.

16 268 Q. Did you have records in relation to your investments

17 in Hatch Street, in your Hatch Street offices?

18 A. Not really, no, no.

19 269 Q. Where were they then?

20 A. At home in my house, wherever I was.

21 270 Q. All your own private records were at home, is that

22 it?

23 A. Yes.

24 271 Q. Yes. Presumably you kept a record of the

25 substantial sum of money that you had borrowed. Did

26 you keep records in relation to it?

27 A. I didn't keep records, Judge. I mean I knew exactly

28 what my liability was.

29 272 Q. Did you keep correspondence?

32
 1 A. I kept some correspondence in the later period.

2 273 Q. Well, ...(INTERJECTION)?

3 A. I mean I moved house several times.

4 274 Q. Just listen to the question, Mr. Ferguson?

5 A. Sorry, Judge, sorry.

6 275 Q. I think you got correspondence from Mr. Traynor or

7 from Coral Reef Securities or from your colleagues

8 about this. Did you keep the letters?

9 A. No, no.

10 276 Q. You destroyed all the letters?

11 A. Well, once I got the gist of what was being said --

12 I mean these were, if you like, transitory letters

13 dealing with the on-going situation.

14 277 Q. What happened then? You destroyed all the letters?

15 A. Well, I think that they would have been disposed of,

16 or thrown out or whatever, you know.

17 278 Q. No, I do not know, Mr. Ferguson?

18 A. Sorry, Judge.

19 279 Q. What did you do?

20 A. Sorry.

21 280 Q. What did you do?

22 A. I tend to clear out my correspondence quite

23 regularly.

24 281 Q. No, I am ...(INTERJECTION)?

25 A. I do destroy a lot or dispose of a lot of what

26 I regard as superfluous pieces of paper.

27 282 Q. Would documents relating to this mounting debt, that

28 started off at £375,000, be superfluous in your

29 view?

33
 1 A. Well, I would have a pretty fair idea

2 ...(INTERJECTION).

3 283 Q. However, what I what to know is was it superfluous

4 and did you destroy them?

5 A. Well, they confirmed what I felt.

6 284 Q. Were they superfluous and did you destroy them?

7 A. Yes, they were superfluous and I did destroy them.

8 285 Q. When did you destroy them?

9 A. Very shortly after I got them usually.

10 286 Q. I see. You have no records at all in relation to

11 the original loan of £375,000?

12 A. Well, I did get a letter, which I requested, which

13 is in the file here.

14 287 Q. No, no. Do not bother about the file?

15 A. Yes.

16 288 Q. Because you have told me that you have just got

17 those?

18 A. Yes.

19 289 Q. From Mr. McCarthy?

20 A. No, it is not that one that I am talking about now.

21 290 Q. From Coral Reef. You asked for those, did you?

22 A. I asked for this particular one.

23 291 Q. Which one did you ask for?

24 A. It is dated 2nd March 1992. I asked for the details

25 ...(INTERJECTION).

26 292 Q. Just one moment. Let me find it?

27 A. Sorry.

28 293 Q. Just let me see it.

29 A. Sorry.

34
 1 294 Q. March 1992?

2 A. Yes.

3 295 Q. This is "Ansbacher"?

4 A. It is "Ansbacher".

5 296 Q. I asked Mr. Traynor to provide me with my overall

6 position in regard to Coral Reef?

7 297 Q. Sorry, I am ...(INTERJECTION)?

8 A. It is a memorandum, yes. It was a memorandum from

9 Mr. Traynor to Mr. Furze (Exhibit 2).

10 298 Q. Yes. You asked Mr. Traynor for that?

11 A. Yes.

12 299 Q. Presumably you asked him and he sent it to you from

13 Mr. Furze then?

14 A. Yes.

15 300 Q. When did you ask Mr. Traynor for that?

16 A. Well, very shortly before I got it.

17 301 Q. Yes?

18 A. Yes.

19 302 Q. You were in touch with Mr. Traynor asking for the

20 documents. What about the next one, 15th October

21 1992? That is addressed to Mr. Traynor?

22 A. Yes.

23 303 Q. How have we got that now? How did it come about

24 that you have been able to give us a copy of it?

25 A. Well, Mr. Traynor gave me a copy of it.

26 304 Q. Yes, in 1992?

27 A. In 1992, yes.

28 305 Q. And you kept it?

29 A. I kept it. I mean very specifically if you look at

35
 1 last paragraph in that letter.

2 306 Q. Where was it kept, Mr. Ferguson?

3 A. It was kept at home.

4 307 Q. Was it kept in a file at home?

5 A. Yes.

6 308 Q. What was the file marked?

7 A. No, it wasn't marked.

8 309 Q. It was not marked?

9 A. It wasn't marked, no.

10 310 Q. Are these the only letters in the file?

11 A. These are the only letters that I kept, Judge.

12 311 Q. Were there other letters there?

13 A. There would have been others letters from time to

14 time.

15 312 Q. No, I am just talking now between March 1992

16 and October 1992?

17 A. I don't recollect. I don't think so.

18 313 Q. You do not think there were other letters?

19 A. Well, can I say why I kept this particular letter.

20 314 Q. Yes?

21 A. Because in the last paragraph he hints that; "action

22 may be taken to recover the loans".

23 315 Q. Yes?

24 A. And that was an important factor in my mind.

25 316 Q. Yes. Do you see in May 1993?

26 A. Yes.

27 317 Q. There is a letter written to you?

28 A. Yes, that's right.

29 318 Q. You kept that?

36
 1 A. I kept that.

2 319 Q. Was there letters in between that you may have

3 destroyed?

4 A. There may have been in relation to minor details

5 about interest.

6 320 Q. Yes?

7 A. Being ...(INTERJECTION).

8 321 Q. And did you keep any ...(INTERJECTION)?

9 A. That was an important letter to me as well, Judge, I

10 have to say.

11 322 Q. Did you keep any letters after? Did you receive any

12 further letters after 1993?

13 A. I don't think so, no.

14 323 Q. You do not think that you received any further

15 letters?

16 A. I don't think so, no. I mean if I can elaborate a

17 little bit?

18 324 Q. Yes?

19 A. I was in contact with Dr. O'Reilly at that stage.

20 325 Q. Yes?

21 A. Because I had been under increasing pressure to

22 repay the loans due.

23 326 Q. Yes?

24 A. I had sold my house. I had sold various other

25 assets to meet these liabilities and other

26 liabilities. I was reaching the pin of my collar in

27 terms that I had no other resources that I could

28 call on. He had provided a guarantee, as you know,

29 for the second loan, the Ascot loan. I discussed

 1 with him that I was under increasing pressure on the

2 Coral Reef loan, which he didn't guarantee. He

3 hadn't guaranteed that. He said that he would look

4 into it on my behalf and obviously he took care of

5 it. He made a settlement. I know that he made a

6 settlement which I heard later in regard to Coral

7 Reef.

8 327 Q. Did he write and inform you of this?

9 A. No.

10 328 Q. How did you hear it?

11 A. I heard it through Mr. Corcoran.

12 329 Q. From Mr. Corcoran?

13 A. Yes.

14 330 Q. Were you in touch with Mr. Corcoran?

15 A. Pardon?

16 331 Q. Were you in touch with Mr. Corcoran about this?

17 A. Only recently, yes.

18 332 Q. However, I mean about Mr. O'Reilly paying it?

19 A. Yes.

20 333 Q. Mr. O'Reilly making the payment?

21 A. Yes.

22 334 Q. I assumed he had made a settlement because he had

23 told me not to worry about it?

24 335 Q. Yes. Did Mr. Corcoran tell you that?

25 A. He told me that a settlement had been made.

26 336 Q. Yes?

27 A. At a considerably smaller sum to my understanding.

28 337 Q. I see. I want you to give us evidence now about

29 Ascot Holdings?

38
 1 A. Right.

2 338 Q. When was the loan, this further loan, made? In what

3 year and about when?

4 A. I think 1986.

5 339 Q. 1986?

6 A. 1986, yes.

7 340 Q. Tell us how it came about?

8 A. Well, we were under increasing pressure in regard to

9 the original loans. We were very much under water

10 in terms of the assets backing the loans. In

11 discussing with Mr. Traynor -- and I am not saying

12 that he suggested that we borrow more money -- we

13 felt that he would be receptive to a further loan

14 which we would use to buy a more solid share, if you

15 like, being Fitzwilton primarily. He was quite

16 willing to structure that loan because it enabled

17 him to use some of the loan to repay some of the

18 other liabilities on Coral Reef and the other

19 companies.

20 341 Q. Did you have discussions personally with Mr. Traynor

21 about this?

22 A. We did.

23 342 Q. No, do not bother about "we" Mr. Ferguson?

24 A. Sorry.

25 343 Q. I know witnesses say that and Judges get irascible

26 when they do?

27 A. Sorry.

28 344 Q. I want you to tell me what happened?

29 A. Right.
 1 345 Q. You saw Mr. Traynor. You talked to Mr. Traynor.

2 Would you tell us what was agreed?

3 A. It was agreed that he would make another loan on

4 foot of Fitzwilton shares. I don't know whether he

5 told us, told me, at the time that some of the

6 proceeds would be used to defray the original loans.

7 34 6 Q. How much was the loan that you were

8 ...(INTERJECTION)?

9 A. £1 million.

10 347 Q. No, that was not the original loan?

11 A. Pardon?

12 348 Q. In 1986. Was it £1 million?

13 A. £1 million, yes.

14 349 Q. £1 million. I see?

15 A. This is the Ascot loan.

16 350 Q. This is the Ascot one?

17 A. Yes.

18 351 Q. Did Mr. Traynor tell you how the loan was going to

19 be structured, and how it was going to be brought

20 about, and what companies were going to be involved

21 in it?

22 A. I can't remember whether he -- Ascot was the company

23 that was chosen. Whether he told us initially or

24 whether it happened afterwards I don't know.

25 352 Q. Ascot holdings?

26 A. Ascot Holdings, yes.

27 353 Q. Did you know where Ascot was registered?

28 A. Well, I assumed it was in the Caymans.

29 354 Q. Why did you assume that?

40
 1 A. Because the other companies had been in the Caymans.

2 355 Q. What other companies?

3 A. Well, Coral Reef.

4 356 Q. Was in the Caymans?

5 A. Yes.

6 357 Q. Did you know that the loan to Ascot and Coral Reef

7 was coming from the bank in the Caymans?

8 A. I knew the Ascot loan was coming from the Caymans.

9 358 Q. In 1986?

10 A. In 1986.

11 359 Q. Yes?

12 A. I knew the other loan had come from the Caymans.

13 360 Q. Yes?

14 A. But that was after the event, after the initial

15 event.

16 361 Q. Yes. The million pounds loan to Ascot was for what

17 purpose?

18 A. It was to buy shares in a more solid situation.

19 362 Q. Yes?

20 A. Other than Atlantic.

21 363 Q. Yes. What were they? These were Fitzwilton?

22 A. Fitzwilton, yes.

23 364 Q. Yes. Did that happen then? Did they buy shares?

24 A. Yes.

25 365 Q. How many shares did they buy?

26 A. I haven't been able to find out the exact number,

27 sir, but I have seen a figure of 475,000 shares. I

28 don't remember the price at the time but they would

29 have been bought at market price in the market.

41
 1 366 Q. This was an arrangement that was entered into

2 between the three of you, Mr. McCarthy, Mr. Collins

3 and yourself?

4 A. That's right.

5 367 Q. And Mr. Traynor?

6 A. Yes.

7 368 Q. Were you all then equally entitled to a third each?

8 A. Yes.

9 369 Q. In the shares?

10 A. That's right, yes.

11 370 Q. Did you regard yourself then from then on as a

12 beneficial owner of the shares that Ascot Holdings

13 held?

14 A. Yes.

15 371 Q. To the extent of a third?

16 A. To the extent of one third, yes.

17 372 Q. Yes. Did Mr. Traynor not give you an account from

18 time to time of the company or what shares it was

19 buying and what shares it was selling, and how it

20 was doing in relation to discharging the debt that

21 you owed, and each of your colleagues owed, did he?

22 A. He did. I am sure he did.

23 373 Q. What has come of those?

24 A. Pardon?

25 374 Q. What has become of those records?

26 A. I haven't got them, Judge. I presume I destroyed

27 them again.

28 375 Q. You destroyed them?

29 A. Yes.

42
 1 376 Q. When you say, "you presume," do you have no

2 recollection of this at all?

3 A. Well, I haven't been able to find them.

4 377 Q. No, but have you no recollection of getting

5 documents and destroying them?

6 A. Not as such, no. Not of destroying them. As I said

7 I would have a pile of correspondence relating to

8 various issues that were ...(INTERJECTION).

9 378 Q. That is what I would have thought. I would have

10 thought there would have been a very considerable

11 amount of correspondence telling you how Ascot was

12 doing; what shares it had bought and what it had

13 sold; what money had been transferred to relieve

14 your debt?

15 A. No, when I mean by a considerable pile of

16 correspondence it would relate to all kinds of

17 different issues.

18 379 Q. I see?

19 A. And involvements.

20 380 Q. I see?

21 A. I mean there was never that many letters in regard

22 to our dealings in Ascot.

23 381 Q. I see. When you say "a pile of correspondence" it

24 is nothing to do with what we are concerned with?

25 A. No, no.

26 382 Q. I see?

27 A. No, no.

28 383 Q. If there was not a pile of correspondence, if there

29 was not much correspondence, you at any rate knew

43
 1 that Ascot were buying and selling shares?

2 A. Yes.

3 384 Q. They were two shares. They were Fitzwilton shares

4 and they were Atlantic Resources also, is that not

5 right?

6 A. That's right, yes.

7 385 Q. They bought Atlantic Resources and it sold Atlantic

8 Resources?

9 A. Yes.

10 386 Q. It bought Fitzwilton and did it sell Fitzwilton from

11 time to time?

12 A. Yes, apparently so.

13 387 Q. Yes?

14 A. Again, I have to say, Judge, it is hard for me to

15 explain but we really had lost control of those.

16 388 Q. Yes?

17 A. Of those accounts.

18 389 Q. Yes?

19 A. At that stage.

20 390 Q. Yes?

21 A. We were very much at the discretion of what

22 Guinness & Mahon decided to do.

23 391 Q. Yes?

24 A. In regard to reducing our liabilities.

25 392 Q. Yes. Mr. Ferguson, I think we will break now. If

26 that is all right with you?

27 A. Yes.

28 393 Q. We will break for a cup of coffee for about ten

29 minutes or so?

44
Certainly. Thank you Judge.

SHORT ADJOURNMENT:
 1 THE HEARING RESUMED AFTER SHORT ADJOURNMENT.

3 394 Q. MR. JUSTICE COSTELLO: Mr. Ferguson, I want to

4 return now briefly

5 to Ascot for a few moments?

6 A. Yes.

7 395 Q. The Ascot situation was from 1986 onwards. It was

8 buying and selling these Fitzwilton shares and

9 Atlantic Holdings, is that it?

10 A. Yes.

11 396 Q. You were not registered as the owner of any interest

12 in any of the shares?

13 A. No, no.

14 397 Q. I think the shares in Ascot were in the name of

15 "Overseas Nominees Limited"; is that right?

16 A. I don't know.

17 398 Q. It is in the correspondence?

18 A. Sorry, yes.

19 399 Q. You referred to it?

20 A. I am sure that you are right.

21 400 Q. Did you not check that out?

22 A. Well, I did read the correspondence.

23 401 Q. Sorry?

24 A. But I can't remember.

25 4 02 Q. You cannot remember?

26 A. Yes.

27 403 Q. I think that it is in your statement too?

28 A. Is it?

29 404 Q. Yes?

46
 1 A. Fair enough, yes.

2 405 Q. Would I be correct then in saying that you did not

3 enter in the share register of

4 Ascot Holdings Limited or of Fitzwilton any

5 interest, any equitable interest, in the shares?

6 A. Not in Fitzwilton, no.

7 406 Q. Or in Atlantic Resources?

8 A. No, no.

9 407 Q. Did you have an accountant, a personal accountant,

10 who was looking after your own income tax affairs?

11 A. Yes, yes.

12 408 Q. Do you know did you inform him of your interest in

13 these shares?

14 A. No.

15 409 Q. You did not?

16 A. No, Judge, no.

17 410 Q. There would be no return made to The Revenue of

18 anything to do with these shares?

19 A. No, no.

20 411 Q. Any interest that might have been earned on the

21 shares were not returned and any capital gains were

22 not returned?

23 A. No, Judge. I am not sure whether any capital gains

24 ...(INTERJECTION).

25 412 Q. Were made?

26 A. Arose.

27 413 Q. Yes.

28 A. But certainly there would have been

29 ...(INTERJECTION).

47
 1 414 Q. However, anyway there were no returns?

2 A. There would have been dividend income that is for

3 sure.

4 415 Q. Dividend income?

5 A. Yes .

6 416 Q. There would have been?

7 A. Yes, yes.

8 417 Q. Do you know what happened to these shares? Did you

9 receive them ever? Did they come into your

10 possession?

11 A. Never, never.

12 418 Q. They were never registered in your name?

13 A. No, Judge, no.

14 419 Q. When Mr. O'Reilly paid off the debt of

15 Coral Reef Securities, you do not know what happened

16 to the shares that it owned?

17 A. I don't. I assumed the guarantor got the benefit of

18 them.

19 420 Q. Yes. Similarly, in relation to the shares which

20 Ascot had held, you never got any ...(INTERJECTION)?

21 A. I never got any.

22 421 Q. Yes. Very well. Thank you. Thank you

23 Mr. Ferguson. Mr. Rowan would like to ask you a

24 few questions?

25 A. Thank you, Judge.

26 END OF EXAMINATION OF MR. FERGUSON BY MR. JUSTICE

27 COSTELLO.

28

29
 1 MR. FERGUSON WAS EXAMINED, AS FOLLOWS, BY MR. ROWAN.

3 422 Q. MR. ROWAN: Good morning Mr. Ferguson.

4 A. Good morning, Mr. Rowan.

5 423 Q. Mr. Ferguson, am I right in believing that at some

6 stage you were a Director of The Central Bank?

7 A. Yes.

8 424 Q. When was that please?

9 A. I can't give the exact dates Mr. Rowan but I think

10 from possibly the late 1970's up to the late 1980's.

11 I can find out for you but it was during the 1980's

12 mainly.

13 425 Q. Principally during the 1980's?

14 A. Yes.

15 426 Q. You indicated to us earlier that Fitzwilton made an

16 investment in Atlantic Resources?

17 A. Yes.

18 427 Q. Approximately when?

19 A. I think 1981 or it could have been earlier. It

20 could have been 1980. It was, I think, 1981.

21 428 Q. Yes?

22 A. Atlantic ...(INTERJECTION).

23 429 Q. I see, sorry?

24 A. Atlantic Resources was formed. That was the date it

25 was formed.

26 430 Q. Around 1981?

27 A. Around 1981 to my recollection. It could have been

28 1980 but I think it was 1981.

29 431 Q. Was the investment by Fitzwilton part of the

49
 1 original capital which was introduced into Atlantic?

2 A. Yes, yes.

3 432 Q. What proportion of the shares did Fitzwilton hold at

4 that stage?

5 A. I can't remember the exact number but

6 ...(INTERJECTION).

7 433 Q. Roughly?

8 A. I have a feeling it may have been around 20 percent.

9 434 Q. Who would have been the other major shareholders?

10 A. The major shareholders would have been the

11 Directors, the original Directors, and individuals

12 who, if you like, started the company

13 Atlantic Resources, including Dr. O'Reilly, myself,

14 Mr. McCarthy, Mr. Collins and various other people.

15 I mean I can find that out for you in detail because

16 the original memorandum and articles of association

17 would show.

18 435 Q. Was the company formed as a public company?

19 A. Yes, yes.

20 436 Q. There would have been a public advertisement?

21 A. Yes, that's right. That's right.

22 437 Q. Yes. If one took the Fitzwilton investment plus the

23 personal holdings of yourself and Mr. McCarthy and

24 Mr. O'Reilly and others who were close to you and

25 that group of individuals, what proportion of

26 Atlantic Resources shares might have been held at

27 the quotation date by those shareholders, plus

28 Fitzwilton?

29 A. I can't honestly say.

 1 438 Q. Would it have been more than 50 percent?

2 A. There was a public placing as far as I remember. It

3 was have been more than 50 percent originally.

4 439 Q. Yes?

5 A. There were other Directors such

6 as Mr. James Stafford and Mr. Gerry McGuinness.

7 They weren't all Fitzwilton Directors. There were

8 other people as Directors also. They originally

9 formed the company and placed a number of shares

10 with the general public but I can't remember the

11 proportion. I would say probably up to 50 percent.

12 440 Q. Would you please obtain this information for us?

13 A. Certainly, yes.

14 441 Q. And let us have it?

15 A. Yes, sure.

16 442 Q. In due course?

17 A. Of course, Mr. Rowan, yes.

18 443 Q. Thank you. You became a Director of

19 Atlantic Resources at that time?

20 A. At that time, yes.

21 444 Q. Around 1981?

22 A. Around 1981, yes.

23 445 Q. Could I ask you please to turn to the documents that

24 you sent us?

25 A. Yes.

26 446 Q. It was the memorandum, which we looked at earlier,

27 from Mr. Traynor to Mr. Furze regarding Coral Reef

28 Securities (Exhibit 2)?

29 A. Right, yes.

51
 1 447 Q. This was the one, which I think you explained to the

2 Judge, that you had obtained from Mr. Traynor to

3 give you ...(INTERJECTION)?

4 A. I requested it from him, yes.

5 448 Q. Right?

6 A. Yes.

7 449 Q. What we can see on that is that there

8 was £374,000 advanced?

9 A. Yes.

10 450 Q. Which I take to be the original cost of the shares?

11 A. Right.

12 451 Q. In your statement to us that acquired 344,333

13 shares?

14 A. Right.

15 452 Q. Then over the period you paid -- there was interest

16 charged of £234,196?

17 A. Right.

18 453 Q. Therefore, at that point you had made an investment,

19 and when I say, "that point," I take this memorandum

20 to be written sometime around 1991, in the running

21 order of your papers?

22 A. Well, March 1992 is the date of it. It is

23 underneath the signature.

24 454 Q. Yes. That is quite right. March 1992?

25 A. Yes.

26 455 Q. By March 1992 the original loan had incurred

27 interest of £234,196?

28 A. Right.

29 456 Q. Which meant that at that stage you had a total

52
 1 investment, if you like, in those 344,000 shares of

2 £609,000 approximately?

3 A. That's right Mr. Rowan, yes.

4 457 Q. You still held the shares?

5 A. Yes. Well, yes, I did.

6 458 Q. How much might they have been worth, do you think,

7 in March 1992 per share?

8 A. I would say considerably less than the original

9 cost, never mind the £600,000. I don't know. They

10 could have been worth maybe £50,000/£100,000.

11 459 Q. Yes. In some of the other papers we see shares

12 being sold, the Atlantic shares being sold at lOp

13 and lip?

14 A. Yes.

15 460 Q. Had they improved a bit by 1992?

16 A. I don't think so. I don't think so.

17 461 Q. If we say sort of £30,000 to £50,000 they might have

18 been worth, those 300,000 shares?

19 A. Yes.

20 462 Q. Then you could, if you had sold the shares, have

21 reduced your loss to about £550,000 or £560,000?

22 A. Right.

23 463 Q. Would you agree with that?

24 A. Yes, yes.

25 464 Q. I see. That is an incredible amount of money?

26 A. Yes, unfortunately, yes.

27 465 Q. By 1992 you still held those shares?

28 A. Yes.

29 466 Q. How long did you hold them for after that?

53
 1 A. Well, I never really had them physically myself

2 if you know what I mean. They were held

3 by Guinness & Mahon.

4 467 Q. Yes?

5 A. Now "Ansbacher".

6 468 Q. Yes. They were held in Coral Reef Securities?

7 A. Yes.

8 469 Q. How long did Coral Reef Securities continue to hold

9 the shares?

10 A. I don't know. I don't know. I never saw those

11 shares at any time because of the fact that this

12 loan was taken out for me.

13 470 Q. However, in one of the other documents, which we

14 looked at earlier, the letter to you of the

15 27th May 1993, (Exhibit 4)?

16 A. Right, yes.

17 471 Q. Which is from Mr. Traynor to yourself

18 regarding Coral Reef?

19 A. Right.

20 472 Q. In the third paragraph he says:

21 "I wish to confirm however indicating

to you that in the event that interest
22 is not paid up to date in connection
with Ascot, it is very likely and
23 logical that Cayman would then feel
that there is no point in waiting until
24 the 30th September before taking action
under foot of Coral Reef."
25

26 A. Yes.

27 473 Q. That sounds pretty threatening to me?

28 A. Absolutely, and it did to me as well.

29 474 Q. Yes?

54
 1 A. Yes .

2 475 Q. What happened then about Coral Reef?

3 A. Well, I discussed the situation with Dr. O'Reilly

4 and his representatives. He was already guarantor

5 of the Ascot loan. I said; "I am under severe

6 pressure on this original Coral Reef loan." So, he

7 said, "Look, I will do what I can for you." I heard

8 much later that a settlement had been reached in

9 regard to my liability to Coral Reef and I assumed

10 that he took possession of the shares.

11 476 Q. However, you never actually personally followed this

12 up?

13 A. I was aware that I stopped getting pressure, if you

14 like. So, I assumed that he was either in

15 negotiations or was certainly acting on my behalf in

16 regard to this loan.

17 477 Q. We knew that in due course the O'Reilly family made

18 a gift which sorted out all of this?

19 A. No, no, I don't think so. Not in my case.

20 478 Q. I see?

21 A. Yes, I think that was probably in Mr. McCarthy's

22 case.

23 479 Q. I see?

24 A. Yes .

25 480 Q. Forgive me.

26 A. Yes .

27 481 Q. However, if you asked Dr. O'Reilly to do something

28 to help you about this -- I mean, give us some more

29 information about that conversation and what he

 1 might have said in response?

2 A. Yes.

3 482 Q. I mean in particular what he said about the shares?

4 A. Well, I made him aware of the problem.

5 483 Q. Yes?

6 A. He said, "I will look into it for you. See what can

7 be done." As far as I was concerned if he was

8 taking me out of the problem he was obviously

9 entitled to take the shares as well, at the very

10 small value they were at that stage. He is not the

11 kind of man that you question him often, "How are

12 things going on this front?" I mean he is a very

13 busy man. All I knew was that he was taking care of

14 it because I stopped getting these letters

15 threatening action?

16 MR. JUSTICE COSTELLO: Yes.

17 A. Is it appropriate for me to say something about my

18 relationship with Dr. O'Reilly?

19 484 Q. MR. JUSTICE COSTELLO: You were a friend of

20 Dr. O'Reilly. You were

21 close friends, is that right?

22 A. That's right.

23 485 Q. MR. JUSTICE COSTELLO: This was a friend who was

24 ...(INTERJECTION)?

25 A. Well, I was also a very special business confidant.

26 486 Q. MR. JUSTICE COSTELLO: Yes?

27 A. In the sense that I introduced him to the

28 Heinz Company.

29 487 Q. MR. JUSTICE COSTELLO: Yes?

56
 1 A. And I originated the Fitzwilton investment.

2 MR. JUSTICE COSTELLO: I see.

3 A. Which enabled him to buy The Independent Newspaper

4 group.

5 488 Q. MR. JUSTICE COSTELLO: Yes?

6 A. He regarded me as one of the cornerstones of his

7 successful career.

8 MR. JUSTICE COSTELLO: Of his career?

9 A. So, you know, I just wanted to make that point

10 clear.

11 MR. JUSTICE COSTELLO: Yes.

12 A. That he feels that he owes me a lot.

13 MR. JUSTICE COSTELLO: Yes. Very well. We

14 understand.

15 A. Yes. Thank you.

16 489 Q. MR. ROWAN: What you know is that he

17 sorted -- he did something

18 because you no longer were under pressure in respect

19 of the indebtedness?

20 A. Yes, that's right.

21 490 Q. Of Coral Reef?

22 A. Yes, and one of the reasons that I got that previous

23 letter was to show him the efforts I had been making

24 to clear this debt.

25 491 Q. Yes?

26 A. Apart from getting the picture myself of how it

27 stood.

28 492 Q. Yes?

29 A. I also wanted him to know that I had made very

57
 1 serious efforts to -- I had sold my house for

2 example.

3 493 Q. Yes?

4 A. In 1987.

5 494 Q. Yes?

6 A. I had sold a lot of my art through auctions. So, I

7 had made strenuous efforts and I wanted to show him

8 that I had made strenuous efforts to reduce the

9 liability.

10 495 Q. You supposed that as a result of your conversation

11 with Dr. O'Reilly saying, "Look, please can you do

12 something to help here?" He would have made contact

13 with Mr. Traynor?

14 A. Absolutely, yes.

15 496 Q. Between the two of them there would have been

16 negotiations and it would have somehow been sorted

17 out?

18 A. Yes. I mean that is my understanding. I think that

19 is the fact of the matter. Now, obviously I don't

20 think he would have done it himself but I think he

21 would have got his representatives to do it for him.

22 497 Q. Yes. I think you said also, at some stage, that

23 Atlantic Resources eventually turned into Arcon?

24 A. That's right.

25 498 Q. Can you tell us a little about that please?

26 A. The O'Reilly family had taken an interest in Conroy,

27 I think that was the name of the company at the

28 time, which had made a zinc discovery in Tipperary.

29 They eventually acquired control of that company,

58
 1 Arcon. They changed the name to Arcon and they

2 acquired the shares in Atlantic Resources.

3 Atlantic Resources still do have discovery, you

4 know. It has not come to shore yet but they do have

5 various oil interests and they do have an oil

6 discovery off the south coast of Ireland.

7 499 Q. Yes?

8 A. So Arcon, which is the family company that

9 Mr. O'Reilly changed from Conroy, it is a public

10 company, acquired Atlantic Resources.

11 500 Q. It acquired Atlantic Resources?

12 A. It acquired it, yes.

13 501 Q. It acquired 100 percent of the shares?

14 A. 100 percent of the shares, yes.

15 502 Q. Right. So, that on that supposition the

16 Coral shares were acquired as part of that exercise?

17 A. I assume so, yes. I assume so because I never saw

18 them; because as far as I was concerned they weren't

19 mine. They were security against the debt which had

20 diminished very much.

21 503 Q. I see?

22 A. If the debt was taken care of ...(INTERJECTION).

23 504 Q. I see?

24 A. Well, whoever took care of the debt was entitled to

25 the shares.

26 505 Q. Okay.

27 A. It was a very limited value.

28 506 Q. Could I ask you please turning to Ascot Holdings,

29 could I ask you to turn to the letter of the 31st

 1 December, 1986 (Exhibit 5)?

2 A. Yes, I have got that here.

3 507 Q. You will see that on the first page of that letter,

4 there are some transactions detailed where there

5 were some Atlantic shares purchased and some

6 Fitzwilton shares sold?

7 A. Yes.

8 508 Q. Then over the page, on page two, we see that -- and

9 it is a bit hard to read the top paragraph but it

10 says:

11
"We presently hold 760,000 shares in
12 Fitzwilton?"

13 Further along that paragraph:

14
"375,000 shares in Atlantic Resources?"
15

16 A. Right, yes.

17 509 Q. At that date, therefore, Ascot had that number of

18 shares, 375,000 Atlantic shares and 760,000

19 Fitzwilton shares?

20 A. Yes.

21 510 Q. It had a balance of a loan of £542,910.77?

22 A. Right.

23 511 Q. After the transactions that happened on previous

24 days?

25 A. Yes.

26 512 Q. Could I ask you please to turn now to the page which

27 is the 13th February 1990, that letter (Exhibit 6)?

28 A. Yes.

29 513 Q. At the bottom of the first page of that letter, it

60
 1 says :

2
"The quoted investments referred to in
3 (9) (which is the security heading)
consist of 535,000 Atlantic shares and
4 475,000 Fitzwilton shares?"

5 A. Yes .

6 514 Q. Therefore, we see that between 1986 and 1990, the

7 Atlantic shares have grown from 375,000 to 535,000?

8 A. Right.

9 515 Q. So that yourself and Mr. McCarthy and Mr. Collins,

10 continued to buy through Ascot, Atlantic shares?

11 A. Yes, yes.

12 516 Q. Why was that?

13 A. I do not honestly know, Mr. Rowan, but my feeling is

14 that we did not really have full control over the

15 proceedings of Ascot at that stage, that Mr. Traynor

16 was dictating things that should be done. I cannot

17 honestly recollect why we bought Atlantic shares at

18 that stage. I thought from experience that was very

19 sanitary before that, but I do not honestly know

20 that.

21 517 Q. Also, during the period you started off in 1986 with

22 760,000 Fitzwilton shares?

23 A. Yes .

24 518 Q. Those had reduced to 475,000 Fitzwilton shares?

25 A. Yes .

26 519 Q. By the time you got to 1990?

27 A. Yes .

28 520 Q. Some shares in Fitzwilton had been sold?

29 A. Right.
 1 521 Q. Why was that?

2 A. I assume that Mr. Traynor was trying to reduce the

3 borrowings and again, we were not in control at that

4 stage.

5 522 Q. In effect, Ascot Holdings, in fact, was buying and

6 selling shares?

7 A. I think there were a number of transactions. I do

8 not think there were very many. I think probably

9 there are some of them here but I cannot be certain

10 of that.

11 523 Q. You observe also, of course, that this facilities

12 letter of February 1990 agreed an advance of

13 sterling one million pounds?

14 A. Right, yes.

15 524 Q. The loan was a million pounds (Exhibit 6)?

16 A. Yes .

17 525 Q. That had grown from the 1986 letter, it had grown

18 from £542,910 to a million?

19 A. My understanding, as I said earlier, was that we had

20 borrowed a million in the first instance. Now,

21 whether it was all drawn down at the same time, I do

22 not know but the figure in my mind was always that

23 we had borrowed a million in Ascot.

24 526 Q. But the loan had increased, had it not, over the

25 four years?

26 A. It had increased because of interest accruing, it

27 had not been paid off fully.

28 527 Q. Yes. Could I then ask you to go back in your

29 papers, in your book of papers to the letter of the

 1 23rd April 1987 (Exhibit 7)?

2 A. Yes .

3 528 Q. This is a letter from Mr. Traynor to yourself?

4 A. Right, yes.

5 529 Q.
"Dear Vincent,
£
o
this is to advise that the special
7 advance to Ascot amounted to sterling
£149,408.92 which it in turn on-passed
8 to enable the various entities to meet
their commitments."
9
10 What does that mean exactly?

11 A. What I assume it means and again, and excuse me if

12 am not certain on it, but, I think, what he was

13 doing was using money from Ascot to repay certain

14 arrears on the other loans, the original loans,

15 Coral Reef and the other two loans to Mr. Collins

16 and Mr. McCarthy.

17 530 Q. Then the second paragraph says:

18
"As a result of this advance, the
19 balance outstanding to Guinness Mahon
Cayman Trust, inclusive of interest at
20 the 31/3/1987 was sterling £675,191.?"

21 A. Yes .

22 531 Q. The balance had grown then because of that?

23 A. Yes, and the transfer.

24 532 Q. The transfer of money?

25 A. Yes .

26 533 Q. Out of Ascot to these other borrowings?

27 A. Yes .

28 534 Q. To reduce them?

29 A. Yes, that is right.

63
 1 535 Q. Then the following page in your documentation, a

2 letter of the 4th September 1987 to Mr. McCarthy

3 from Mr. Traynor (Exhibit 8):

4
"You will receive word from Vincent
5 that as of the 25th September you
will effectively have received by way
6 of loan from Ascot the sum of sterling
£115,947.82."
7

8 A. Yes.

9 536 Q. This was a further transfer from Ascot?

10 A. Yes.

11 537 Q. To the other companies?

12 A. Yes.

13 538 Q. To produce their indebtedness?

14 A. That is right, yes.

15 539 Q. I believe, if you turn to the letter of the 28th May

16 1990 (Exhibit 9)?

17 A. Yes.

18 540 Q. This is a letter from Mr. Traynor to Mr. McCarthy

19 where he says:

20
"I am sure the three of you have clear
21 figures in your records but just in
case! ..."
22

23 A. Yes.

24 541 Q. Then the next paragraph says:

25
"... March 1987, September 1987 and
26 March 1988 had advanced made ex Ascot
to look after other items for the three
27 of you as follows."

28 And he lists three figures which total sterling

29 pounds, £475,619.79?

64
 1 A. Right, yes.

2 542 Q. If you deduct from the £475,000, the two amounts I

3 mentioned earlier, the £149,000 and the £115,000?

4 A. Yes .

5 543 Q. If you take those away, I get left with an amount of

6 £210,264?

7 A. Yes .

8 544 Q. That was a third payment which appeared to have been

9 made in March 1988. A third payment out of Ascot to

10 the other companies?

11 A. Yes, yes.

12 545 Q. Those three payments totaling £475,000

13 approximately, one of the reasons it seems why the

14 Ascot loan grew from £542,000 in 1986 to a million

15 pounds or thereabouts in 1990?

16 A. Yes, yes.

17 546 Q. Is that your understanding?

18 A. My understanding is that he provided a million

19 pounds loan but used part of that million pound loan

20 to Ascot to reduce the other liabilities arising on

21 the other accounts over a period of time. It is one

22 of the reasons why the purchase of Fitzwilton shares

23 is a lot less than a million pounds.

24 547 Q. The paperwork starts to get somewhat slim on the

25 subject of Ascot. What eventually, Mr. Ferguson,

26 became of Ascot and the shares which it held?

27 A. I know Mr. McCarthy was different to my case and

28 Mr. Collins, in a sense that his share of Ascot was,

29 if you like, taken out of Ascot and amalgamated with

65
 1 another loan which was guaranteed by Dr. O'Reilly.

2 He had put a guarantee in place. It was in place in

3 1990 by Dr. O'Reilly to cover Ascot up to the amount

4 of £750,000. That guarantee, I understand was

5 called in. I do not know exactly when but my

6 understanding is it is 1998 it was called in.

7 Personally, I had assumed that they had called it in

8 much earlier and had been repaid. I assumed the

9 shares then went to the benefit of the guarantor,

10 the shares held by Ascot.

11 548 Q. You do not know exactly what happened? You cannot

12 give me chapter and verse, if you like, as to what

13 happened to Ascot Holdings?

14 A. No, no. All I know is that the loan was taken out,

15 the guarantee was called out, the money was paid

16 over and then the shares went to the guarantor, the

17 shares remaining in Ascot.

18 549 Q. You held what proportion of the interest in Ascot?

19 A. One-third.

20 550 Q. You held a one-third interest in Ascot?

21 A. Right.

22 551 Q. You do not know exactly what happened to Ascot?

23 A. I do not know what happened after the guarantee was

24 called in, if you follow. You know what I mean, it

25 was taken care of as far as I was concerned by the

26 guarantor.

27 552 Q. How do you know that?

28 A. I had been told.

29 553 Q. By whom?
 1 A. By Noel Corcoran.

2 554 Q. By Noel Corcoran?

3 A. Yes .

4 555 Q. Noel Corcoran has a good view of what happened to

5 Ascot?

6 A. I imagine he has probably the best view of what

7 happened afterwards because he would have been, if

8 you like, taking care of the operations.

9 556 Q. Did you ask him in anticipation of this interview;

10 did you ask him for any information on Ascot?

11 A. Not particularly. It was out of my hands, in the

12 sense, that I was not being pressurised for

13 repayment any more. The guarantee had been called,

14 as I understand it, and the loan had been repaid.

15 557 Q. You have sort of left us hanging though because you

16 have provided us with some copy documentation and

17 then suddenly to...(INTERJECTION)?

18 A. I have no documentation in regard to what happened

19 afterwards.

20 558 Q. Mr. Corcoran might have been able to provide you

21 with some?

22 A. I did ask him what -- not for documentation as such,

23 but I did ask him when was the loan paid off

24 finally. I assumed the loan had been paid off

25 certainly no later than the mid 1990's. I

26 understand it did not take place until 1998.

27 559 Q. Did he tell you whether interest continued to run?

28 A. No.

29 560 Q. On the loan?

 1 A. No, he regarded it as not my responsibility anymore.

2 561 Q. Could I ask you to turn please, Mr. Ferguson, to the

3 third of the letters dated the 28th May, 1990?

4 A. Yes .

5 562 Q. This is a letter from Mr. Traynor to Mr. McCarthy

6 where he says:

7 "I wish to confirm that the balance

representing the trading loss as at the
8 31st May 1990 is sterling pounds,
£29,701.58. This was confirmed by me
9 to Vincent on the 2nd May."

10 A. Yes .

11 563 Q. What exactly does that mean do you think,

12 Mr. Ferguson?

13 A. Again, I do not honestly know. My understanding, my

14 own understanding, is that it represents a loss on

15 shares actually sold. In other words, that sum

16 would be producing, if you like, security in terms

17 of the original security. That this was a realised

18 loss on the value of the shares.

19 564 Q. In which company?

20 A. I presume Ascot, I do not honestly know, it must be

21 Ascot. That is the joint company.

22 565 Q. Did Ascot maintain a trading profit and loss and

23 balance sheet?

24 A. No, I have never seen one.

25 566 Q. The use of...(INTERJECTION)?

26 A. Sorry, the record is an internal mechanism that the

27 bank were using. As far as we were concerned, we

28 had a loan outstanding and there was various

29 securities there, various securities were sold from

 1 time to time. I would assume that this was a loss

2 on one of those, the sale of securities.

3 567 Q. Could I just confirm with you if that Ascot Holdings

4 was a limited company? Was Ascot Holdings a limited

5 company?

6 A. I do not honestly know. I assume it must be a

7 limited company.

8 568 Q. You were a one-third shareholder?

9 A. Again, I have never had shares. There is no

10 evidence to say I was a one-third shareholder in

11 Ascot. Ascot was the name that the loan was taken

12 out in on behalf of the bank.

13 569 Q. In your statement to us you say, it is on page 5 of

14 your statement at the top, you say:

15
"I also borrowed money through Ascot
16 Holdings Limited?"

17 A. Yes, yes. I presume it is a limited company. As

18 far as I was concerned, it is the bank's way

19 of...(INTERJECTION).

20 570 Q. That is what your statement says to us?

21 A. Sure, yes.

22 571 Q. Where was this company registered?

23 A. I do not know. I do not know to be honest with you.

24 I presume it was the Caymans but I cannot be

25 certain.

26 572 Q. That Ascot Holdings was registered in the Cayman,

27 you believe?

28 A. I believe, yes.

29 573 Q. Presumably there would be requirements in Cayman as

69
 1 in Ireland for a limited company to file annual

2 accounts?

3 A. I do not know what the requirements are in the

4 Cayman Islands. I do not know, honestly.

5 574 Q. It seems a likely proposition, does it not?

6 A. I am sure. I mean it would confirm the general

7 practice.

8 575 Q. You never saw any accounts?

9 A. No.

10 576 Q. For Ascot Holdings Limited?

11 A. No.

12 577 Q. This was a company which you and your fellow

13 colleagues, Messrs. McCarthy & Collins became a

14 party to, allowed it to borrow money. You had some

15 sort of beneficial interest in it and you never saw

16 accounts?

17 A. No, no.

18 578 Q. You never played any part in setting all of this up?

19 A. No, none whatever.

20 579 Q. All of those matters where undertaken on behalf of

21 the three of you by Guinness & Mahon?

22 A. Yes .

23 580 Q. And particularly Mr. Traynor?

24 A. Yes, yes.

25 581 Q. Thank you very much.

26 A. Thank you, Mr. Rowan.

27 END OF EXAMINATION OF MR. FERGUSON BY MR. ROWAN

28 MR. JUSTICE COSTELLO: Mr. Ferguson,

29 Ms. Mackey would like

 1 to ask you just a few questions.

3 MR. FERGUSON WAS EXAMINED, AS FOLLOWS BY MS. MACKEY

5 582 Q. MS. MACKEY: Mr. Ferguson, just really

6 questions on one

7 particular area and that is the cheques which you

8 gave to Mr. Traynor or to Guinness & Mahon in order

9 to repay, to make repayments on your loans?

10 A. Yes, yes.

11 583 Q. I have two specific questions in relation to those

12 cheques. First of all, a number of the cheques were

13 made out to cash?

14 A. Right.

15 584 Q. Why was that?

16 A. I presume Mr. Traynor asked me to.

17 585 Q. Do you remember that he did?

18 A. Pardon?

19 586 Q. Do you remember that Mr. Traynor asked you?

20 A. I do not remember it if he did but I would have done

21 whatever he asked me to do. I was trying to repay

22 as much as I could off these loans.

23 587 Q. Yes?

24 A. Whatever cheques I could obtain from various

25 services, I would go along to Mr. Traynor and hand

26 them over to him and sometimes I would pay the

27 cheques to him.

28 588 Q. You told the Judge earlier that initially you made

29 the cheques payable to Guinness & Mahon?

71
 1 A. Yes, yes.

2 589 Q. At what point did you change and make them payable

3 to cash?

4 A. I would think it is probably during the course of

5 the gathering trauma in regard to trying to meet the

6 sums due as best I could.

7 590 Q. Yes?

8 A. That I would go along to Mr. Traynor with a cheque

9 and if he told me to make it out to Uncle Tom

10 Casley, I would have done it. I had faith and

11 belief in him.

12 591 Q. Yes?

13 A. As a representative of Guinness & Mahon bank.

14 592 Q. You would go along to Mr. Traynor without having

15 already made out the cheque in advance? You would

16 not have made out a cheque to Guinness & Mahon?

17 A. No.

18 593 Q. For the amount that you wanted to pay?

19 A. No, because normally I would not be able to meet the

20 full liabilities that were outstanding. I would go

21 along with whatever sums I could make available to

22 him.

23 594 Q. Yes?

24 A. Yes.

25 595 Q. You do not recollect specifically that he told you

26 to do this but you think it is likely?

27 A. I think it is very likely, yes.

28 596 Q. Do you know why he might have told you to do that?

29 A. He was in charge of the account.

72
 1 597 Q. Yes?

2 A. He was handling the matters on behalf of

3 Guinness & Mahon to my mind. However, he was

4 handling those matters to suit his way of dealing

5 with it, I went along with it.

6 598 Q. Did he give you any reason why he might have asked

7 you to make them out to cash?

8 A. No, no.

9 599 Q. Then at a later stage, you made a number of cheques

10 payable to Ansbacher?

11 A. Yes .

12 600 Q. Why was that?

13 A. Again, Mr. Traynor would have told me to make them

14 payable to Ansbacher.

15 601 Q. Can you remember when that change came about?

16 A. I do not know when Ansbacher came into the

17 reckoning, in the situation. Was this after or

18 before Ansbacher had been acquired or

19 Guinness & Mahon had been acquired by Ansbacher?

20 602 Q. Guinness & Mahon Cayman Trust I think?

21 A. Yes .

22 603 Q. When Mr. Traynor asked you to make out the cheques

23 to Ansbacher, did he explain why he was asking you

24 to do this?

25 A. No.

26 604 Q. Did you ask him why you suddenly were making out

27 cheques to an entity called Ansbacher?

28 A. No, as I said, did Ansbacher take over the Cayman

29 account, the Guinness & Mahon Cayman.

73
 1 605 Q. You were aware of that?

2 A. I think I was aware.

3 606 Q. You were aware of it?

4 A. I think it was public knowledge at the time.

5 607 Q. Very good. I have no further questions, thank you.

u
7 END OF EXAMINATION OF MR. FERGUSON BY MS. MACKEY
o
o
9 MR. JUSTICE COSTELLO: Thank you

10 Mr. Ferguson.

11 The transcript of your

12 evidence will be prepared and we would ask you to

13 come in to sign it?

14 A. Certainly.

15 MR. McALEESE: I wonder Judge, sorry to

16 interrupt, before you

17 finish, could I consult with my client just for a

18 moment before you finish.

19 MR. JUSTICE COSTELLO: Yes, of course, yes.

20 Would you like to go into

21 the consulting room?

22 MR. McALEESE: I do not think it will be

23 necessary. I will be very

24 brief.

25 MR. McALEESE: Thank you.

26

27 (SHORT ADJOURNMENT)
9 fi
Zo
29 AFTER A SHORT ADJOURNMENT
 2 A. MR. FERGUSON: I want to clarify a

3 point in regard to Ascot

4 to Mr. Rowan, that I never had any beneficial

5 interest or ownership in Ascot. Ascot, again was a

6 nominee company used by Guinness & Mahon. I just

7 wanted to make it clear.

8 MR. JUSTICE COSTELLO: I think that is clear,

9 Mr. Ferguson.

10 A. Sorry, fair enough.

11 MR. JUSTICE COSTELLO: No, of course, no, it is

12 just in the course of the

13 discussion, it may not have been made clear. As we

14 understand your evidence, you never had any

15 shareholding in Ascot. You were never entitled to

16 any shares in Ascot?

17 A. Yes.

18 MR. JUSTICE COSTELLO: But you were entitled to

19 the underlying shares that

20 Ascot owned?

21 A. Exactly, Judge.

22 MR. JUSTICE COSTELLO: To a third. You were

23 beneficially entitled in

24 your view to the assets?

25 A. Exactly, Judge.

26 MR. McALEESE: I just took that up as

27 Mr. Rowan was finishing

28 his questioning, I perhaps misinterpreted it.

29 MR. JUSTICE COSTELLO: No, no not at all, no. I

75
 1 think it is good to have

2 the matter clarified. Very well. Thank you very

3 much.

5 THE INTERVIEW WAS THEN CONCLUDED

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

76
fi ^J-jz ^ ^

Y^CXNLJ Gxt^vlv^xrv^
Appendix XV (167) (1) (b)
 Anafeacher jJmlted
p.o; Box SJ7, Gaud Cayman, Cayman hia&4i, Britiih Wot Indlw
.TdaphPm: (S09) 9494653 Take CP 4303'
FawlittlU (109) 949*7946 (109) 9**3161

VUFiCiimlic.
MEMORANDUM

To: J. D. Traynor
Ra: Coral Reef Securities Ltd.
•From: • Join A. Font -r V.p. f StAmt*

A brief analysis of tlx loan podtioo ii u foUowa:

Funds Advanced 374.7S9.69

Intefett charged

Rspsyneou
Loin balance
>:

^X^MMMMTMMMJ^A^MMM^
AFUftZE
2,1992

AMMIUUflO AL BBWawoigy cwgjjoai wrffl pmou

Appendix XV (167) (1) (c)
r, 72900 16:20 353-1-8461905 EMSWORTH PAGE 08

609 949 7946

ANSBACBER •CAYMAN j. • . ®0Q1
10 Hi" MM

AnibtichetLimittd
P.O. Box 887, Grand Cayman, Cayman Mmda, Bdtkk Wait lodkt
TeHpbona; (10$) 9 4 M U 5 T«kxs CP 4305
• F8eiltnll» (809) 94P-7M6 (80$) 049-5W7

V U Fmimile
#011-3331-1512-033
15 October, 1992

JAFuiI

J.D.Tmynor.Ejq.
.CRHpto
42Htzwilliam Square
Dublin 2, I R E L A N D

DcarDes,
• • • . •
Rtt rv « p * t R r * f Sftcuritim Ltd.
The loan balance outiftandlnf M at30th September 1992!» aa follow*: l i-

Per facility letter 14tb Jamwy1991

IS ' ; 237/370.19;
Interest to 30th September 1992 •jtfJUfiQXg
dH
292
Leu payment on account JLQSUQ
QEL42&23

lament ii Tunning' «t the m e of <9348 par day.

Dei, I very raoch regret to advise you that ualeaa thia amount is ck««dby.30A "
November 1992 wehave been instructed to call the lota mo proceed afaiast W • .
guarantor. Ifjaufcd there ii no potato waiting^
we wiH commence the move cow.
# ® " • •

Please let me hear'from you straight away.

Yours sincerely,

JOHN A. FURZE
Appendix XV (167) (1) (d)
 r

tMSWUKIH
.t txxm ife!'<o d3d-J.-tMbl.3B3

JDT/AJW . -' - •
Appendix XV (167) (1) (e)
 GUINNESS MAHON CAYMAN TRUST LIMITED
A ) M M gt IM OunMaa Malm m * t m * Banw* Oma
Tdmmwmno iMMrt IM463M '.O-telT

Tam CPiM 8 M M Cayman

31«c ) II mill, 1986

yourrrf
our rat ! A F : « «

J. D. Traynor Esq.
3 Tr±niC7 Straac
Dublin 2
IRELAND

Daar 0«ii
!£» Aicoc Holdlnts Led.

Tha following transactions cook placa chil aoncht-

PURCHAffED

200,000 AxLancle Sasourcas 49,816.00

40,000 Atlantic Rasoitrcaa Ca.ll Options 2,138.00

31,934.00

SOU

30,000 Fleswileoa 38,093.23

Amount: paid an lit Dactabar 1986 £13,860.73

PURCHASED

173,000 Ac Untie Rasourcas £46,361.14

Ab>j"« amount paid on 13th Dacaobtr 1986

./cont'd
 (i. Travr.

d
J»> p r e s e n t l y ^ shares in Fi i s v i ! - - n (7J5.COU acauir&u through
1
J^vin-n S ^ c c r i : ei> a-. J.OQO throt.-jii Sraw U . :.pan> and '" * ,yuO A t l a n t i c
Rr srs »• :-a>ur.i<- i l l y we ha"<i a c a l l r c t i o n -v. r iO,000 A.R.
sraras.

Tha Loan p o " J ~ ' ~ ' a s

f'-'lcvs:-

ce November 1966

Purchases - net - see above- 13.360.75

pvrchases - see abce &6.361.I&

Interest to 31sc December 1936 5,737.«?4

£5*<2,910.77

The loan has been rtr.evad for a further month at 13 1/8% per ann-ii

Yours s i n c e r e l y ,

. •,• 2. T
Appendix XV (167) (1) (f)
 r*

art.

Cc >c

Aasbocher Limited
A MM* tftht towf Aa+mku tUUtm PLC Utrdmu 1Mtttf few*
i
p.a >w atr. ( W ofem. M * w « M a
nUMK(MD*4M<S3}4
Ikta CP 4305
taWRMMM
ISOftMMW
Ifcbroaxj- 13, 1990

OOTial
Moot Bolfltogg Tilwritart
P.O. Box 887
Qranfl OaQom, B.W.X.
Dnr Sires
m wdta t» omfflrw our vUHagaess to tha cwmttift ^ ^ t l w avail-
fiKi« to you, en the fdloKlng ognflltinnai
L Ann.nmL at idnBoi Stg. 1,000,000.00
2. VUna Data lafc Vehcaaxy 1990
3. Maturity Dafea 1st August 1990 .
90 day TiTBHR plus aap.a.
5. PuuAlty KH
6. KtL
7. Tui y^i ooUy to ba paid aontfaly
Kb tha aud cdE Mdt uuutlt cmiaicing
28th Maraaxy 1990
8* Principal Oft or bafcra 1st Auguat 1990
9. Oacurlty K ManuuanJan of Pa^oatt CMS
(juo^tc^ pconBoml
qnniriuil aa (aaa balow)
tta qiaotad tnvastsanta xafarzad to in (9) above consist oft
535,000 Atlantic Saacuroas pie Shares
475,000 Fiterwiltm plfl Sharas
tern pvaoaal guaxaataa ia that of Mr. kJtJF. O'Bailly to cover en ansuot of up
to Stff. 750,000.00.
Page 2 of 2

Hie investments referred to m the preceding page are registered in the name of
our wholly owned subsidiary, OVEPSERS NOMINEES UMBED, and are held by us in
safe custody.
ackrowledgeitiBnt and acceptance of the foregoing terms and conditions, and in
cognition that in our capacity as directors and officers of ASCOT FOLDINGS
.,.TvrTTRp we may execute whatever documentation is required to perfect- the security
of the lender, ANSBACHER LIMITED, we should be grateful if you would) kindly sign
and return the accompanying copy of this latter. ;
Appendix XV (167) (1) (g)
c*

J
H. 7MSM/7MD4 3 TRINITY STREET,
TaMti I M
Facatmrfla: 72DM2 DUBUN 2.

STRICTLY PERSONAL . 23rd April, 1987.

4^inc«nt Ferguson, Esq.;
Fitzwilton PLC,
1 Upper Hatch Street,
DUBLIN 2.

Re: ASCOT .
Dear Vincent,
This is to advise that the special advance to Ascct
amounted -to Stg.£149,408.92 which it in turn on-passed to
enable the various entities to meet their commitments.
As a result of this advance the balance outstanding to
Guinness Mahon Cayman Trust, inclusive of Interest, at the
31/3/1987 was Stg.£S75,191.89.
Yours siftcerely,

J.D. Traynor.

c.c. C.J. Collins, Esq.

J.S. McCarthy, Esq.

JDT/AJW
Appendix XV (167) (1) (h)
r

m WOTW 19 LOWIR PEMBROKE STREIT,

iMW
DUBLIN 2.
STRICTLY pwynwar. 4th September, 1987.

J.S. McCarthy, Esq.,

1 Upper Batch Strset,
gffBIffW 2.

Dear Jim,
You will receive word front Vincent that: as of the
25th September you will effectively have received by way of
loan from Ascot the sua of Btg.£115,947.82. This is made .
up as follows:
March interest and Repayment St?.£51,291.93
September interest and Repayment • £46,305.62 •
September Additional Repayment : £18.350.27
£115,947.82

In due course a new facility letter will issue

taking the above into consideration.
Yours sincerely,

• JTPT Traynoj.

JDT/AJW
Appendix XV (167) ( l ) ( i )
TM.7ffB1**.'7W005 42 FITZWtLUAM 8QUARE
FudmMK B P 0 3 »
DUBLIN 2.

STRICTLY PKRSOHAL 28th Nay 1990

J.S. McCarthy, Ssg.,

Fitswilton pic,
1 Upper Batch Street,
DUBtm 2.

Dear Jim,
I an aura the three of you have clear figures in your record*
but Just In CAM!
March 1987, saptembar 1987 and March 1988 had advances made ex
Ascot to look after other Items for the three of you as
follows:
J.S.MoC Stg.BIC1,768.86
V.F. ftl 34,121 .as
C.J.C.
8475,619.79

in arriving at the balance of Interest due as at 31 >5/1990 I

have taken into account the following payments mades
By J.S. McCarthy . Stg.El4,675.07 < •
By Vincent Ferguson 8tg. 87,449.78 /V v\ t",-
Yours sincerely.

J.D. Travnox

r.c. V. Ferguson, Bsq. .

C.J. Collins, Bsq.

•JDT/AJW
Appendix XV (167) (1) (J)
08/82/2008 11:34 393-1-8461988 EMSWORTH PAGE 02

42 FITZW1LUAM SQUARE
7M.78S14V7630A8
ftcsimlte 812038 DUBLIN 2.

„ ,,„„ FBRSOMAL
STRICTLY iL.nrju.iT 28th May, 1990.

j.S. McCarthy, Bag.,

Fitzwilton pic,
1 Upper Batch Street,
pqaLIB 2.

Dear Jin,
I wish to confirm that the balance, representing the trading
loss, as at 31st May 1990 ia Stg.829,701.58. Shis was
confirmed by me to Vincent on the 2nd May.
Would you please consider with your colleagues and contact me
not later than week commencing 4th June.

yours sincerely.

o.c. V. Ferguson, Bsq.

C.J. Collins, Bsq.

JDT/AJW
Appendix XV (167) (1) (k)
 IN THE MATTER OF THE COMPANIES ACTS 1963-1999
and IN THE MATTER OF PART II OF THE COMPANIES ACT 1990
and IN THE MATTER OF ANSBACHER CAYMAN LIMITED

STATEMENT OF VINCENT FERGUSON

I have read the letter of 21 December 1999 addressed to me and signed by the three
Inspectors appointed by the High Court to Ansbacher (Cayman) Limited ("the
Company"). I intend to deal on a point by point basis with the matters set out in
Appendix C thereto.

(i) Summary:

Set forth below is a response to each of the matters addressed in that Appendix, in the
order in which they appear therein. To summarise, however, I had dealings spanning
over some years with the Company. Those dealings arose from loans made by the
Company to me for the purposes of investments by me in certain shares. Apartfrom the
arrangement of the loans, those dealings comprised the Company seeking repayment
from me, occasionally restructuring the loans and my remitting monies to it by way of
payment of interest and capital. I never had any monies on deposit with the Company,
I never had what are now known as 'back to back' arrangements with it, and I did not
avail of any trust arrangements. I did not borrow the monies in question, or have any
other dealings with the company, for the purposes of evading any Revenue obligations
- in fact I incurred substantial losses as a result of the investments which prompted the
loans.

I have also been asked to provide the inspectors with any books or documents relating
to the investigation. Insofar as I am concerned, I believe that the only books and
documents within my possession, power and procurement so relevant are those relating
to my dealings with the Company. My solicitor has gathered together and arranged
1
 chronologically all such documents. These documents camefrom my records, and/or
were provided to me by the Moriarty Tribunal in connection with its investigations or
were obtained by mefrom Mr. McCarthy. I regret that I have not retained full records
of my transactions - 1 furnish herewith all records which I have managed to obtain.

I should also state that in April and May of 1999 (following requestsfrom the Moriarty
Tribunal) my accountancy advisor (whom I share with Mr. McCarthy), arranged for a
representative of KPMG to travel to the Cayman Islands for the purposes of seeking to
recover any documentsrelatingto myself or Mr. McCarthyfrom the Company.
Enclosed in the bundle of documents is a communicationfrom KPMG to Mr. Corcoran
dated June 1 1999, which recites Hie difficulties encountered in securing any such
documentation. I also sent a handwritten note to the Company asking that they furnish
me with copies of documentsrelatingto me. That note will be produced to the
inspectors in due course. Much of the information set forth below is based upon the
documents which I am enclosing herewith, rather than upon my own memory of events.

(ii) Cayman Island Trusts and Trust Companies:

I never executed any Deed of Trust or other instrument in the Cayman Islands or
elsewhere so as to establish or partake in any trust of the type described by you. In
summary, I never had any involvement of any description whatever with any such
arrangement. As more fully set forth below, I was the beneficial owner of shares
purchased with loansfrom the Company, the legal ownership of which was vested in two
- or possibly more - companies operated by the Company, but this situation was not
operated pursuant to any deed or other instrument I accordingly will deal with these
arrangements in thefinal section hereof.

(iii) The use of deposits maintained by Irish residents with Ansbacher

(Cayman) Limited:

I can confirm that I never deposited money with the Company or had money deposited
in any account of the type described by you. At all times I was, during my relationship
 r

li

with the Company, indebted to it. In summary, I did not avail of any such service or any
• similar type of service which may have been offered by the Company/Guinness & Mahon
(Ireland) Limited. I appreciate that what is being described here by you have become
commonly known as "Ansbacher Accounts".

' i
] 7 Nor did I have an account of that nature (or indeed any other account) with Irish
Intercontinental Bank, nor did I have any dealings with Amiens Securities Limited or
Amiens Investments Limited. I never had dealings with Kentford Securities Limited of
the nature referred to by the inspectors on pages 11 and 12 of Appendix C to their letter,
and in fact as far as I was aware I never had any dealings at all with any entity of this
name. I have, however, been advised by the Moriarty Tribunal that monies paid by me
by way of interestrepaymentsto the Company were lodged to a bank account in the name
j of this company. Once again, further details of this are provided below.

| (iv) Guinness & Mahon (Ireland) Limited loan/guarantee facilities secured by

cash deposits with Ansbacher (Cayman) Limited

8. I, at no time, had any suchfacilities extended to me by either Guinness & Mahon (Ireland)
J Limited or Irish Intercontinental Bank Limited, nor have I ever had dealings with either
the latter or Kredietebank NV. Nor did I ever seek to obtain such a facility -1 never had
I any funds on deposit (either directly or indirectly) with the Company which would have
enabled me to seek to enter into such an arrangement as described.

(v) Exchange Control Acts 1954-1992:

9. In respect of the transactions which I outline in some detail further on in this statement,
I wish to advise that I personally never sought Exchange Control Act approval. I
I assumed that exchange control approval would be organised by the bank which arranged
the loans - namely Guinness and Mahon Ireland.

(vi) Channel Island Trusts and Companies

r

10. I never, at any stage, availed of any of the services described. Nor was I ever at any stage
a beneficiary of the trusts/companies mentioned in your letter. I have never had dealings
with Guinness Mahon Jersey limited, Guinness Mahon Channel Islands limited or
College Trustees Limited or indeed any company called Sovereign Management Limited.

(vii) Bodies corporate which had dealings with Ansbacher (Cayman) Limited

11. I at no stage, had any direct or indirect interest in any body corporate which had dealings
with the Company. Nor had I any dealings with subsidiaries of or entities relating to such
bodies corporate. Nor had I any interest (direct or indirect) in any trust which had
dealings with the Company.

(viii) Services operated by Ansbacher (Cayman) Limited of which I availed -

12. I say that I obtained circa 1984 loanfinance from die company then known as Guinness
Mahon Cayman Trust Limited ("GMCT")- I was at that time a director of Atlantic
Resources Limited ("Atlantic") and a shareholder in that company when I sought finance
to invest in that company's shares. I obtained loanfinance of STG£375,000 to purchase
the shares at a price of £1.20 per share. The loan finance was arranged by Mr. Des
Traynor of Guinness and Mahon Bank Limited, but was advanced by GMCT to one of
its nominee companies, Coral Reef Securities Limited ("Coral Reef). That company
purchased Atlantic shares on my behalf. I was however the beneficial owner of those
shares. I had no beneficial interest whatever in Coral Reef as that company was wholly
owned by GMCT. The advance by GMCT to Coral Reef was secured by a pledge over
the 344,333 Atlantic shares purchased together with a personal guarantee signed by
myself. I also understand from inquiry that neither Coral Reef nor Ascot Holdings
Limited - the other company referred tobelow - was ever registered as the owner of the
shares acquired on my behalf. This suggests that they were held in the name of another
entity. I say that I continued to make payments over the course of a number of years in
an effort to reduce my debt to GMCT.

13. I also borrowed money (but this time as one of three equal borrowers - myself, James
McCarthy, and CJ Collins) through Ascot Holdings Limited ("Ascot") in 1986 in a
manner similar to that outlined above in respect of Coral Reef. Ascot was used to
purchase shares in Fitzwilton pic and Atlantic. It was also used for the payment of debts
owing by each of us on our individual accounts, ie Coral Reef in my case.

Thefirst document I have in relation to Ascot is a letter dated 31 December 1986 from
Mr. Furze to Mr. Traynor outlining the shares purchased by Ascot. There appears
thereafter a letterfrom Mr. Traynor to me dated April 23 1987. This document refers to
an advance to Ascot of STG£149,408.92 "...to enable the various entities to meet their
commitments". The "entity" so far as I was concerned was Coral Reef. As I have stated,
I had no doubt but that I was the beneficial owner of these shares, in whatever manner the
transaction was structured from GMCT's perspective. As far as I was concerned, these
structures were essentially in Mr. Traynor's/the bank's hands, I having relied upon them
in thefirst place to obtain the necessary loans.

The third document in my chronology is a letterfrom Mr Des Traynor to Mr. Jim

McCarthy dated 4 September 1987 referring to a conversation with me in relation to the
Ascot loan. This is followed by a note of Mr McCarthy's of September 20 1988
recording the provision by Mr. McCarthy of two cheques on my behalf to Mr. Traynor
in respect of outstanding interest and capital. Invariably, payments in respect of these
loans were given to Des Traynor, GMCT's representative in Ireland and the person who
had arranged the loan. Due to the fact that the Atlantic shares had plummeted in value,
my investment in the shares had been highly unsuccessful. Interest rates had risen
steadily and I found that by 19901 was struggling to keep up with payments on the loan

Because of the difficulties in keeping up these repayments, it became necessary for me

to dispose of some of the shares and this is referred to in a letter of 6 September 1989 to
Jim McCarthyfrom Des Traynor and copied to me. Two subsequent letters dated 27 and
29 September 1989 record further disposal of these shares. A letter of January 10 1990
from Mr. Traynor to me records sale of Fitzwilton shares by Mr. Furze generating a net
amount of STG£179,534.90, but a balance on our Ascot account due of
STG£1,015,037.90. After this, on February 13, a facility letter was issued by Ansbacher
Limited to Ascot Holdings Limited recording a facility of STG£1,000,000 backed by
535,000 shares in Atlantic Resources pic, and 475,000 shares in Fitzwilton pic. It also
necessitated a personal guaranteefrom Dr. AJF O'Reilly in respect of this facility at that
stage. Dr. O'Reilly is a long-standing personalfriend of mine. It will be noted that this
document refers to these investments being registered in the name of Overseas Nominees
Limited, a wholly owned subsidiary of the Company.

A letter of 14 February 1990 addressed to James McCarthy records a balance of interest

owing on the Ascot facility of STO£28,141.83. By letter dated May 28 1990, Mr.
Traynor confirmed to Mr McCarthy the use of Ascot to cover interest and repayments due
by us on our respective loan amounts. I also wish to refer to two parallel letters of that
date. By undated letter written shortly after June 6,1990, Mr McCarthy was advised that
I had recently made repayments which amounted of STG£5,700. This letter referred to
the problems being encountered by the three of us (being myself, Mr. McCarthy and Mr.
Collins). On June 22 1990, Mr. Traynor recorded a further payment by me of
STG£7,599.68, and by letter of the same date the amount then outstanding for May was
explained

A letter which was sent to me by the Moriarty Tribunal on 25 March 1999 reveals that
a number of cheques given to Des Traynor by me (in reduction of my GMCT loan
liabilities) ended up in the account ofKentford Securities Limited, an account controlled
by the late Des Traynor andfrom which payments were made for the benefit of Charles
J Haughey. It will be notedfrom the material supplied to me by the Moriarty Tribunal
that by that stage I was reduced to selling shares and personal items to maintain payments
on the debts. Certain of the cheques which have been drawn to my attention by the
Moriarty Tribunal represent payments made to me by auction houses (James Adam and
Taylor De Vere Art Auctions). I say that I would have simply endorsed those cheques
to the bank in an effort to reduce my liabilities to the bank. These payments were in
reduction of my debt and not by way of payment to Mr Haughey or any other person.

This letterfrom the Moriarty Tribunal refers to four such credits. Thefirst was credited
on March 29 1990, and was in the amount of IR£10,500.00. The second payment was
 credited on June 20 1990 and is in the amount of IR£8,351.30. It will be seen that this
j was comprised of paymentsfrom James Adams, and Taylor De Vere Art Auctions as well
as Ulster Bank. This is referred to in the letterfrom Mr. Traynor dated June 22 1990.
The third was in the amount of IR£5,528.20 and wasfrom Taylor's De Vere Art
Auctions. The final payment was in the amount of IR£3,342.50 and was credited to the
i Kentford account on April 4 1991, the cheques being drawn on March 28 and 31 1991.

20. By letter dated January 141991, Ansbacher Limited recorded the facilities then available
to Coral Reef Securities Limited, at that stage representing some STG£227,070.19,
secured by my personal guarantee and shares in Atlantic Resources Limited. By note
dated March 2 1992, Mr. Furze recorded this liability as being in the amount of
STG£262,153.37 out of an initial advance of STG£374,789.68 on which I had made
repayments of STG£346,832.73 and by letter dated October 15 1992, the amount was
STG£287,425.23. On May 27 1993, Mr. Traynor wrote to me and advising me of a
change of ownership of the business, and of the likely effects upon the calling in of the
loan. This is the last document I have dealing with the debts.

21. I was ultimately unable to maintain payments to GMCT and AJF O'Reilly had kindly
agreed to guarantee my liabilities in respect of Ascot. That guarantee was called in by the
bank and paid off by AJF O'Reilly in 1998. AJF O'Reilly ultimately negotiated a
settlement in respect of the Coral Reef debt.

22. I regret die absence of much of the relevant documentation but, as mentioned previously
in this statement, I have done my best to obtain all relevant records and am furnishing
herewith those records which I have obtained.

VINCENT FERGUSON

Dated this 11th day of February 2000