No basis for claim of intimidation by Anglo official

A HIGH Court judge has found no basis for claims a senior Anglo Irish Bank official intimidated a financial expert to prevent him giving evidence for a businessman in his action over alleged fraudulent misrepresentation by the bank and another company relating to an investment fund for two hotels in New York.

The bank and Michael O’Sullivan, lending director Ireland with Anglo, had strongly rejected the claims.

The Commercial Court was told last month of claims of intimidation by Mr O’Sullivan of expert Tom Barry, a former head of corporate banking with Allied Irish Banks, who initially agreed to provide a witness statement for businessman Gerard McCaughey over the New York investment fund but who withdrew late last November.

Thomas Norris, solicitor for Mr McCaughey, said Mr Barry had told the solicitor Anglo had obtained a substantial judgment against him (Mr Barry) over property dealings in London. Having made inquiries informally with “people” in Anglo, Mr Barry had said he was told submitting a witness statement and attending court would have “dire consequences” for him, Mr Norris said.

In an affidavit on December 20th last, Mr Norris said he was informed by another man that Mr Barry had named Mr O’Sullivan as the Anglo official with whom he had the relevant conversation.

On December 20th, Mr Justice Peter Kelly described the allegations as very serious, and adjourned to yesterday to allow Mr O’Sullivan respond. Mr McCaughey was given time to have another expert provide a witness statement.

In his affidavit yesterday, Mr O’Sullivan described the allegations as completely groundless. He said he met Mr Barry in 2005 when responsible for certain Anglo portfolios. In July 2007, Anglo advanced a loan to Mr Barry and another man to fund a deposit on a UK property. He believed he last spoke to Mr Barry in 2008 prior to events before the court.

Mr Justice Kelly said on the evidence, the claims had no basis, and Mr O’Sullivan was vindicated totally, he ruled. There was also no basis for claims other witnesses may be intimidated, he found.

Mr McCaughey, with addresses at Sandymount, Dublin and Manhattan Beach, California, is among 24 investors suing Anglo in relation to the hotels investment fund.

His action is being treated as a “pathfinder” case and is against Anglo and Mainland Ventures Corporation (MVC), Delaware-based and wholly owned by Anglo, over the Anglo Irish New York Hotel Fund, a private equity investment in which some 50 high net worth Irish-based individuals invested an average $1 million each in 2006.

Both defendants are being sued by investors for $23 million over alleged fraudulent and/or reckless concealment and/or misrepresentation concerning the fund relating to the Beekman Tower Hotel and Eastgate Tower Hotel in Manhattan. The claims are denied.