Transport company Aircoach has strongly rejected allegations by its finance director of accounting "irregularities".

The claims "are as fanciful as they are damaging" and will be hotly contested in legal proceedings, counsel for the company told the High Court yesterday.

Mr Brian O'Moore SC, for Aircoach, said Mr Joseph Shortall had made several allegations, including one claim that he had pointed out to Mr John O'Sullivan, managing director of Aircoach, that there was €143,000 due to the Collector General regarding PAYE/PRSI payments for 2003 and that there would be penalties if that was not paid by February 14th. Mr Shortall had alleged Mr O'Sullivan had told him it was "okay to owe people money".

In fact, that money was paid to the Revenue Commissioners on time and there were no penalties involved, Mr O'Moore said. That fact was known to Mr Shortall as he had signed the cheque involved.

Mr O'Moore said the case brought by Mr Shortall was "brittle and unsustainable" and Mr Shortall had attempted "to prop it up by meritless allegations" against Mr O'Sullivan and the other defendants.

He was anxious to have an early hearing of the proceedings brought by Mr Shortall against Aircoach and others, including First Group plc, which acquired Aircoach last October, arising from the purported termination of his employment as finance director on March 2nd.

In that regard, Aircoach was prepared to undertake to pay Mr Shortall a lump sum amounting to three months' salary, which it had offered to him prior to the legal action and which was a payment in lieu of notice and in line with the terms of his contract.

Aircoach would also undertake that his position would not be offered to another pending the outcome of the proceedings and that his work would be performed by temporary staff.

On those terms, Mr Roddy Horan, for Mr Shortall, said the court could dissolve an interim order granted to Mr Shortall last Monday, which had restrained the company from treating him as other than its finance director.

Because Mr Horan had had no notice that Mr O'Moore had intended to make comments regarding the allegations, he was not in a position yesterday to deal with those, he said. However, counsel added, Mr Shortall had made his claims in a sworn affidavit and there was no affidavit as yet from the defendants.

Mr Justice Kelly noted what both counsel had said regarding the allegations and made directions aimed at securing an early hearing of the action.

In his affidavit to Monday's hearing, Mr Shortall, a native of England with an address at Castleknock, Dublin, said he had moved to Ireland to take up a position with Last Passive Ltd, trading as Aircoach, and his employment began on February 2nd last. He had previously worked with a subsidiary of First Group plc.

He said he had to undertake a large volume of work to restore the company's books to some resemblance of order and sought assistance but did not get it. He also made a number of allegations of accounting irregularities.

He said Mr O'Sullivan had summoned him on February 16th, demanding to know who had accompanied Mr Shortall to the company's premises over the weekend of February 14th/15th last. Mr Shortall said the man in question was a friend of his, an ex-employee of the First Group and a qualified professional accountant, and had assisted him in preparing a bank reconciliation statement.

He said Mr O'Sullivan had said that amounted to breach of trust. He had told Mr O'Sullivan of a number of matters regarding the accounts. He said Mr O'Sullivan directed him to go home and not report for work the following day. He had been suspended and was told later his employment was terminated and that he would receive a payment in lieu of notice.