Group is believed to be transferring ownership to the next generation, writes Colm Keena

The bulk of the shares in the Dunnes Stores group have been transferred from the Dunne family trust, in what is believed to be a move towards transferring ownership to a new generation of the Dunne family.

The trust that has held the shares is due to remain in existence until the death of the last child of the late Mr Ben Dunne Snr, plus 21 years, according to sources. However, sources said the family might want to move shares from the trust to gain more control over how the shares are passed on.

Dunnes managing director Mr Frank Dunne will be 60 years old this year and textiles director Mrs Margaret Heffernan turned 60 last year.

Sources speculated that the transfer ensured against any single family gaining an advantage by way of the death of another existing beneficiary of the trust while the trust still held control of the group.

It is believed the transfer could have been organised without incurring any significant capital gains tax bills.

Accounts filed by Dunnes subsidiaries show that Mr Frank Dunne now holds 21,244 of the group's ordinary shares and Mrs Heffernan an equal number. The shares were transferred from the trust. A third block of ordinary shares, equal in size, is held by a third party or parties, other than the trust. Sources last night speculated that these shares are held by children of the late Mrs Elizabeth McMahon. The shares are held through a nominee company.

At an extraordinary general meeting in 2002 a number of shares were redeemed or cancelled, others reassigned and a new special preference share created. The impact of the resolutions passed at the meeting have only recently become clear.

The trustees are Mr Bernard Uniacke, Mr Noel Fox and Mr Frank Bowen. The trust now holds only one special preference share.

The Dunne family and the Dunne group dislike media coverage of their business affairs and a source inside the group said yesterday he would be "shot" if he responded to queries from The Irish Times.

However, informed sources speculated that the transfer of the shares to family members could be in preparation for transferring ownership of the group to a new trust that would have as its beneficiaries the children of the Dunne family members who are beneficiaries of the existing trust.

The former head of the group, Mr Ben Dunne, was bought out of the trust during the 1990s.

The existing trust was set up in 1964 with a life of 21 years. It was extended in 1985 until the death of the last surviving child of Mr Ben Dunne snr, plus 21 years. It is understood two of Mr Frank Dunne's children could not benefit from the trust because they were born after 1985, a cut-off point stipulated by Mr Ben Dunne Snr when setting up the trust.

The transfer of shares from the trust to family members means they can bequeath them to their children as they so wish.

Because the Dunne holding company is unlimited, it is not required to publish accounts. However, the group is the largest family-owned business in the State and could be worth well in excess of €1 billion. As well as its outlets in the Republic, it also has outlets in the North, Britain and Spain.

The latest accounts for Dunnes Stores (Bangor) Ltd, which include consolidated accounts for Dunnes outlets in the North and Britain, show a turnover of £219 million (€317 million) in the year to January 31st, 2003, and profits before tax of £40.8 million. Accumulated profits were £164 million.

Sources said the transfer of the shares from the trust would have required the consent of all beneficiaries.