The ongoing tribunal of inquiry into complaints against Wexford accountant Alan Hynes finished its eleventh day of evidence on Tuesday, and is to resume hearings next week.
The chairman of the Chartered Accountants Regulatory Board tribunal, JP McDowell, has repeatedly made his frustration apparent at the slow pace at which the inquiry has proceeded.
In April, he asked Hynes (45) to draft a report setting out exactly what his response was to the allegation that €3.1 million of the approximately €18 million investors put into the failed property venture, Tuskar Asset Management plc, (Tam) had not made its way to Tam.
The allegation was made by Neil Hughes, of Hughes Blake, who is liquidator to Tam. Hughes has produced for the tribunal a list of investors and their investments, which he says did not reach Tam.
Investors funds
On Monday, when Hynes began to take the tribunal through his analysis, McDowell on a number of occasions again expressed confusion and frustration.
Hynes said his analysis fully accounted for all of the investors’ funds and showed that he had neither “diverted nor misappropriated” any of the money. He said Hughes comments on the matter were “flawed”.
Hughes, in a written response to Hynes’ analysis, said he did not understand his fellow accountant’s explanations. “As far as I am concerned, notwithstanding his claims, Mr Hynes has not accounted for all the investors funds,” Hughes said.
Hughes said it was his view that money investors intended for Tam that should have been lodged to a Tam account in the first instance but instead some of the money was channelled through other group companies or service provider accounts, for other projects and purposes, without investor knowledge or approval. Only €12.5 million was lodged directly into the Tam account with Bank of Scotland.
Hughes also took issue with Hynes stating that investors had received value for their money by way of certain transactions. One such claim concerned a €2 million deposit allegedly paid by a Tam subsidiary on a site in Cunningham Road, Dalkey, Co Dublin.
As has since been found by a judgment of the High Court, the money used came not from the investors but from AIB and was part of a loan issued by that bank to Hynes and his wife, Noreen, for the repayment of an Anglo Irish Bank loan secured against a site in Wexford. (The solicitors firm involved, Seamus Maguire & Co, has since been sued successfully by AIB for breach of contract.)
'Balancing figure'
"Accordingly, there is no basis whatsoever for any claim that the Tam investors got any value for this payment," Hughes said.
The Tam accounts show a payment of €1.72 million to a subsidiary to allow the subsidiary pay the Cunningham Road deposit. Hughes said the deposit in fact came from AIB. He said €1.37 million – the remaining balance of the €3.1 million he says is unaccounted for – is described in the Tam books as “a reimbursement to Alan Hynes”.
He disputes this and says that the €1.37 million figure is simply “a balancing figure” used to bring the total up to €3.1 million and thereby account for the investors’ funds that were not lodged to Tam.
The complaints against Hynes relate not just to the Tam project but also to a number of other property ventures into which investors put money. Some of these projects were later subsumed into Tam.
The projects include the financial involvement of Mr and Mrs Hynes on a personal basis as well as a company they owned, Tuskar Property Holdings Ltd (not part of the Tam group), acting as a project manager and an organiser of finance. Noreen Hynes is due to give evidence, possibly next week.
