The Doyle Hotel group may be asked to sign an indemnity against costs which could accrue to it as a result of the work of both the Moriarty and the Flood tribunals.
The issue has emerged during the preparations for a proposed £200 million buyout of the Doyle group by the Jurys Hotels group. The indemnity would be designed to protect Jurys from any costs which might result from discoveries made by one or both tribunals. The Irish Times has learned that Jurys is concerned that it should be indemnified in the event of Doyles becoming the subject of investigation by the Flood tribunal. However, it is not clear why this concern has arisen. The tribunal is inquiring into alleged corruption in the planning process.
In relation to the Moriarty tribunal, Jurys has concerns in relation to taxation, exchange control laws and Central Bank and accounting regulations.
A spokesman for Doyles said last night that the Flood tribunal had not been in contact with the group. Asked if an indemnity covering both tribunals was being sought by Jurys, he said the two sides were "negotiating the normal warranties and indemnities associated with a transaction of this size and complexity". He would not comment further on the issue. A spokesman for Jurys declined to comment.
Last week, the Doyle group confirmed to The Irish Times that it was co-operating with the Moriarty tribunal in relation to overdraft facilities in Guinness & Mahon bank in the name of the late P.V. Doyle, the founder of the group. The facilities may have been used for the benefit of Mr Charles Haughey. The company paid more than £150,000 to clear the accounts following Mr Doyle's death in 1988, and subsequently recouped the money from Mr Doyle's estate.
The company is also in contact with the tribunal in relation to a £1 million loan from Guinness Mahon and Co Bank in London, which was backed by a deposit of a similar amount lodged on behalf of Doyles with Guinness Mahon Cayman Ltd, in the Cayman Islands. The Moriarty tribunal is inquiring into the finances of Mr Haughey, the former Taoiseach, and Mr Michael Lowry, a former Fine Gael minister.
A range of difficulties have emerged during the preparations for the signing of the share purchase agreement between Jurys and Doyles, though both companies have insisted that no issue has emerged which would jeopardise the proposed buyout. Spokesmen for both companies said last night that this was still the case.
It has now emerged that difficulties which have been discovered concerning liquor licences for six of the Doyle hotels are compounded by the fact that planning permission difficulties exist in relation to at least some of the premises. Proper planning permission is one of the requirements needed for new applications for liquor licences. At least some of the group's hotels were built by Doyle-owned construction companies.
The spokesman for the group said that "if there are any planning permission issues, they are of a minor nature and will not impact on the normal renewal of our liquor licences".
Jurys is understood to believe that the Doyle group suffers from weaknesses in its financial reporting and management arrangements, and that these have complicated preparations for the buyout. Asked about this, the Doyles' spokesman said Doyles "is a successful and profitable and well managed company and the financial reporting procedures meet all the requirements of the business".
Jurys is also understood to have identified a number of potential tax liabilities which may arise from transactions and accounting decisions made by the Doyle group. These are in addition to concerns about possible capital acquisition tax liabilities linked to the Doyle stock. As reported last week in The Irish Times, indemnity cover for possible capital acquisition tax liabilities is being sought by Jurys.
