A British Department of Trade inquiry in the 1980s into a transaction involving a Cayman Islands company involved a number of figures now known to be linked to the Ansbacher Deposits. Colm Keena reports
A "mysterious payment" of £100,000 (€127,000) made to a Cayman Islands company by a British property company formed a large part of an inquiry in the early 1980s by two inspectors appointed by the British Department of Trade.
The report by the inspectors, Mr John Davis QC and Mr Thomas Garrard Harding FCA, mentioned five people now known to have been connected with the Ansbacher Deposits. They are: the late Mr Des Traynor; the late Mr Liam McGonagle; Mr John Finnegan; the late Mr John Furze; and Mr John Collins.
The inspectors travelled to Dublin as part of their inquiries into share dealings involving a Liverpool-based company called Norwest Holst Ltd. The Liverpool company had property in the Republic and was engaged in a number of proposed property development deals. A payment which was seemingly linked to the company's activities here made for the most bizarre sections of the inspectors' report.
The company had an Irish subsidiary, Rampart Holdings Ltd, which had interests here. Two English property developers who were to buy into Norwest because of its land bank, also had deals here. The men, Mr John Lilley and Mr Raymond Slater, had a company called Stonegate Securities (Ireland) Ltd. In Dublin they were associated with Mr McGonagle, of Kennedy & McGonagle solicitors, and with Mr John Finnegan's Finnegan Menton & Co.
Stonegate began building up a stake in Norwest. In time, Mr Lilley was appointed to the Norwest board. In 1974 he and another board member travelled to Ireland to look at the Norwest deals here.
One involved a town centre development in Drogheda, Co Louth and a company called Drogheda Town Centre Development Ltd. Norwest's partners in the deal were Donnegan Enterprises Ltd, an Irish family company. In October 1972, planning permission was received for a car park, shops, a shopping arcade, and hotel, with permission in relation to an office block being deferred. Sisks was involved in what was to be a £1 million project.
However, by 1974 Norwest wanted to get out of the deal because of cash-flow difficulties. At a meeting in Dublin, Mr George Sisk said he would accept £50,000 for termination of the contract. This was agreed. Kennedy & McGonagle became involved for reasons the inspectors never managed to work out. The amount was paid.
A second deal involved numbers 1, 2, and 3 Kildare Street Dublin, at the time the home of the Kildare Street Club. Number 1, which is now home to Alliance Francaise, was bought by Rampart in 1971 and sold as an investment to New Ireland Assurance Company in 1973. Rampart made a profit of between £80,000 and £100,000 from the deal. Mr Traynor was a director of New Ireland.
THE club, New Ireland and Norwest thought they might make more money from numbers 2 and 3. In 1974, Rampart paid a deposit of £24,000. However when the time came to close the deal, Norwest was having cash-flow difficulties. New Ireland had changed its investment policy and Norwest wanted out of the deal.
Three Norwest directors sought advice from Mr McGonagle and Mr Finnegan. In the end, an agreement was reached that the club would keep the £24,000 deposit and be paid a further £26,000, in return for the termination of the deal. The inspectors looked at the Kennedy and McGonagle file on the matter, which "was very small indeed". The firm was paid £1,500 for its services.
When the Norwest accounts for the year to March 31st, 1975 were being prepared, they showed £200,000 as having been paid in relation to the cancellation of these two contracts, £100,000 more than the amounts detailed above. This second £100,000 was paid by cheque to Guinness & Mahon, Dublin, on December 16th, 1974. It was credited to the account of a Cayman Islands company, British Isles Investments Ltd, which was managed by Guinness Mahon Cayman Trust (now Ansbacher Cayman Ltd).
According to the inspectors's report, British Isles Investments Ltd was a trust "formed in 1971 which happens to be about the time when both Stonegate and Norwest, unbeknown to each other, commenced operations in Ireland; it was also the year when Mssrs Slater and Lilley were first put in touch with Mr McGonagle".
No receipt or bill or written demand was made out for the £100,000 at the time it was paid. The inspectors were given two reasons for the payment. One was that it was an offshore, under-the-table payment to a new Norwest chief executive. The other was that it was a payment to Mr McGonagle, or clients of his, for service in connection with the Sisk and Kildare Street contracts.
Mr McGonagle was well known to Mr Lilley and the two men were involved in business together in the Republic. They also holidayed together. Mr McGonagle was a "fixer" of some reknown, according to Mr Lilley. He told the inspectors: Mr McGonagle "is not a solicitor in the ordinary sense of the word; he is a big developer".
Mr Lilley said British Isles was "some kind of company Mr McGonagle uses to handle fees and put deals through in probably the most tax effecient way to do it".
The inspectors were told the cheque for £100,000 was forwarded to Mr Traynor, the then de facto chief executive of Guinness & Mahon. When they visited Dublin in July 1978, Mr Traynor told them he could help them only to the extent that the interests of his bank's customer, British Isles Investments Ltd, were not compromised. Mr McGonagle refused to meet them, citing legal professional privilege.
During their interviews with Mr Lilley, the inspectors were told Mr McGonagle had helped out in relation to another property, in Crumlin, Dublin, where there was a problem with planning permission. Mr McGonagle, according to Mr Lilley, "arranged for us to see the Prime Minister of Ireland, Mr Lynch, the next morning... That is the sort of power that Mr McGonagle has got. He is a real fixer, Mr McGonagle, there is no doubt about that".
The inspectors decided the £100,000 was not an under-the-table payment to the new Norwest chief executive, as mentioned above. They decided it was an under-the-counter payment to Mr Slater and Mr Lilley, relating to their work for Norwest here and in the UK, and that the two were making up the story about Mr McGonagle in order to hide this fact.
AS part of their inquiries the inspectors wrote to Mr Collins and Mr Furze, the two Cayman bankers who ran Guinness Mahon Cayman Trust along with Mr Traynor. Mr Furze wrote to the inspectors saying that no one connected with Norwest "is in any way involved directly or otherwise with British Isles Investments Ltd or with the trust which owns it". The inspectors decided to give no credence whatsoever to any statements made by the Cayman banker.
In another letter, Mr Furze said he and his colleagues had been visited by the Cayman fraud squad as a result of the inspectors' inquiries. "We have found this extremely distressing." He sought a resolution from the Norwest board stating that British Isles Investments Ltd had nothing to do with whatever problems Norwest Holst might have.
At one stage Mr Lilley told the inspectors that the Irish business world was like a "jungle". More is known now about the jungle that was the Irish business world in the 1970s and 1980s as a result of the discovery of the Ansbacher deposits. It is now known that Mr Finnegan and Mr McGonagle both had Ansbacher accounts.
The long-awaited report of the High Court inspectors into Ansbacher Cayman, which may be presented to the court before the summer, may shed some light on who owned British Isles Investments Ltd.
