A DECISION will be given on Thursday on an application by Anglo Irish Bank for possession of the home of former Smart Telecom chief executive Oisín Fanning over his alleged failure to repay a loan.
The bank yesterday applied for court orders requiring Mr Fanning and his partner Pearl Roche to deliver up possession of Forenaughts House on 24 acres at Forenaughts, Naas, Co Kildare.
The bank claims Mr Fanning and Ms Roche have defaulted on a loan given to them in 2006 to enable Mr Fanning buy €5 million worth of shares in Smart Telecom and to allow the couple to refinance an existing €2.9 million mortgage on Forenaughts.
The amount outstanding is now more than €8.6 million, the bank says.
Mr Fanning, who was in court, claims he is not responsible for the repayments and alleges pressure was put on him to take out the loan by businessman Brendan Murtagh, who took over Smart Telecom in 2006.
He claims Mr Murtagh told him, as chief executive of Smart, that he would have to be seen to be investing as part of a €44 million fundraising drive for Smart.
Mr Fanning argues that the Anglo loan was really a loan to Mr Murtagh. He claims Mr Murtagh got Anglo to provide the loan despite the fact that two years earlier, the same bank had told Mr Fanning it would not be interested in funding him or his company.
Mr Fanning says he did not have the financial capacity to repay such a loan. He claims Mr Murtagh knew this and Mr Murtagh had agreed to make the repayments from Smart. Interest repayments were made by Smart between June 2006 and January 2007, Mr Fanning claims.
Mr Fanning and Mr Murtagh are involved in separate pending legal proceedings arising from the October 2006 buyout of Smart by Smart YuRoE Broadband, a company controlled by Mr Murtagh.
Anglo claims the loan to Mr Fanning and Ms Roche was secured on the basis of the bank having first legal claim over the Smart shares and over Forenaughts House. The bank is now seeking to exercise power of sale over Forenaughts.
In an affidavit, Anglo associate director Paul Corry said that without vacant possession, the house would be “virtually unsaleable”. Mr Corry also said it was the bank’s case that the house was not covered by the Family Home Protection Act 1976.
Mr Fanning, in an affidavit, said that when he voiced his concern to Mr Murtagh about having to remortgage his home as part of the loan arrangement to buy shares, Mr Murtagh “reassured me and gave me his word that under no circumstances would my family home be at risk”.
The loan was advanced not, on the security of Forenaughts, but on the basis of assurances from Mr Murtagh who had a long-standing business relationship with Anglo that it would be repaid, he said.
Mr Fanning said he was surprised that Mr Corry, who dealt with the loan application, “appeared not be concerned in any way” about Mr Fanning’s ability to repay the loan even though he had a limited earning capacity.
In an effort to resolve the dispute with Anglo, Mr Fanning said he offered to split the loan between the €2.9 million for the home and the share purchase element but all the bank had offered was a six-month moratorium.