Almost half a million pounds was lodged to the personal accounts of a director of house builders Bovale Developments Ltd and his wife during a three-year period. During that period their combined net earnings totalled just £60,000, the tribunal heard yesterday.
The money was lodged to the accounts of Bovale director Mr Tom Bailey and his wife, Caroline, between 1989 and 1991. Ms Caroline Bailey confirmed that the money came from Bovale Developments Ltd.
A further £117,980 was lodged to the account of the company's other director, Mr Michael Bailey, over the same period.
Counsel for the tribunal Mr Desmond O'Neill SC asked Ms Bailey if it followed that since these figures did not appear in the accounts as directors' loans, the accounts were altered to disguise the payments as legitimate expenses.
Ms Bailey said she did not know if they appeared as directors' loans in the accounts.
Mr O'Neill said the company auditor, Mr Joseph O'Toole, had told the tribunal that the only directors' loans recorded in the books for that period were ones totalling £51,000, of which £4,000 was repaid.
"I don't know," Ms Bailey replied.
Mr O'Neill said he wanted to know how she accounted for over £500,000 of Bovale money which found its way into three personal bank accounts. Ms Bailey said she couldn't recall.
Mr O'Neill suggested there must have been a system set out to hide consciously these payments, adding that it would have been conceived by her as the company bookkeeper.
"Perhaps, yes," Ms Bailey replied. She could not recall.
Mr O'Neill put it to her that she had devised a method through which money could be siphoned out of the company. It wasn't a random process and did not happen by accident, he suggested. Ms Bailey agreed.
He said she would have been the obvious person to devise the system. Ms Bailey replied that he had spent the day before pointing out flaws in her bookkeeping and now he was trying to make out she was a genius.
To further questions she said the scheme might have been devised by three people - herself, her husband, Tom and his brother Mr Michael Bailey.
She said Tom and Michael Bailey shared the proceeds of the company. Mr O'Neill asked how it was that she and her husband Tom took £286,000 out of the company and lodged it to their account in 1991 and only £80,000 went into the personal account of Michael Bailey in that year. She said she didn't know and "couldn't care less" how Tom and Michael balanced things up.