The JMSE group accused Mr James Gogarty of misappropriating £700,000 which was being held in an account controlled by his solicitor, but he denied this, the Flood tribunal was told yesterday.
The £700,000 was an outstanding payment by the ESB for contracts carried out by JMSE at the Moneypoint plant in Co Clare. The sum had been negotiated by Mr Gogarty with the ESB, and he had been promised a commission on it.
Mr Gogarty's solicitors, McCann Fitzgerald, stated in correspondence that the money was properly held on deposit in an account entitled "McCann Fitzgerald - JMSE Ltd".
In the witness-box, Mr Gogarty said he had never agreed to a waiver and did not see the letter until it was discovered by the tribunal.
Mr John Gallagher SC, for the tribunal, read out numerous letters and documents. In a letter of November 10th, 1989, from JMSE to Mr Gogarty's solicitor, Mr Gerald Sheedy, the company said Mr Gogarty had misappropriated the £700,000.
The letter stated that nobody gave them the authority to misappropriate funds or gave him the right of offset. JMSE also threatened to go to the Law Society to file an official complaint.
In reply, Mr Gogarty's solicitors referred to the "libellous letter" that alleged the misappropriation of £560,000 excluding VAT. A sum of £185,000, which was the amount remaining after a lump sum of £300,000 agreed in October 1989 as part Mr Gogarty's pension terms and £215,000 commission had been deducted, was transmitted to JMSE on November 13th, 1989.
In another letter from Mr Sheedy it was stated that Mr Roger Copsey, JMSE financial controller, was endeavouring to have the pension purchased by a company other than JMSE.
Mr Gogarty said the main trading company was JMSE. That company had employed him for 20 years. No other company paid him salary or commission, "but you can read between the lines".
He said he was not a director of Lajos Holdings Ltd, a holding company of which the Murphy group was a subsidiary. He had resigned as director in June or July that year.
"Sure the evidence will come out. It was all a ruse," he said.
Mr Gallagher asked him if he was consulted by Mr Copsey about any tax liability.
Mr Gogarty said he was not.
Mr Garrett Cooney SC, for JMSE, pointed to the first condition of the retirement agreement. That said that Lajos would make available £300,000 through JMSE or any other group companies for the purposes of the purchase of a pension for Mr Gogarty and his wife.
Mr Gallagher read a fax dated November 27th, 1989, from Grafton which stated that the pension would be transferred to Irish Life Assurance Co Ltd.
In a letter from Mr Sheedy to Mr Copsey dated November 30th, 1989, the solicitor said it was Mr Gogarty's wish to have the pension agreement implemented without variation. An allegation about misappropriation of funds should be withdrawn immediately.
It was their intention to go to court to resolve the issue. They asked for confirmation by letter that the funds were properly held and that they would continue to hold the funds.
In other evidence yesterday, in a letter from Mr Copsey to the Revenue Commissioners, it was stated that Mr Gogarty and JMSE had reached an agreement to waive his commission of £215,000 for obtaining the sum from the ESB.
In a letter dated November 28th, 1989, from Mr Copsey to the Inspector of Taxes, it was stated that the reason Mr Gogarty agreed to the waiver was that he had agreed to another similar sum from another group company.
Mr Copsey referred to the agreement under which Mr Gogarty would receive a bonus on the completion of successful negotiations with the ESB, and said that an agreement was reached between JMSE and Mr Gogarty to "waive the bonus".
Mr Gallagher said that in the letter Mr Copsey had said there was agreement between JMSE and Mr Gogarty to waive the bonus. Had he ever agreed?
Mr Gogarty said: "Never".
Counsel asked if he had been aware of the letter.
Mr Gogarty: "No, not until discovery. I've been called a liar and everything by that crowd over there. I don't want to go too far at the moment."
Mr Cooney said it was quite clear in the letter that Mr Copsey was trying to come to an agreement with the Revenue.
"Behind my back," said Mr Gogarty.