A letter which links Michael Lowry to a £4 million sterling property deal in 1998 was used in attempt to squeeze money out of Denis O'Brien. Colm Keena reports
A complaint was lodged with the police in London last year by representatives of Mr Denis O'Brien following the production of a letter to Mr Michael Lowry during a mediation hearing involving Doncaster Rovers Football Club Ltd.
According to sources, the letter was produced in an attempt to put pressure on Mr O'Brien's representatives to pay over a significant amount of money to the vendors of the company, which Mr O'Brien says he now owns. According to one source the response was: "f . . . off!"
The dispute between the two sides was then settled and a payment made which did not include any money for suppressing the letter. The letter has since been shown to The Irish Times and the whole issue is likely to be examined now by the Moriarty (Payments to Politicians) Tribunal.
While part of the background to the story of the letter involves one party trying to get money from Mr O'Brien through the use of a letter which would cause him embarrassment, no-one involved has disputed the authenticity of the document. It is understood the tribunal has not seen the letter before.
The author of the letter, Northhampton solicitor Mr Christopher Vaughan, has told The Irish Times that he wrote it in September 1998 when he was under the mistaken impression that Mr Michael Lowry was involved in the purchase of Doncaster Rovers Football Club Ltd, a company which held a lease on the football stadium in Doncaster. The consideration involved was approximately £4 million sterling.
Mr Vaughan was the solicitor involved in the purchase of four English properties in the late 1990s, transactions which also involved Mr O'Brien's then accountant, Mr Aidan Phelan. The properties were: the Doncaster stadium; a small office development in Luton; a property in Mansfield; and a property in Cheadle.
The tribunal has been told by Mr O'Brien that he bought the Luton offices and the Doncaster stadium and that he had nothing to do with the other two transactions. He has said he knew nothing of the Mansfield and Cheadle transactions until they were just about to come to the attention of the tribunal. He bought the Luton property in partnership with his then accountant, Mr Aidan Phelan.
A businessman based in Northern Ireland, Mr Kevin Phelan, who is not related to Mr Aidan Phelan, was also involved in the transactions. Mr Kevin Phelan is a businessman who locates properties in the UK which he believes might be of interest to Irish investors.
He was the catalyst for the Doncaster deal, having spotted its potential. Mr Aidan Phelan, the tribunal has been told, fronted for Mr O'Brien in the deal.
The tribunal has been told that in July 1998 Mr Lowry was contacted by Mr Kevin Phelan in relation to the property in Mansfield. Mr Lowry put down a £25,000 sterling 10 per cent deposit on the property and then went to look to raise the balance. In March 1999 Mr Aidan Phelan sourced the balance for him, paying the money into the client account in Mr Vaughan's practice. Mr Lowry and Mr Aidan Phelan have said they subsequently signed a joint venture agreement.
The letter written by Mr Vaughan, in September 1998, was written in between Mr Lowry becoming involved with the Mansfield property, and his closing the deal. Mr Lowry subsequently became involved in the purchase of a property in Cheadle, for in excess of £420,000 sterling. Again Mr Vaughan was involved.
The bulk of the shares in Doncaster Rovers Football Club Ltd were bought by an Isle of Man company, Westferry, in August 1998. The shares bought by Westferry were held for it by Walbrook Trustees, a trust company owned by Deloitte & Touche in the Isle of Man.
The shares in Doncaster Rovers Football Club Ltd were sold by Dinard Trading, an Isle of Man company. The beneficial owner was an English businessman, Mr Ken Richardson, who it is understood is known in Irish horse-racing circles.
The lease on the Doncaster stadium could become a very valuable asset if a new stadium for the Doncaster team was built outside Doncaster city centre, the team relocated, and permission given for the development of the old stadium site, which is in a prime location for a commercial development such as a shopping centre.
Mr Richardson was charged and convicted in 1999 of trying to burn down the Doncaster grounds in 1995. Mr Richardson was convicted of conspiracy to commit arson and jailed for four years. Sheffield Crown Court was told that the wealthy businessman offered £10,000 sterling to a former SAS soldier to start the fire at the club's grounds, causing damage put at £100,000 sterling.
The prosecution said Mr Richardson's intention was to try to force Rovers to move to a new stadium.
The plan failed when Mr Alan Kristiansen, who was hired to start the fire, left his mobile phone at the scene and a message on Richardson's answering machine saying: "The job's been done."
When Westferry was buying the stadium, some money, understood to be approximately half a million pounds sterling, was placed by the purchaser in a joint account controlled by Mr Vaughan and the solicitor acting for Mr Richardson.
These "retention funds", which are referred to in Mr Vaughan's letter, were to be paid out in whole or in part to Dinard depending on liabilities which might or might not arise after the sale of the shares to Westferry.
When the time came at the end of 1998 the two sides could not agree on how much of the retention money should be paid on to Dinard. Mr Richardson's side initiated litigation against Westferry. This led to a mediation hearing before an English barrister last autumn during which the letter from Mr Vaughan was produced.
A payment was made which settled the matter and the size of which was not affected by the introduction of the letter. The Doncaster Rovers deal is now likely to be investigated by the Moriarty tribunal. It is a significantly larger deal than the Cheadle and Mansfield ones. Mr Aidan Phelan has said it will be shown that the deal was at all times being done soley on Mr O'Brien's behalf.