The involvement of Minister of State for Justice Frank Fahey in a hair salon business in Moscow in the 1990s was much deeper than has been reported up to now.
When asked about the salon last month, Mr Fahey said he had "no involvement" in it. He later said he had been misquoted and that he did unpaid work on behalf of the investors who were attempting to set up a salon.
Documents seen by The Irish Times in recent days indicate he was involved in the establishment of the business, its operations over a 22-month period, and efforts to recover the business after it was taken over by its Russian partners in mid-1996.
He was also involved in money transfers and agreements as to payments from the business to third parties.
The business was set up with the assistance of Limerick-based company Irlasto plc, which became a partner.
The new documents show that in 1994 Irlasto told Riada Corporate Finance that Mr Fahey was the promoter of the business and that: "the business is owned 55 per cent by Mr Fahey and his partner, 25 per cent by (Russian partners) DVA, and 20 per cent by Irlasto".
Later Mr Fahey's wife, Ethelle, signed documents relating to the salon business as part of Riada's preparation of an information memorandum on Irlasto.
At the time Mr Fahey queried whether the details of who owned the salon, called Tressals, would be made public by Riada.
Documents indicate the investment in the business was over $300,000, and that it had a total turnover of $1 million in the period September 1994 to April 1996.
Asked to comment yesterday, Mr Fahey said Galway hairdresser Michael O'Connor and his wife, Ethelle, were investors in the Moscow salon called Tressals. Their involvement "ended in April 1996 with significant losses".
"I did unpaid work for the company while I was a senator during this period... When the business got into financial difficulties I acted on behalf of the investors to try and recover their money." He said employees of Irlasto were incorrect in saying he was the owner of the business.
Minutes of a meeting in Moscow in July 1994, attended by Mr Fahey, the two Russian investors, and an Irlasto executive John McCarthy, stated: "Frank Fahey asked if he would be paid for his time on the project. Victor Shenkov said that this issue must be discussed at their next board meeting with Kieran Walshe."
In March 1995 Irlasto executive Maurice Hartery wrote to the manager of the Bank of Ireland, Eyre Square, Galway, to confirm "that relevant contracts are now in place for Mr Frank Fahey's overseas operation, and he will be in a position to transfer funds late next week".
