Cork County Council has asked An Garda Síochána to investigate a land deal where the council agreed to buy 20 acres for €11.6 million at a time when the land was allegedly available for €8 million, writes Colm Keena, Public Affairs Correspondent
The Irish Times has learned that the council entered into talks over the land with two bank executives in October 2005, when the executives had not yet agreed to buy the land from property company Pushkin Developments.
Pushkin was seeking €8 million for the 20 acres of zoned land in Charleville, had engaged a selling agent, and had placed advertisements in the national press.
Permanent TSB branch manager in Cork Denis O'Reilly and Cork area branch manager Brian Cremins signed the contract with the council. They, and any partners they may have, stand to make a €3.6 million profit if the deal goes ahead. The contract for purchase was signed in April last but the sale has not been closed. It is not unusual for purchasers of property to engage in a sub-sale.
Pushkin Developments, which agreed to sell the land to Mr O'Reilly for €8 million in November 2005, complained to the council when it subsequently found out the land was being sold on for €11.6 million.
The sale is now the subject of legal proceedings between the council and the bank executives, a council spokeswoman said yesterday. Mr O'Reilly and Mr Cremins were not available for comment. It is understood they are suing the council.
A spokesman for Permanent TSB said the deal was "a private matter for the two individuals concerned and it would not be appropriate to comment".
A council spokeswoman confirmed the Garda had been contacted. "Because the unverified complaint made to the council suggested that persons outside the council itself had some involvement, the matter was referred to the gardaí on 1st June, 2006." She said the contract for sale was with Mr O'Reilly and Mr Cremins.
"The council signed a contract for the purchase of approximately 20 acres zoned house building at Charleville, Co Cork, for €11.6 million on 24th April last. The closing of the sale has not been completed and is the subject of legal proceedings between the council and the vendors," she said.
"Some time following the signing of the contract, the council received a complaint which suggested that these lands could have been purchased by the council at a lower price than that paid. However, this suggestion has not been verified by the complainant but is the subject of internal investigations by the council in accordance with its procedures for dealing with such matters."
John Daly, of Pushkin Developments, vendors of the land to the bank executives, complained to the Cork county manager Maurice Moloney in May. In a letter to Mr Moloney, he said: "We first found out about the Cork County Council's intention to purchase these lands two weeks ago when (the purchaser's) solicitor forwarded the deed of transfer to our solicitor indicating Cork County Council as the ultimate purchaser."
He said his company had accepted an €8 million offer for the lands on November 7th, 2005, and signed a contract on December 22nd, 2005.
"I now understand that Cork County Council entered into discussions with Mr O'Reilly in October 2005. At that time the site was advertised in the national press and Mr O'Reilly did not own it.
"If Cork County Council was in fact interested in the lands why did they not contact our selling agent?"
Pushkin Developments is 50 per cent owned by Mr Daly with the remainder owned equally by Tim Murray and Peter O'Sullivan.
After solicitors for the bank executives made contact with the council in October 2005, the council appointed a land valuer, John O'Connell of Mallow, to value the lands, and negotiations proceeded on that basis.
In his letter to the county manager, Mr Daly said that Pushkin Developments had originally purchased the lands for €4.5 million in late 2004 and that prior to that sale an agent for the vendors had contacted Cork County Council and been told the council was not interested in the lands. It is not known if this has been confirmed by the council.