Mr Conor Haughey will eventually "settle" the money given to him by financier Mr Dermot Desmond to pay for the renovation of his family's yacht, he has told the Moriarty tribunal.
The bills for the renovation of Celtic Mist, which totalled £75,546, were accrued between April 1990 and February 1991, at a time when Mr Haughey's father was Taoiseach.
He told the tribunal yesterday "there was no formal arrangement and no time for the paying back of the loan and no arrangement as to any interest" on it. He regarded the loan as "a personal commitment" which he "proposed to settle at some time in the future". While at present he did not intend to sell the boat to repay the loan, "that option is not and has never been ruled out".
Mr Haughey said he could not say what Mr Desmond's reasons were for loaning the money on such generous terms, but speculated that as he was involved in promoting sailing, Mr Desmond "probably considered that the boat used by the Taoiseach of the country at the time . . . should represent the country in a good light".
Mr Haughey said he had approached Mr Desmond about financing the repairs because he was a family friend and a trusted adviser. He had advised Mr Haughey personally on some of his business affairs, mainly in relation to Feltrim Mining Ltd. Mr Desmond had also commissioned yacht provider Mr Ron Holland to build a boat for Sail Ireland at a cost of £4 million.
"I thought he would be well placed therefore not only to advise me of the best way of funding the works of refurbishment, but also in securing the best possible price with Ron Holland." When he mentioned his need for finance for the restoration of the boat to the stockbroker, Mr Haughey recalled he said "in Dermot Desmond's style . . . `Leave it to me, I'll look after it'." By that he understood Mr Desmond was going to provide the finance himself.
Mr Haughey said at the time he estimated the cost of the refurbishment at £20,000 to £25,000.
Mr Haughey said he had not been worried about paying that kind of figure because of his involvement in Feltrim Mining.
"People in mining companies generally think they're going to make a fortune in the near future. At the time, £20,000 or £25,000 was a manageable figure that could have been repaid from share options. I knew there was no immediate pressure to repay it straight away."
Mr Haughey first spoke to Mr Desmond about repaying the loan after April 1992.
When Mr Jerry Healy SC, counsel for the tribunal, asked if anybody "decided we better sell the boat, mortgage the boat, do anything like that to raise finance", Mr Haughey replied: "No, because Mr Desmond wasn't pressing us for repayment". Routine maintenance and day-to-day expenses of the boat "are dealt with on an ad-hoc basis by the family and sailing friends who act as crew when necessary", Mr Haughey said. Insurance is funded by the former Taoiseach and credited to his loan account with Haughey family company Larchfield Securities.
Mr Haughey's understanding of the informal arrangement with Mr Desmond was that the loan was backed by shares he owned in Feltrim but agreed he agreed with Mr Desmond's counsel, Mr Bill Shipsey SC, that "there was no pledge or security of those securities".
He agreed with Mr Healy that what had been "a loose and informal arrangement for £25,000" eventually became an arrangement for £75,000. The cost of the refurbishment had "escalated" after it was discovered that there was rust in the hull of the yacht.
Asked how the loan would eventually be disposed of, Mr Haughey said "not necessarily financially settled - even though I do consider that's the way it will be settled - but by some means".
He agreed with Mr Healy that the settlement would involve paying Mr Desmond some money or giving him the boat or swapping it for another boat. After evidence from accountant Mr Kieran Ryan, the tribunal adjourned until Tuesday. Mr Healy told the chairman that the next witness they proposed to call was "out of the country for a number of days".
Agreeing to the adjournment, Mr Justice Moriarty said there would be "a relatively substantial remaining completion phrase to be carried out before Christmas".
