An offshore bank deposit was used as security to back a bridging loan taken out by the former EU commissioner, Mr Peter Sutherland, the tribunal heard yesterday.
Mr John Coughlan SC, for the tribunal, said a Guinness & Mahon file on the loan - provided to the tribunal at Mr Sutherland's request - contained one page of a bank statement in the name of Guinness & Mahon, Channel Islands. The statement covers April 28th to December 31st, 1976, when the balance on the account was £12,296.71.
Mr Coughlan said that while Mr Sutherland appeared not to have held a deposit account in Guinness & Mahon at the time, he had informed the tribunal that his father-in-law, a Spanish national, had set up a discretionary trust in the Channel Islands through the bank. He said Mr Sutherland had not been able to establish for certain that the offshore account used to back his loan was the one used for that trust.
Mr Sutherland sought the bridging finance from Guinness and Mahon in 1977 to buy a £37,000 family home in Dublin.
He told the bank he intended to get long-term mortgage finance of £20,000 and to sell his family home in Dublin, which was expected to raise another £20,000. This bridging finance was "an immediate requirement of £5,000 by way of a deposit on the purchase price", Mr Coughlan said.
The facility was granted, subject to a solicitor's undertaking to hold the title deeds in trust for Guinness & Mahon, and to lodge the proceeds of the sale of Mr Sutherland's house with the bank. He was not aware that the offshore account had been connected with his bridging loan.
Although the loan in question was initially envisaged as bridging finance, it "was extended from time to time and was not in fact cleared until late 1980", Mr Coughlan said.
Mr Sutherland was "not himself the source of, or the person entitled to, any funds in an Ansbacher account", Mr Coughlan said.
However, payment within the meaning of the terms of reference of the tribunal had been interpreted as including benefit in kind. "The tribunal has interpreted benefit in kind as embracing the provision of the facility of a backing security where that security consists of an offshore deposit account connected with the Ansbacher account," Mr Coughlan said.
Mr Sutherland had provided full assistance to the tribunal in its investigations, Mr Coughlan added.
