John Byrne was one of the most substantial customers of Ansbacher Cayman, but told report inspectors that he did not have full control over rusts in the Caymans, writes Colm Keena
The Ansbacher Report contains more details about the wealthy and publicity-shy property developer, Mr John Byrne, than has hitherto come into the public domain.
Mr Byrne was, and is, probably the most substantial Irish resident customer of Ansbacher Cayman, formerly Guinness Mahon Cayman Trust. The Ansbacher inspectors did not agree with Mr Bryne's view that two extremely valuable trusts he established in the Cayman Islands in the 1970s were not under his control. This is a crucial legal finding which Mr Byrne argued strongly against and which could have substantial tax implications if accepted by the Revenue.
The two trusts contain, respectively, assets which arose from Mr Byrne's activities in the UK and in the Republic over the past 50 years or more. Mr Byrne has been involved in property development, leasing and the running of dance halls.
An internal document from Irish Intercontinental Bank, now IIB Bank, from April 1994 stated that loans totalling £19 million sterling were out to companies associated with Mr Byrne, with these loans being backed by cash from the Ansbacher deposits. At the time the total amount of Cayman money on deposit in Irish Intercontinental Bank was £21 million sterling.
A March 1992 internal memo written by an executive of Irish Intercontinental Bank, Mr John Reynolds, recorded a meeting with Mr Paul Carty, then a senior partner with Deloitte & Touche and formerly a partner with Haughey Boland. Mr Carty, who is now retired, was a close friend and colleague of the late Mr Des Traynor.
Mr Reynolds recorded in the memo that the meeting with Mr Carty followed one with Mr Traynor and that both concerned a £1.75 million sterling loan which would be taken out by Tepbrook Properties Ltd, a UK registered company "which I have been advised by Messrs Traynor and Carty is beneficially owned by Mr John Byrne of Carlisle". (Carlisle Trust Ltd is one of Mr Byrne's principal Irish companies.)
Tepbrook was to buy two sites in Cricklewood, London, for £3 million. The memo stated that a further site, which could be developed for a Gateway supermarket, was also being looked at.
"Carty advised that they would require a fiveyear term loan which it was agreed would be secured by an Ansbacher guarantee supported by cash along with a deposit of the title deeds to the two properties."
When he was being interviewed by one of the inspectors, Judge Sean O'Leary, Mr Byrne was asked about the fact that the backing given to the loans taken out by Carlisle Trust was not noted in the company's accounts.
Judge O'Leary said: "As far as I am concerned the accounts of the company never disclosed the back-to-back facility and I am further advised that at least after 1986 this was wrong. Did anyone ever bring that to your attention?" Mr Byrne said: "No."
Another inspector, retired accountant Mr Paul Rowan, said Haughey Boland (now Deloitte & Touche) acted as auditors to some of Mr Byrne's companies. He said the internal IIB Bank memo showed that Mr Carty was aware of the backed loans.
"So in effect that meant that Haughey Boland were aware of the nature, the correct nature, of the back to back arrangments?" Mr Byrne said he couldn't answer that question. However, he agreed with Mr Rowan that it was the implication of what the memo recorded.
Subsequent to the interview Mr Byrne's solicitor, Mr Anthony Gore-Grimes, wrote to the inspectors and said his client did not accept that Carlisle Trust, or any of the Irish companies which had loans backed by cash deposits from the Cayman Islands, were required to record the details of the backing in their accounts. He enclosed a submission on the issue he had received from a senior counsel.
Mr Byrne included a brief biography or summary of his career in a letter to the inspectors. He said he was born in Co Kerry in 1919, and emigrated to England during the second World War, in 1941. "I started out like many of my compatriots in construction and eventually built up a substantial building and property development business. I also involved myself in the development and operation of a number of dance halls and ballrooms in the UK, which were focused on the large population of young Irish immigrants in Birmingham, Coventry and London."
Mr Byrne wrote that in the early 1960s he was invited by the late Mr Seán Lemass and the late Mr Seán MacEntee to become involved in property development in Dublin. His first development was O'Connell Bridge House, the large office building in Dublin which was leased to the State for 35 years. The company used was Carlisle Trust. His second venture was an apartment block, St Ann's, on Ailesbury Road, Dublin. His third, D'Olier House, on D'Olier Street, Dublin, was built by another company, Dublin City Estates Ltd, in 1969. "My principal activities were still being carried out in the UK."
Mr Byrne also had an interest in the Brandon Hotel, Tralee, Co Kerry. It was through this hotel that he first met Mr Traynor, he told the inspectors during his interview. "The first time I met Mr Traynor was around 1960 . . . the first time I really met him at close quarters was the first time he came down to do an audit in the Brandon Hotel, in Tralee."
Mr Traynor, and another accountant then working with Haughey Boland, Mr Jack Stakelum, "came down to do the audit some time in the afternoon and they worked all night. I said I would see them in the morning and they were gone . . . So I said, 'God, these are some characters'."
In his letter, Mr Byrne said Mr Traynor was his accountant by the mid-1960s and soon became his financial adviser in the Republic.
MR BYRNE established two trusts with Guinness Mahon Cayman Trust in August 1971, the year Mr Traynor established the Cayman bank. "My business ventures in England were substantial and as I was becoming involved to an increasing extent in Irish property development, I was concerned to minimise my family's exposure to what was then known as estate duty in the event of my death."
He took advice and was told it was legal to establish the trusts he established. One, the Tristan Settlement, was established in relation to his UK business, and another, the Prospect Settlement, in connection with his Irish business.
The Prospect trust was established so that Mr Byrne could control his Irish development companies while they would be ultimately owned by a Cayman trust. In the Tristan case the trust controlled the UK companies. "I do not control the trusts or the Cayman companies owned by the trusts. I do not have power to enjoy income from either."
Mr Byrne said he had tried to get documentation about his two trusts from the Cayman Islands for the inspectors and for the Moriarty tribunal but that the Cayman trustees had refused to co-operate. He and his solicitor, Mr Anthony Gore-Grimes, travelled to the Cayman Islands and took legal advice there but that changed nothing. "It has been a pain in the neck," he told the inspectors. "We came back with our tails between our legs."
Judge O'Leary said he found this hard to accept.
Tepbrook Properties, a UK companies ultimately owned by the Tristan Settlement, was immediately owned by an Australian company, Danstar Holdings Pty, one of the directors of which was a Mr Ron Woss, who himself was found to be an Ansbacher customer. Mr Woss did not co-operate with the inspectors' inquiry.
The most recent filings for Tepbrook in the UK companies office show that its shares, which had been owned by Danstar Holdings, have been transferred to Tristan Securities, the Cayman company owned by the Tristan trust and which was the owner of Danstar. In other words, the Australian element of the structure has been cut out.
Why it existed in the first place is not known. Mr Byrne lives in Simmonscourt Lodge, a large house on a number of acres in Ballsbridge, Dublin. He has been afriend of Mr Charles Haughey for more than 40 years and has given evidence to the Moriarty tribunal in relation to a cheque from him, Mr Byrne, which ended up in an account controlled by Mr Traynor and linked to payments to Mr Haughey.
He also invested in Celtic Helicopters. Mr Byrne told the tribunal he has never knowingly given a penny to Mr Haughey.
Mr Traynor controlled the Ansbacher deposits, was financial adviser to Mr Byrne, and was chairman of the bank which acted as trustee to Mr Byrne's trusts.
He "was wearing a lot of hats" when dealing with Mr Byrne's affairs, Judge O'Leary commented during his interview with Mr Byrne.
"Well, he was I suppose," Mr Byrne said.