Five businessmen provided £290,000 to help meet the mounting debts of Celtic Helicopters, the company in which Mr Ciaran Haughey was a co-director, the Moriarty tribunal has been told.
Mr Michael Murphy, the company's insurance broker, provided £100,000, while a further £160,000 was received from property developer Mr John Byrne, Kerry businessman and hotelier Mr Xavier McAuliffe, a Mr Butler, of Butler Engineering, and a foreign investor, a Mr Snowden.
However, although they were issued with shares, none of these investors ever made any money from the business, according to Mr John Barnacle, who was Mr Ciaran Haughey's partner in the company.
In evidence yesterday Mr Barnacle denied ever asking any of the five investors for money on behalf of Celtic Helicopters.
While Mr Ben Dunne had told the tribunal that he had a "vague recollection" of giving him £100,000, Mr Barnacle strongly denied this.
Mr Barnacle trained as a helicopter pilot and established Celtic Helicopters with Mr Ciaran Haughey in March 1985, operating from Dublin Airport. They were the two principal pilots of the company and Mr Barnacle was responsible for the company's financial affairs.
In 1992 the company needed a large injection of capital and had requested assistance from Mr Des Traynor in raising this money, Mr Barnacle said. Mr Traynor had been responsible for finding some of the initial investors for the company in 1985.
Mr Barnacle had told Mr Traynor that they were looking for people to make a capital investment in the company and needed a total of £600,000. Celtic Helicopters did not need £600,000, but wanted this sum to put the company "on a sound footing".
The debts had arisen from "large overruns" on the hangar the company was building.
Mr Traynor managed to raise £290,329 for the company, which represented the investment of the five individuals. Mr Barnacle said that he was informed of this investment in October 1992.
One of the investors was the company's insurance broker, Mr Michael Murphy, who provided £100,000. This amount was drawn on the account of Carlisle Trust and was lodged in Celtic Helicopters' Bank of Ireland account at Dublin Airport on November 27th, 1992.
Meanwhile, Mr Byrne made an investment of £47,532.82, Mr McAuliffe invested £50,000 and Mr Butler invested £25,000 - a total of £122,532. This amount was lodged to the company's bank account on November 5th, 1992.
The tribunal also heard that a further investment of $100,000 was made by Mr Snowden, who was known to Mr Traynor. This money came into the company's bank account on February 9th, 1993, and represented IR£67,000.
In his statement to the tribunal Mr Barnacle said he had never asked Mr Ben Dunne for money or discussed the company's affairs with him. He said he never received three cheques for around £49,000, £79,000 and £50,000 in November 1992 from Mr Dunne or anyone else.
He might have discussed the company with Mr Dunne, but he had never spoken about an investment. As far as he was concerned, the cheque for £100,000 which was in Celtic Helicopters' bank account had come from Mr Murphy.
Counsel for the tribunal, Mr Jerry Healy SC, said that it was Mr Dunne's evidence that he had a "vague recollection" of giving £100,000 to Mr Barnacle. He asked if Mr Barnacle was saying that this never happened. "Absolutely", Mr Barnacle replied.
Some time after February 1993, after the investments had been made, a document had been drawn up which detailed a proposed reconfiguration of the shareholdings in the company. The proposal was to convert the existing holdings described in pounds into new 10p shares. Asked by Mr Healy whether this document was ever sent to the shareholders, Mr Barnacle said that, to the best of his knowledge, it was not.
However, the position of the company deteriorated, and Mr Traynor believed it would be unfair to issue ordinary shares to the investors and that, instead, they should be issued with 7 per cent non-cumulative preference shares at £1 each fully paid up.
On March 25th, 1996, the company issued 290,397 7 per cent non-cumulative preference shares to MS Nominees, a company controlled by Mr Samuel FieldCorbett. According to Mr Barnacle's statement, he understood that the shares would be held in trust for Larchfield Securities and that this company would in turn hold them in trust for Mr Murphy and the other investors.
Mr Healy said that the shareholders of Larchfield Securities were members of Mr Charles Haughey's family.
Mr Barnacle replied that he did not know "officially" who was in Larchfield or who the shareholders and directors were. Asked by Mr Healy what he knew unofficially, he said: "That it is a family company."
Mr Healy asked him: "So the family company, to use your term, were holding the shares in trust for Mr Murphy, Mr Byrne, Mr McAuliffe and Mr Byrne?"
"I believe so", Mr Barnacle replied.
"And Mr Snowden also?"
"Correct, who was in turn holding it in trust for MS", Mr Barnacle said.
Mr John Barnacle, Mr Ciaran Haughey's partner in Celtic Helicopters, who gave evidence yesterday.