Builder's French land sale money is given to Revenue
A BUILDER has been forced to hand over proceeds from the sale of land in France to the Revenue Commissioners following an investigation involving forensic accountants.
The existence of the property was uncovered after accountants working for a Revenue-appointed liquidator followed the trail of a series of unexplained cash transfers made from the building company's bank account.
Details of the investigation emerged in papers lodged with the High Court during the liquidation of Ellbyr Ltd, a firm which was run by businessman John Grogan.
As part of the proceedings, Mr Grogan (57), of Seafield, Donabate, Co Dublin, who also had interests in the restaurant trade, was restricted from acting as a company director for five years.
His son, Elliot Grogan (27), who was also a director of the company, was also hit with the same restriction.
The Revenue moved to liquidate Mr Grogan's company over unpaid taxes of €119,000 in 2010, but the case dragged out for three years and was only recently finalised.
In High Court filings, liquidator PJ Lynch said unexplained cash transfers of over €292,000 from the company's bank account were discovered.
The money had been transferred to a law firm in France in four tranches in October 2007.
But when quizzed about the cash transfers, Mr Grogan did not disclose details of the property, Mr Lynch claimed.
It later transpired the money was used to buy land with a derelict 5,000 sq ft barn in the medieval city of Narbonne in the south of France, which Mr Grogan had hoped to develop into a villa with a swimming pool.
Mr Lynch had to hire a team of lawyers in Paris to follow the money trail and this led to the discovery of the property.
According to Mr Lynch's affidavit, when pursued about this, Mr Grogan admitted buying the land, but denied company money had been used in the purchase.
The land deal had been funded from his own resources and from loans advanced by friends, Mr Grogan said.
He added that it had "seemed like a good idea" at the time.
Mr Grogan also claimed he had only used the company bank account because he did not have a personal account that allowed foreign cash transfers.
However, the liquidator was "not satisfied" with this explanation and was of the opinion the money used had belonged to the company and therefore could be pursued as part of the liquidation.
Court records from the liquidation, which was finalised last month, show that the land was subsequently sold for €148,500.
The court ordered that €96,500 of the proceeds go to the liquidator, with the remaining €52,000 going to Mr Grogan's solicitors.
A further €19,000, money withdrawn from the company's account after the liquidation started to pay salaries and accountancy fees, was also recovered by the liquidator.
When contacted by the Irish Independent, Mr Grogan insisted it had been his property and that it was a mistake to move the money through his company.
"I didn't have another account that would allow us to transfer money abroad. They (Revenue) didn't believe it. It sounded a bit far-fetched, but it is true," he said.
Mr Grogan, who was battling cancer during the liquidation, described the process as "unreal" and said: "I really don't think you have a chance against the Revenue.
"I made wrong decisions and I was penalised for it. I was in business for 30-odd years and didn't owe a penny and then to be treated like a dog in the courts.
"I mean you are treated like a criminal. There is no doubt in the world. And I suppose rightly so. If I made mistakes, I should be penalised.
"I just felt they were very hard on me. But that is what they have to do, I suppose."
Independent.ie Comments Facility
INM has taken the decision to remove the commenting facility on its online platform Independent.ie to minimise the legal risk to our business that arises from Ireland's draconian libel awards system.
We continue to look forward to receiving comments through direct email contact or via social media, some of which may still be featured on the website Independent.ie