DEVELOPERS Michael and Thomas Bailey have been disqualified from acting as company directors for seven years after being found guilty of "particularly serious" misconduct and fraud.
The fraud in the conduct of the affairs of their company, Bovale Developments, included understating their gross remuneration over a two-year period by some €6m.
The disqualification orders have been postponed to January 20 to bring an application so the brothers may continue to co-operate with NAMA concerning Bovale.
The brothers had not disputed the evidence presented by the Director of Corporate Enforcement, and that was enough to satisfy the High Court that they were guilty of a fraud in relation to Bovale and the Revenue over two years to June 1998.
While they did not oppose the disqualification orders, they argued mitigating factors should reduce the disqualification period.
They also acknowledged and apologised for the misconduct, said they had "learned from their mistakes" and intended to set matters right.
The Office of the Director of Corporate Enforcement (ODCE) initiated the disqualification proceedings in 2006.
But they were delayed after the Baileys challenged the admissibility of material the ODCE wanted to rely upon, including a PwC report.
The Supreme Court later ruled the ODCE could use the PwC report -- but could not use reports of the planning tribunal, or evidence of alleged wrongdoing from 1988 to 2000.
The PwC report was confined to analysis of the affairs of Bovale for the two years to the end of June 1998, but the director had alleged wrongdoing over a longer period, from 1988 to 2000.
That claim was based on much of the material excluded by the court, including a statement by the planning tribunal that Michael Bailey provided a benefit or payment to former minister Ray Burke.
It was also claimed he gave former assistant city and county manager for Dublin George Redmond three cash payments amounting to between IR£16,000 and IR£20,000 in the 18 months prior to July 1989.
In her judgment yesterday, focusing on the period to June 1998, Ms Justice Mary Finlay Geoghegan said it was "particularly serious" misconduct.
It left them unfit to be directors of a company and would justify a period of 14 years' disqualification were it not for certain mitigating factors.
A managing partner with accountancy firm PricewaterhouseCoopers had given evidence that during his 35-year career in public accounting in Ireland, he had never encountered such a failure to maintain proper books and records. However, the mitigating factors included the fraud and misconduct at issue having occu- rred more than 15 years ago.
The brothers had in 2000 made what they described as "voluntary disclosure" to the Revenue, leading to their having paid tax, interest and penalties in "significant amounts" -- some €22m.
In relation to corporate governance, the brothers had sworn they had, since 2001, ensured that Bovale kept proper books and records.
The judge said there was some objective support for those sworn statements arising from a "forensic review" of Bovale's accounts conducted by PwC and from their co-operation with NAMA.
Bovale has been in NAMA since 2010.