Thursday 25 May 2017

Developer's son was the only one to voice any fears about 'overheated' land market

Siobhan Creaton

AFTER a week spent in Court Nine, businessman Philip Lynch must rue the day that he got his family involved in the business of property development.

As he sat beside his wife Eileen, daughters Philippa and Therese and son Paul listening to his other daughter, Judith Whelan, being grilled in the witness box about their failed property investment, he must have wondered how it all went so badly wrong.

Mr Lynch has been one of Ireland's leading business figures ever since he was appointed chief executive of the food and agribusiness IAWS, now called Aryzta, in 1983.

During his 20 years there, he transformed this small animal-feed and fertiliser business into one of Ireland's leading consumer-food companies and amassed great wealth.

In 2007, he expected an income of €1.5m and was said to have assets worth more than €48m. In recent years, he moved on from IAWS.

He set up the One51 investment company in 2003, although its performance has been less successful than his previous venture.

One51 has taken big financial hits on its investments in the ferry operator, Irish Continental, where it lost €23m. It also took a €100m loss on its investment in the environmental services company NTR.

Now it seems, that like the losses suffered by his business, his family investments have also come unstuck and he is staging the fight of his life to protect his family from financial ruin.

After they married, Philip and Eileen lived in Waterford before moving to their prestigious home at the Curragh in Kildare.

When she took the stand this week, their daughter Judith talked about how her parents had always been very generous toward them.

The four children have forged their own careers and weren't surprised when their father suggested they should make a family investment.

Investments

"Dad took the view that he would like to provide for us while we were still young enough to enjoy it," she explained to the court.

When Judith finished college, her father helped her to buy a property and he did the same for Philippa.

Paul and Theresa were living abroad, so they couldn't buy property by using a similar inheritance tax deal, she said.

Philip often mentioned investments he was considering to Judith, who had worked as project manager for the mobile-phone company Meteor, before taking on the full-time role of managing and looking at potential investments for the family.

She was employed by her mother in February 2006 as a "business consultant", she said, and managing the family's €25m property deal was to be her first big task.

A family meeting was called. Her father asked his long-term friend and business associate Pascal Taggart to act as an independent chairman of the family's investment venture -- or "to keep the peace", according to Judith -- and he chaired the meeting. They all knew him well and Paul, who was a stockbroker, had a particularly close relationship to him.

Their father explained that the land was close to the swimming pool in Kilbarry. They had a chance to join with property developer Jerry Conlan, who lived close by, to invest in this site and potentially make a fortune in a few years.

They knew they would be relying on another of her father's close friends, solicitor Larry Shields of LK Shields, to handle the legalities.

Paul, who had recently returned to Ireland from the US, was the only one who was worried about investing in property at that time. Judith said he was reluctant because he felt the market was overheated.

They listened to his view and their parents made it "patently clear" that their only reluctance was that they could "expose them to something".

In other words, they never wanted to burden their children with debts if the deal didn't work out. But there was no feeling that that would happen.

"This land was considered to be no risk and had only an upside to it," Judith told the court.

Irish Independent

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