Golfing buddies suffer €18m loss
Published 01/08/2010 | 05:00
Billionaire Irish businessman Dermot Desmond and his golfing buddy Padraig Harrington have lost more than €18m in a technology firm, documents filed in Britain last week have revealed.
Mr Desmond, whose wealth is estimated at €1.4bn, is regarded as one of the shrewdest investors in the business and has so far survived the wholesale destruction of wealth brought about by the banking collapse.
The businessman and the golfer, who is playing in the Irish Open in Killarney, Co Kerry, this weekend, took the huge hit in a technology firm called Carthow Limited (formerly U4EA Technologies) in which his brother Columb Harrington was a director. The company collapsed with debts of nearly £40m (€48m).
Gibraltar-based businessman Mr Desmond lost £11,918,811 (€14,290,400) in the venture through his private investment firm IIU.
Harrington, who is having a mixed sporting year, lost £3,361,716 (€4,030,630).
The technology company is now in administration and, according to figures filed in Bristol last week by chartered accountants Milsted Langdon, there is only £250 (€300) left after £5m (€6m) was paid to 'secured' creditors such as banks and financial institutions.
In November last year, when rumours first surfaced about the golfer losing a lot of money, he answered his critics by saying, "birdies are recession proof".
He also said that "nasty things" were being said about him, including reports that he had lost money on investments with jailed American banker Bernie Madoff.
But the scale of losses by Ireland's best-loved golfer, who is also an accountant, and Mr Desmond's private equity company IIU are revealed in the administrators' progress report into Carthow Limited -- filed recently in the High Court of Justice (Bristol District).
'Secured' creditors, which include banks and other financial institutions, originally submitted claims of £21.3m (€25.5m) -- but when the administrators sought legal advice they discovered that the firm had only given security for £5m (€6m).
This has since been paid and according to documents a mere £250 (€300) is left in the accounts.
According to the documents, the administrators have since received claims of £6.7m (€8m) from U4ea Limited, £3.3m (€4m) from Harrington and £11.9m (€14.3m) from IIU Nominees, Mr Desmond's Dublin-based investment company.
"We have reviewed these claims against the supporting documentation and bank statements of the company and can confirm that we are satisfied as to their accuracy and validity," says the administrators' report. "Therefore they have been admitted for dividend purposes."
However, the Statement of Affairs shows that after paying banks and the cost of administration there is nothing left for unsecured creditors.
Back in Killarney, Harrington, who has been struggling with his form of late, is doing well at the Irish Open. It is estimated he has earned about €1.5m in prize money this year, the bulk of it in America where he is a member of the professional tour.
Harrington also has lucrative sponsorship deals so while these losses would put a dent in his finances he remains one of the country's richest sportsmen.