Sunday 19 November 2017

Custom House director is now selling pensions

Irish investors lost millions after collapse of CHC

Louise McBride and Nick Webb

John Mulholland, a former non-executive director of the failed investment firm Custom House Capital (CHC), sells pensions and life assurance in a firm which is authorised by the Central Bank.

CHC collapsed about a year ago after High Court Inspectors uncovered the "systemic and deliberate misuse" of more than €56m of assets and cash belonging to clients of the firm. Around the time of its collapse, a High Court judge described CHC as "a sort of Irish Ponzi scheme".

Mulholland is managing director of Mulholland Life & Pensions. The company's website describes the firm as a "family-run business providing expert financial advice" to businesses and individuals.

The Central Bank authorises Mulholland Life & Pensions "to provide investment advice" on insurance policies, tracker bonds, collective investments and PRSAs, according to the Central Bank register.

Mulholland was a director of CHC for about 10 years before the firm collapsed in October 2011. The High Court report on CHC, published in October 2011, found that "CHC's board of directors and its senior management failed in their duties to clients and allowed the company to operate with inadequate internal controls over a significant period of time".

Mulholland has been a director of Mulholland Life & Pensions since 2006. There is no mention of Mulholland's previous involvement with CHC in his profile on the company website.

When contacted by the Sunday Independent, Mulholland said: "Mulholland Life & Pensions is a small pensions and life assurance consultancy of which I am managing director. Mulholland Life & Pensions has traded in Dublin since the Seventies and many long-standing clients still seek my advice. The company is regulated by the Central Bank and is fully compliant with its Regulators and the Revenue Commissioners."

Mulholland pointed out that he was a non-executive director of CHC. He also drew the Sunday Independent's attention to a part of the High Court Inspectors' report into CHC where Harry Cassidy, a director of CHC, was questioned under oath. In his responses, Cassidy described Mulholland "as a director, but without executive responsibilities who runs a separate company" and who was not "aware of the extent" to which funds had been inappropriately transferred by CHC. Cassidy also said that he had "never discussed" the inappropriate transfer of funds with Mulholland.

The High Court Inspectors' report into CHC found that the firm had used clients' money to hide property losses. This misuse of client funds "was deliberately disguised by CHC through the use of false accounting entries" and the issuing of "false and misleading statements to clients", according to the report.

Some client money was invested in overseas properties without the knowledge or approval of clients.

When contacted about its regulation of Mulholland Life & Pensions, a spokeswoman for the Central Bank said it "could not comment on individual cases". She added that all firms regulated by the bank must meet its fitness and probity rules.

Sunday Indo Business

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