Liquidator wants 'driving force' of Tuskar Asset Management disqualified
THE liquidator of a property investment company wants the High Court to disqualify from directorships the "driving force" behind the firm before it went bust in 2009.
Accountant Alan Hynes "largely determined" the strategy of Tuskar Asset Management (TAM) plc group - but after it was wound up he failed to adequately explain where €3.1m of shareholders funds went, liquidator Neil Hughes says.
TAM was the holding company for a number of companies involved in the buying and developing land for investment with the aim of achieving capital growth for its investors.
Around €17m in total was invested in TAM before the property collapse, in sums of between €100,000 and €1m, much of it the pension funds and savings of professionals like doctors and solicitors, Gary McCarthy SC, for the liquidator, told the court yesterday.
There was ample evidence that Mr Hynes was not a fit person to be involved in the management of a company and to show he was also guilty of fraud, counsel said.
The assets of people who had invested their life savings had been "wiped out by the actions of Mr Hynes", he said. The public must be
protected from him having regard to his past deeds and conduct, counsel said.
Mr Hynes, Westwinds, Crosstown, Co Wexford, is opposing the liquidator's application and says he did not benefit from the collapse of the company. He also denied claims that he was involved in fictitious accounting.
His barrister Alan Cormack said a €3m judgment had been obtained by AIB against Mr Hynes and his wife Noreen and they had received no value from the liquidation. Mr Hynes was now pursuing his former solicitors over this, counsel said.
TAM grew from investment projects and co-ownerships undertaken by clients of Mr Hynes's firm, Hynes and Co Financial Consultants Ltd of Wexford, which itself was liquidated in March 2009, the liquidator Mr Hughes said in an affidavit.
Mr Hynes's certificate to practice as a chartered accountant was subsequently withdrawn by his professional body's regulatory board, Mr Hughes said.
Substantial amounts of funds were moved in and out of TAM at the direction of Mr Hynes who in July 2007 had been appointed the designated signatory on the group accounts of the company, Mr Hughes said.
At least €3.1m of shareholders loans advanced for investment in TAM were lodged directly to Mr Hynes own current account or to someone related to him - rather than to the company accounts - Mr Hughes said.
This was "a matter of the utmost gravity", Mr Hughes said.
In 2008, after another director, John Power, and two shareholders/creditors, applied to put the TAM group into examinership, only one of its companies involved in commercial property, survived. Five other companies in the group, including the TAM plc holding company itself, were wound up.
In Mr Hughes' investigation into the affairs of the company, he said he was "particularly struck" at the losses suffered by investors, many of whom will receive no dividend from the liquidation.
The company had taken their (investors) power of attorney to enter into guarantees for company debts to Bank of Scotland Ireland based on misrepresentation to them, Mr Hughes said.
The liquidator did not think the investors realised the full significance of what they were being asked to sign in those power of attorney documents and as a result they have been left still having to guarantee significant debts as a result of "this most unusual practice,"
Mr Hughes said his investigation made clear there was poor accounting and corporate governance and that TAM's investment policies were irresponsible whereby it entered into capital commitments without adequate funding and in the light of the property collapse. The firm was "hopelessly insolvent" from at least December 2006 but despite this Mr Hynes and others continue to seek to expand its portfolio, Mr Hughes said.
The hearing continues before Ms Justice Elizabeth Dunne.