CRC ploughed €550k of charity money into loss-making company
Former board member says clinic will suffer hefty losses from deal
THE Public Accounts Committee (PAC) is still awaiting a report on how the Central Remedial Clinic (CRC) intends to recoup a €550,000 loan funded by charitable donations that it ploughed into a loss-making company.
The CRC set up the wheelchair distribution company, CRC Medical Devices, during the boom but sold the goodwill and a portion of its stock last month after it racked up massive losses.
The former chairman of the CRC, James Nugent, was unable to disclose the details of the sale last week.
He told the PAC that the clinic took €550,000 from its charitable fundraising arm, the Friends and Supporters of the CRC, and loaned it to the private company.
CRC Medical Devices accumulated losses of more than €500,000 and the assets were sold in recent months to a rival, MMS Medical, but it is understood that a loan of €550,000 from the CRC remains unpaid.
Mr Nugent insisted that the Central Remedial Clinic "will not be out of pocket". He said the CRC would probably end up losing €50,000 to €60,000 of the €550,000 loan.
"I know the overall plan is to get in the region of €500,000 back over a couple of years," he said.
However, another former board member, Vincent Brady, who resigned in advance of last week's HSE ultimatum to the chairman, said the CRC will make "substantial losses" from the deal.
Mr Brady told the Sunday Independent that the CRC sold the wheelchair stock and the goodwill to Munster Medical Supplies and a deal was negotiated that the €550,000 should be repaid over four or five years.
"As far as I can recall from the last meeting, the agreement for a sale to MMS was for stock to be transferred completely, and some staff. I think only about four or five staff were transferred over and one was to come back into the CRC," he said.
"Payment for the sale of the business was to be over three to four years. Even at that . . . the CRC would still stand to lose a considerable amount of their investment."
Mr Brady said he raised concerns at board level about the CRC's involvement in the loss-making private enterprise.
"I suspect there will be a very substantial loss to the CRC."
Paul Kiely, the former chief executive who retired on a €200,000 lump sum also funded by Friends and Supporters of the CRC, told the PAC that the specialised seating company was intended to create an income stream for the charity but the market turned against it.
He said the buyer had bought the goodwill and the stock. Mr Kiely was also unable to say exactly how the €550,000 loan was to be repaid.