The High Court has made orders disqualifying two men from acting as company directors after hearing they allowed “bogus” purchase invoices to be used to fraudulently reclaim €156,000 VAT from the Revenue Commissioners.
John Joe Dunne (80) and Christopher Dunne (70s) were directors of Cranfield Plant Limited, which went into liquidation in 2017 with deficiency of liabilities over assets estimated at €476,000, the court heard.
The company, with a registered office at Delahasey Farm in Naul, Co Dublin, had been incorporated in 2012 and sold rented and serviced industrial and farming plant machinery.
Liquidator Thomas Musiol, of Musiol Advisory, secured orders this week disqualifying the pair from acting as directors or secretaries of companies for a period. Retired farmer John Joe Dunne’s disqualification lasts for nine years, while Christopher Dunne’s is in place for seven.
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Mr Justice Michael Quinn said the liquidator’s evidence was not contested. He found “some force” to the submission by John Joe Dunne that Christopher Dunne was simply a nominee director. The disqualification order against him records it is based on more limited findings.
John Joe Dunne did not object to the making of a disqualification order.
Paul Comiskey O’Keeffe, for Chrisptopher Dunne, told the court his client had no function in the control and management of the firm. His client is in his 70s and continues to actively farm. He has paid €60,000 towards the liquidation “as an act of contrition”, said counsel.
Sally O’Neill, representing the liquidator, told the court the Dunnes did not prepare books and records in 2015 or 2016, causing substantial uncertainty about the company’s assets and liabilities.
John Joe Dunne told the liquidator’s team that the records were destroyed in a fire, but there was no evidence to support this claim, said Ms O’Neill, instructed by McErlean Weir solicitors.
Her client had to forensically reconstruct the company’s trading history by using bank account records and consulting with purported creditors.
In an affidavit to the court, Mr Musiol said his investigations have led him to conclude Cranfield Plant “fabricated” invoices from three firms to “deliberately and fraudulently” reduce its VAT liability or in some cases place itself in position for a VAT refund. He alleges the Dunnes caused the company to fraudulently claim some €156,000 VAT input credits from Revenue.
From receipts, he concluded the company under-returned VAT of nearly €50,000 and that it understated its VAT liability by €170,000. He believes the company deliberately understated its PAYE liability by €103,000, bringing its total tax deficit to €437,730.
He said Cranfield continued trading for 49 months after it became insolvent.
The Dunnes’ conduct includes misfeasance, breach of directors’ duties and reckless and fraudulent trading, the liquidator said.
This story was updated on October 29th, 2024 to reflect that Christopher Dunne did object to the making of a disqualification order
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