The liquidator of Irish artificial intelligence company Altada, which collapsed in late 2022 owing some €21 million to investors and creditors, is considering asking the High Court whether a file should be prepared for the Director of Public Prosecutions (DPP).
In an update to creditors of the Cork-based company on Thursday, John Healy of Kirby Healy Chartered Accountants in Dublin said his investigations into the affairs of the firm and the conduct of the directors in the period leading up to his appointment by the High Court in early 2023 had “identified several matters of concern”.
Among Mr Healy’s concerns, which were circulated to creditors in a report seen by The Irish Times following a meeting on Thursday, include the issuing of “an invoice with instructions to a customer to make payment of the company invoice to the personal bank account of one of the directors”.
Mr Healy’s concerns, which he said are “all contested by the directors” and which he understands they intend to “fully dispute”, include the “potential inappropriate use of company funds” to charter private jets, pay for first-class flights and five-star accommodation and “large transfers to connected companies controlled by the directors”.
The liquidator has yet to compile his final report on the investigation. He also told creditors that a separate garda investigation led by detectives attached to the State’s white-collar crime agency, the Corporate Enforcement Authority (CEA), into Altada is understood to be ongoing.
Whether the directors face sanction or not is a decision for the CEA once the liquidator’s final report is furnished, he said in the update on Thursday. However, he said the High Court is entitled to direct a liquidator to “refer matters to the DPP and the CEA if it appears to the court” that a director “has been guilty of an offence in relation to the company”.
In his report, Mr Healy, who declined to comment on the report to The Irish Times, said: “I am considering whether in due course it may be appropriate for me to seek such a direction from the High Court in this liquidation”.
Mr Healy said he had received no substantive communication from the directors, including co-founders and former co-chief executives Allan Beechinor and his wife Niamh Parker, until December 2023, 12 months after his appointment. He then wrote to the directors late last month, giving them “further opportunity to respond to the findings” before he submits his final report to the CEA.
In what he described in his update to creditors as “a welcome development”, Mr Healy received a letter on Wednesday evening, indicating that the directors “contest the correctness of the concerns” outlined in his report.
However, the liquidator said the response “does not alleviate” those concerns.
Mr Beechinor has been approached for comment.
Mr Healy was appointed as liquidator to the company in late 2022 on foot of an application to the High Court by US investor Jeffrey Leo, a creditor and early investor in the company.
Creditors were told on Thursday that Altada had racked up losses totalling more than €10 million at the time the winding-up petition was issued in court. When that figure is added to the €11.5 million the company raised in a funding round in September 2021, putting it on track to achieve a $1 billion valuation, the total deficit to shareholders and creditors is €21 million.
