The former chief accountant to Dunnes Stores, Mr Michael Irwin, instructed that work on the homes of Mr Ben Dunne and Mr Michael Lowry be incorrectly recorded as work on Dunnes' premises, Naas District Court heard yesterday.
The court heard that the late Mr Peter Stevens, of Peter Stevens & Associates, architects, told Mr George Maloney, authorised officer to Faxhill Homes Ltd, that he received such instructions from Mr Irwin.
Mr Maloney was giving evidence on the fourth day of a criminal case taken by the Minister for Enterprise, Trade & Employment, Ms Harney, against Faxhill Homes and its directors Mr John Tierney and Ms Jennifer Tierney.
The case involves more than 25 offences under company law concerning keeping inadequate books of account and issuing false information to third parties. The accused have pleaded guilty to three further offences under the companies acts.
Mr Maloney told Mr David Conlan Smyth, for Ms Harney, that when he asked Mr Tierney why invoices incorrectly described the location where work had been carried out, Mr Tierney indicated he had followed the instructions of Mr Stevens.
Mr Stevens had told him that he was acting on the instructions of Dunnes Stores, and specified Mr Irwin, Mr Maloney said.
He said he did not believe it was appropriate for Faxhill to follow Mr Stevens's instructions. "The books and records of the company are the company's responsibility."
Work on Mr Lowry's house was incorrectly ascribed to work on Dunnes Ilac Centre and work on Mr Dunne's house to a food plant in Newbridge, Industrial Estate. The court heard that Faxhill Homes conducted work for Dunnes Stores costing £2.5 million on the Newbridge plant and £2.7 million on the Ilac outlet.
Mr Maloney said he was told by Mr Ross Carr, accountant to Faxhill Homes, that it was not normal practice for the company to have formal contracts for work it was doing for Dunnes Stores. He found this "unusual" given the size of the transactions. The court heard the company conducted other work on locations linked to Dunnes Stores or persons associated with the company. Details were not given.
Responding to Mr Colm P Condon, for the accused, he agreed that, despite not keeping records concerning stock or the value of work in progress, the company's accounts showed it was trading at a profit.
It emerged in evidence that some of the company's documents had been given to the investigations branch of the Revenue Commissioners in December 1996.
Mr Maloney said Mr Eugene Beglan, of Eugene Beglan & Associates was acting as quantity surveyor for Dunnes Stores. Responding to Mr Condon, he said he was never told that the rates which Faxhill Homes were to be paid were supplied by Dunnes Stores. Faxhill had started to work for Dunnes Stores in 1992.
He found invoices for work totalling £11.4 million for a period during which the books showed a turnover for Faxhill of £17.5 million. Mr Maloney did not specify the period concerned.
He said he was satisfied there was no diversion of funds involved in the transactions involving Mr Dunne's and Mr Lowry's homes.
Expenditure on business premises was tax deductible but not expenditure on private residences. The matter of how Dunnes Stores dealt with the invoices received from Faxhill in relation to its, Dunnes, tax liabilities was a matter for the group, he said. The hearing continues.
