THE COMMERCIAL division of the High Court has heard a claim that fraudulent invoices from a construction company working on a site on the Malahide Road in Dublin had resulted in cheques totalling €300,000 being issued.
The fraud, allegedly by former staff of Construction Site Services (CSS), was said to have occurred on a development begun by the Cunningham Group when the group had had a receiver appointed to it by First Active.
The allegations were made by Hugo Page QC, on behalf of millionaire developer Brian Cunningham, of the Cunningham Group, in a case he has taken against First Active.
Yesterday, Mr Page continued to outline the case being taken by Mr Cunningham, who is also suing the Cunningham group's receiver Ray Jackson (of KPMG) and developer Bernard Duffy.
The alleged fraud was part of a series of events outlined by Mr Page. They included claims that programme completion dates were frequently pushed back and that there were differing valuations of schemes the Cunningham Group had been developing.
In relation to the residential and commercial scheme on the Malahide Road, Mr Page said it was their case that CSS should have been sacked. Instead the receiver accelerated works and paid for evening and weekend work.
Mr Page said Mr Cunningham had specifically warned the receiver about CSS. In December 2003, it was claimed that CSS was €2 million over budget.
Four years ago, First Active appointed a receiver over the Cunningham Group after it grew concerned Mr Cunningham was over-extended and had too many projects, placing the bank's facilities at risk. Relations between Mr Cunningham and the bank, which expressed concerns about the scale of the projects and the builder's "poor" administrative skills, deteriorated in late 2000 when Mr Cunningham sought IR£1 million for a site.
The option actually cost £1 million sterling, and this forced the builder to seek additional funds from the bank. That resulted in the bank compelling Mr Cunningham to sign a negative pledge.
The case continues today. It is expected that when Mr Page completes his opening, First Active will seek to have the case dismissed.
First Active, Mr Jackson and Mr Duffy are all contesting the action.
