Jordanian businessman Mr Zakariah El Taher had "come clean" about his part in the collapse of the Master Meat Packers Group of companies for reasons of religious conviction, it was claimed at the High Court yesterday.

Mr James Salafia SC, for Mr Pascal Phelan (50), who is suing Mr Larry Goodman for £30 million (#38 million) damages and interest, said Mr Taher was an elderly man who had repented for religious reasons.

Mr Phelan claims Mr Taher, who had been his co-director in Master Meat Packers, "sold out" to Mr Goodman without Mr Phelan's knowledge. Mr Salafia said Mr Taher could be considered a "spy in the camp". Mr Phelan thought he had an Arab gentleman from Jordan as a co-director, What he really had was Mr Goodman dressed in Arab attire. "It was Goodman the Arab who was present in the most confidential recesses of the companies," counsel argued.

Mr Salafia was continuing the opening of an action expected to go on for more than 12 months. In other actions, Mr Phelan is suing Mr Taher while there are various counteractions by Mr Goodman.

Mr Phelan, who is a former managing director of Master Meat Packers, claims Mr Goodman conspired to force him out of the beef processing industry by secretly controlling a 50 per cent stake in the group, which had several meat plants around the State. Mr Phelan had worked for the Goodman group for a time before leaving in August 1983 to set up his own meat processing organisation.

Yesterday, Mr Salafia said there was, from 1985, a joint venture between Mr Phelan and Mr Zakariah Taher confined to a Clonmel plant. The rationale was that the Tahers would open up the Middle East market. In retrospect, Mr Phelan made a serious error of judgment in relation to the Tahers and, in particular, in relation to their trustworthiness, counsel said. He said Mr Nasser Taher, son of Mr Zakariah Taher, spent a lot of time in Ireland and saw possibilities. He began to press Mr Phelan to get involved in a 50/50 venture. Mr Phelan saw the opportunities and agreed to enter into a series of agreements in October 1986. Mr Salafia said Mr Phelan would tell the court that every penny he had was invested in the business and the idea of receiving large sums of money from the Tahers for a share in the business was attractive to him.

Mr Phelan was a young man who started his working life at £10 a week. Mr Phelan did a deal with the Tahers in October 1986 but did not consult the group's bank or its accountants to get formal professional advice as to the value of his business. He accepted £2.5 to £3 million and, so far as the Tahers were concerned, they were doing well.

The written agreements between Mr Phelan and Mr Taher were the bedrock on which Mr Phelan's case rested, Mr Salafia said. He contended those agreements were broken by Mr Taher who secretly sold out to Mr Goodman. An express provision of the agreements forbade disposal of the 50 per cent shareholding other than to the co-partner.

From April 1987 until September 1988, when Mr Phelan was "ousted", Mr Taher, Mr Goodman and people fronting for Mr Goodman, people of high reputation, were acting to bring down Master Meat Packers as competitors and get Mr Phelan out of business, counsel argued.

Mr Salafia said there was collusion between Mr Taher and Mr Goodman and, more importantly, concealment from Mr Phelan. Mr Taher, at the behest of Mr Goodman, had misled Mr Phelan into believing Mr Taher was still his partner through that period. The "engineering" of difficulties led to a paralysis of company affairs and to total deadlock, he said.

Counsel said there was an "unquestionably low and cruel" level of conduct towards Mr Phelan. Mr Goodman was a major competitor and, among his own advisers, he was described in coded language as "Mr Big", Mr Salafia said. Mr Taher had held his shares in name of a Liechtenstein entity and sold his interest to another Liechtenstein entity, Taros Anstalt, alias Mr Goodman, Mr Salafia added.

Mr Goodman had claimed he did not breach the restriction in the agreement on the transfer of shares and that was the nub of his defence, counsel continued. This was an issue the court might usefully decide before embarking further.

If the sale by Mr Taher to Mr Goodman/Taros Anstalt was wrong, then the sale was illegal and in breach of the agreement. It was not accidental. It was designed to get round what the parties knew to be a restriction on the sale of the Taher shares.

Mr Taher had been paid $9.750 million and got a good return on his investment. Mr Goodman paid that amount for 80 per cent of the shareholding and he or his company Taros Anstalt were given an option to purchase the remaining 20 per cent at a nominal consideration of $100. The reason for confining it to 80 per cent was to beat the restriction in the agreement because it left 20 per cent still in the ownership of Mr Taher's company. However, through his option to purchase the other 20 per cent, Mr Goodman was ensuring control, Mr Salafia said.

The whole basis of the agreements was secrecy and, once hooked by Mr Goodman, Mr Zakariah Taher became the fly in Mr Goodman's web, counsel said. It was apparent from the defence to Mr Phelan's claim that Mr Zakariah Taher had become uncomfortable with what he was asked to do and with Mr Goodman pushing too hard.

Mr Phelan knew nothing because the transactions were moved outside the country, Mr Salafia said. There was nothing to alert him and he proceeded to conduct his business affairs in the belief his partner was Mr Zakariah Taher. The transfer remained concealed and unknown to him. He was not aware he was not bound by the agreement.

The hearing, before Mr Justice Murphy, continues today.