Dunnes chief 'insisted' on £200,000

The managing director of Dunnes Stores successfully "insisted" on a £200,000 (€254,000) cash payment for an unspecified reason from Whelan Frozen Foods in 1992, the High Court was told earlier this year.

The money was paid and Whelans, which has a multimillion turnover business with Dunnes Stores, was never told what the money was for, the court was told.

Whelans supplies warehousing and distribution services to Dunnes. Dunnes has been Whelans only customer since it was incorporated 25 years ago.

The £200,000 was never returned, Whelans director Patrick Whelan told the High Court in an affidavit.

The claim was not responded to by Dunnes Stores, the defendant in the hearing. A spokeswoman for Dunnes Stores said there would be no comment.

"To this date I do not know the purpose of this cash payment," Mr Whelan said in his affidavit.

In 1992 Ben Dunne and Frank Dunne were joint managing directors of the Dunnes group. Ben Dunne was also chairman and the main force behind the day-to-day running of the group. He could not be contacted yesterday.

The claim by Mr Whelan was made as part of a successful application for an interlocutory injunction by Whelans earlier this year. In his judgment Mr Justice John MacMenamin said a number of issues canvassed by Mr Whelan, including some going back as far as 1992, did not form part of the issues to be considered.

Mr Whelan could not be contacted yesterday.

Mr Justice MacMenamin ordered that margins being paid by Dunnes which had been lowered, be returned to the higher rate. Whelans, which had said it could not survive on the lower margins, has now been given notice by Dunnes.

Whelans is contesting the amount of notice given in relation to some aspects of its business with Dunnes. This matter will be heard in a full hearing expected to take up to two weeks this July.

Whelans is to be represented by Paul Gallagher SC and Frank Ward & Co solicitors. Dunnes is to be represented by Dermot Gleeson SC, Michael Cush SC, and solicitors Matheson Ormsby Prentice.

The injunction hearing earlier this year heard that Dunnes was unhappy with the level of profits being made by Whelans.

Whelans said Dunnes had "sensationalised" its profits. Whelans made pre-tax profits of €1.5 million on turnover of €189 million in the year to end-January 2005.