Fahey denies investing in collapsed business

Minister of State Frank Fahey has denied being an investor in a controversial Moscow-based business that collapsed in the mid-1990s.

It is the third time that the minister has distanced himself from investments apparently connected to him, which do not appear in the official register of interest of members of the Oireachtas.

The latest issue centres around a document - seen by The Irish Times - naming Ethelle Fahey and three others as the owners of a hair and beauty salon established in Moscow in 1994.

Mr Fahey's wife's name is Ethelle. Politicians are obliged to declare interests held by their spouses and other "connected persons", where the interest exceeds €13,000 in value.

The salon was one of a number of businesses in Moscow owned by Irish investors and set up using a Limerick-based company called Irlasto plc in the early 1990s. Irlasto collapsed in 1996 and the businesses were taken over by a former Russian partner.

A source has said Mr Fahey was linked to the salon along with Michael O'Connor, the hairdresser behind the Bellissimo chain of hair salons in Galway and Limerick. Mr O'Connor is also named on the document seen by The Irish Times. He did not respond to calls yesterday.

Another source said that it was his belief at the time that Mr Fahey had an involvement with the salon.

No such investment was declared by Mr Fahey, then a senator, in the 1995 and 1996 registers of members' interests. Asked about the salon, Mr Fahey said: "I had no involvement in it. I have no comment to make in relation to Irlasto. Thank you very much." Mr Fahey, who is Minister of State at the Department of Justice, Equality and Law Reform, would not comment further. A spokeswoman said: "The Minister fully complied with the registration of his interests to the Standards in Public Office Commission for 1995 and 1996."

The Moscow hair salon, Tressals, was established using a structure put in place by a number of Cork and Limerick businessmen, to facilitate investments in Russia.

The document seen by The Irish Times names Ms Fahey, Mr O'Connor, and two others. One of the others named has said he was not involved and the other has not yet been identified.

In April Mr Fahey denied that he had failed to make a full disclosure in the current register of TDs' interests. He denied a report that he had failed to declare a property at Perthshire Road, Boston, Massachusetts, saying he had no interest in the property concerned. He denied that the property was registered to Fahey Higgins LLC, a Boston-based property company in which he is a shareholder.

According to the Dáil register of members' interests, Mr Fahey, a former teacher, has assembled a multimillion-euro property empire in recent years. Some of the properties are in his name or that of his wife, while others are held in partnership with relatives or business associates.

Mr Fahey's declaration of interests for 2005 includes interests in 20 property projects in Ireland and seven more abroad. Many of the properties were purchased in the US, Europe and Ireland with his wife and a company called Sage Developments.

He was involved in a controversy over his property interests abroad in 2000 when it emerged that his name was on the title deeds of a property in Daytona Beach, Florida, that was not disclosed on the register of TDs' interests. Mr Fahey said he had no beneficial interest in the property but had had to put his name on the title deeds when he went guarantor for a friend, John Cahill.