APPLICATIONS received for the £7.5 million corporate bond issued by Galtee Deer Care Ltd following a marketing campaign involving advertisements and brochures will not be processed following a dispute with Allied Irish Banks and the Central Bank.

The company says it will now pursue its corporate funding on the basis of a private placing with individual investors. To date, the company has only received applications and has not received any funds from, potential investors.

Galtee Deer Care, based in Mitchelstown, Co Cork is attempting to raise £7.5 million to expand its herd and services. The company's marketing campaign, which began with an advertisement in The Irish Times on March 1st, offered a 10 per cent annual income for five years plus a full return of capital with minimum investments of £10,000.

Last Saturday AIB Bank, which acts as banker for the company, took the unusual step of placing an advertisement in The Irish Times regarding the "Guaranteed Income Bond" offered by Galtee Deer Care Ltd and its sister company, Irish International Deer Ltd. which was set up to raise the £7.5 million directly from the public.

References were made in the Galtee Deer Care brochure to a monitoring role for AIB in the repayment of interest and capital payments to investors: "The whole process is monitored by Allied Irish Banks to oversee that all payments are made when due and to give you additional peace of mind," the brochure said.

But in its advertisement of March 9th, AIB said: "Please take note that investors in the above are not monitored or guaranteed by Allied Irish Banks plc and that the reference to Allied Irish Banks in the promotional literature was inserted without the bank's consent."

AIB had no comment to make on a claim by Irish International Deer that the company had offered on the previous Wednesday to stop using the brochure, to promote the bond or to accept any investment applications on the basis of the advertisement or brochure.

The same assurance is understood to have been given by the company to the Central Bank which, the company says, had expressed its concern about the use of the term "guaranteed income" in the March 1st advertisement.

Anyone offering deposit income or interest must have a banking licence and be regulated by the Central Bank. Irish International Deer is understood to have told the Central Bank that the 10 per cent "income" is, in fact, interest paid on the corporate bond and not conventional interest income.

A spokesman for Irish International Deer Care said it would now proceed to raise the £7.5 million on the basis of a private placing, and prospective, investors will, be offered "a memorandum" which will describe the terms upon which Galtee Deer Care will borrow money from individuals. "This will not be an offer of sale or a brochure," he said.

When asked if the company would target this private placing at people who responded to either its initial advertisement or the brochure, the spokesman declined to comment, nor would he reveal how much of the £7.5 million had been subscribed.

"The annoying thing about all this is that there seems to be more noise about the presentation of this project than the project itself. We have had no adverse comment whatsoever about the underlying product, the deer," the spokesman.