THE Irish Permanent Building Society has started High Court proceedings alleging a conspiracy to defraud it of £100,000 with the sole purpose of enabling the society's former managing director, Dr Edmund Farrell, to buy a property in Oughterard, Co Galway.
The President of the High Court, Mr Justice Costello, was told yesterday the allegation would be vigorously defended when the matter came for hearing.
Mr Justice Costello said there were four actions and they should be heard by one judge, who will also hear a counter claim that the proceedings were brought maliciously and in bad faith.
The first action is against Dr Farrell, Utrecht Consultants Ltd, alleged to be an Isle of Man registered company under the control of Dr Farrell; Trivo Ltd, another Isle of Man company and its managing director, Mr Kelvin Smythe.
Mr Patrick McCann, counsel for a number of the defendants, said Utrecht owned a property in Galway. It was the society's case that money came from the society through a fraudulent transaction, passing through the hands of Trivo and ending up in the hands of Utrecht. The society maintained it owned the Galway property.
Trivo, said Mr McCann, had brought what could be described as debt collection proceedings against the Irish Permanent. In that claim Trivo alleged to have had a contract to provide services to the society which the society terminated prematurely. The society was claimed to have terminated the contract because of the alleged fraud.
In a further set of proceedings, the society alleged the monies were paid to Dr Farrell in consideration of him entering into a restrictive covenant in the sum of £300,000 and that the society entered into this covenant as a result of a conspiracy.
Mr McCann also referred to another company, Quasar, which is being sued by the Irish Permanent, and in which Mr Kelvin Smythe was a substantial shareholder and provided services to the society through this company.
Mr McCann said the background to all these proceedings was the plan to convert the society into a public limited company and float it on the Dublin Stock Exchange. All those involved in that plan, including those who gave advice, were all relevant to all the proceedings.
