The liquidator of MMI Stockbrokers Ltd has initiated fraud proceedings against the company's seven directors involving transactions totalling £1.9 million (€2.4 million). A robust legal response from the directors is expected.
Liquidator Mr Tom Kavanagh was yesterday granted a High Court injunction against former managing director Mr Oisin Fanning, of Forenaughts House, Naas, Co Kildare, and director Mr John Curran, of Kingsley Mews, Raglan Road, Dublin, preventing them reducing their assets in the jurisdiction to below £936,813 and £106,842 respectively.
The proceedings, which were brought without the seven former directors being notified, arise out of transactions where, according to Mr Kavanagh, more than £1.9 million was withdrawn from the MMI client account, purportedly as payments to a Jersey client company, Cater Allen, but which were apparently not paid to that company.
Mr Kavanagh said certain of the withdrawals were redeposited in the client account but credited to client funds in the names of persons including Mr Fanning, Mr Curran and others.
The beneficial owner or owners of Cater Allen are not known. The company's account with MMI was opened with the direct transfer in June 1997 of balances from accounts in the name of IBI Nominee Accounts. A Central Bank investigation in 1997 was told by Mr Fanning that these accounts were "previously owned by Oisin Fanning, Paul Boucher and John Curran", but that this was no longer the case. Mr Boucher, of Sandford Road, Dublin, is another MMI director.
Yesterday a spokesman for Mr Curran said: "He absolutely refutes any suggestion that he has been involved in the misappropriation of any funds. He fails to understand the action taken by the liquidator today and he intends to take whatever measures are necessary to set the record straight." Mr Fanning could not be contacted.
Central Bank documents given to Mr Kavanagh state the beneficial owner of the Cater Allen account was a Mr Adrian Lynch, of Kilkee, Co Clare. Mr Kavanagh told the court another MMI director, Mr Colm O'Reilly, of Alexandra Tce, Bray, Co Wicklow, suggested that Mr Lynch authorised payments from the account but he, Mr Kavanagh, considered this to be "not credible" as it was inconsistent with the agreement which existed between MMI and Cater Allen.
Cater Allen had authorised MMI to make all decisions in relation to the management of its funds and Mr O'Reilly's suggestion was inconsistent with this, Mr Kavanagh said.
Mr Lynch, a bookmaker, said he had never heard of MMI Stockbrokers, Cater Allen, or any of the directors of MMI when contacted by The Irish Times last night.
Mr O'Reilly, when contacted, said he did not know who the beneficial owner or owners of Cater Allen were. "I've no idea what this is about," he said.
The net effect of the transactions which are the centre of yesterday's court move was to reduce the debts owed to MMI by the accounts credited with the funds moved from the Cater Allen account. Despite those credits Mr Fanning, and debtors associated with him, still owe £912,689 to MMI. Another director, Mr Tim Murphy, of Knegare, Clane, Co Kildare, or persons associated with him, owes £97,380.
The injunctions granted against the two directors are until Tuesday next but Mr Justice Kelly said Mr Fanning and Mr Curran may in the intermediate period make applications to the court, if they so wish, to have the injunctions discharged.
The other directors of MMI are: Mr Cian Kealy, Sion Hill, Blackrock, Co Dublin; and Mr Peter O'Byrne, Montpelier Parade, Monkstown, Co Dublin. Mr Kavanagh was appointed liquidator to MMI in March of this year.
MMI is owed £5 million by debtors who owe money for stock bought by MMI on their behalf. However, many are alleging the sums are not in fact due because the MMI directors engaged in unauthorised transactions.
The books and records of MMI show £2.4 million owing to clients but only £1.18 million in the client bank accounts.
