The then chief executive of Aer Lingus, Mr Cathal Mullan, was forced to resign six months before the end of his contract in 1993, it was claimed on day 27 of the Aer Lingus Holidays fraud conspiracy trial.

The claim was made by defence counsel, Mr Adrian Hardiman SC, during his continued cross-examination of chartered accountant Mr Thomas McCarthy at Dublin Circuit Criminal Court.

Counsel asked witness if he was aware "the chief executive of Aer Lingus was sacked six months before the end of his contract" and that the former Aer Lingus Holidays chief executive, Mr Malachi Faughnan, felt he had been "harshly treated" by the parent company when replaced in 1990.

Mr McCarthy replied he was unaware of the details of any matters concerning the various executives and board members. His work was involved solely in investigating if there had been false accounting and fraud.

Mr McCarthy was a leading member of the Craig Gardner team which produced a report in 1990 for Aer Lingus showing there had been "serious systematic false accounting" in its Holidays subsidiary. The Government ordered Aer Lingus shortly after to close the subsidiary with heavy losses.

In the trial, Mr Peter Keely, of Carrig Avenue, Dun Laoghaire and Mr Desmond P Flynn, of Tritonville Avenue, Sandymount, are pleading not guilty to conspiracy to defraud.

Both men deny they conspired together and with Mr Peter Noone, on dates from March 1987 to November 1988, to defraud Aer Lingus Holidays by misappropriating funds to purchase part of the Los Hibiscos apartment complex in Lanzarote for their own use and benefit.

The hearing continues before Judge Kieran O'Connor.