Virgin Islands firm was to receive £3m from Four Seasons

A company with links to the British Virgin Islands was to receive £3 million (€3.8 million) from the Four Seasons development in Ballsbridge, Dublin.

The directors of the company, Marlast Ltd, are the former chairman of ACCBank Mr Dan McGing, and financial adviser Mr Barry Kenny. The beneficial owner of Marlast is not known, but its sole shareholder is a British Virgin Islands company called Rhea Investments Ltd. Neither Mr McGing, who was non-executive chairman of ACCBank up to April 1996, or Mr Kenny could be contacted yesterday.

Harvard Properties Ltd was to give Marlast £3 million from a deal it, Harvard, had negotiated with one of the investors set to buy the five star Ballsbridge hotel once it was completed. However, the profit may be endangered because of construction budget overruns.

Under the deal, Harvard, one of the developers of the Ballsbridge hotel, was to receive £12 million from the investor once the hotel was complete and open for business.

The £12 million was part of the £59 million total which was to be paid for the hotel by investors.

Harvard, which is now in receivership, is understood to have had an interest in the Ballsbridge development whereby it would buy apartments on the top floor of the building.

However, investors who were set to buy the hotel were unhappy with this aspect of the deal and in December 1997 an agreement was negotiated whereby a new investor would buy out Harvard's interest for £12 million.

The December 1997 agreement was between Harvard and a company called Stoneyview Ltd. Stoneyview, which is now dissolved, represented the new investor.

In October of last year a charge or legal entitlement was created by Harvard on "any sum in excess of £9 million which may be received by Harvard" pursuant to the December 1997 agreement.

The entity entitled to the charge created by Harvard is Marlast Ltd. Mr McGing and Mr Kenny are also directors of Harvard and the two companies have registered offices at Clifton House, Lower Fitzwilliam Street, Dublin 2.

The original group of investors, who were to buy the hotel for approximately £47 million, were assembled by the accountant and former Revenue inspector Mr Derek Quinlan, following an approach to him by ACCBank in late 1996, according to sources.

The investors formed a partnership called the Nollaig Partnership. The bank already had an agreement with the Four Seasons group at this stage.

The negotiations to put the complex deal in place took about 12 months and it is understood it was not until the negotiations were well under way that the partnership learned of the plan to have apartments on the top floor of the hotel building.

As those involved did not want to change the Nollaig Partnership and its arrangement, Stoneyview was used to buy the interest in the floor of the hotel building from Harvard. Mr Quinlan was a director of Stoneyview, which had its registered offices at 10 Clyde Road.

An agreement exists between Stoneyview and the Nollaig Partnership for the entire building to be used as a Four Seasons Hotel. All of the arrangements were put in place in December 1997.

Many of the parties to the complex Ballsbridge deal did not know until recently that in October 1999 Harvard had created a charge which would grant Marlast the right to £3 million from the £12 million it was to receive from the deal.

A charge in favour of ACCBank had been registered by Harvard in March 1998.

The charge registered by Harvard in favour of Marlast is one of the factors of the deal which have annoyed Bank of Scotland Ireland, one of the four banks involved in a consortium which has funded the Ballsbridge development to date.

It has taken legal action against ACCBank, the lead bank in the consortium, arising out of that bank's handling of the whole project. The other two banks involved are Scotia Bank and Anglo Irish Bank. In all the four banks are understood to have put in excess of £51 million, and perhaps as much as £60 million, into the development. The original budget for the construction of the building was £51 million but this has now been exceeded, possibly by as much as £10 million.

The main developer involved is Simmonscourt Holdings, a company incorporated in December 1996. Harvard acted as a conduit through which funds from the banks were passed to Simmonscourt. Both companies were placed in receivership last week by three of the four banks, with Bank of Scotland Ireland not supporting the move.

The receiver, Mr Pearse Farrell, of Farrell Grant Sparks, is now trying to establish exactly how much money has already been spent or committed, and how much more is needed to finish the building. He will endeavour to get all the parties involved to contribute towards the completion of the project. It is possible a further £10 million may be needed.