Broker was `alarmed' to learn his investment went to Haughey

A Monaco-based insurance broker has told the Moriarty tribunal that he was "surprised and alarmed" to learn that his £100,000 investment in Celtic Helicopters had ended up in an account for the benefit of Mr Charles Haughey.

Mr David Gresty said he made the investment in 1992 on the advice of Mr Mike Murphy, whose company was insurance broker for the helicopter firm.

After transferring the funds, he inquired of Mr Murphy "perhaps once a year" about the investment, but was told little except: "Not to worry, the airline's still flying."

The tribunal heard that Mr Gresty, originally from the UK, had been working in insurance since 1957 and was now the managing director and sole shareholder of DB Agencies. The company specialised in marine and aviation insurance and, through a relationship with Mr Murphy's company, it had built up substantial business in Ireland since the 1980s.

The business, based mainly on agriculture and beef in particular, grew "enormously" from 1988 onwards.

A relationship of "absolute trust" developed with Mr Murphy, from whom DB Agency's Irish business emanated.

Up to 1992, Mr Gresty had invested in a number of Irish ventures on Mr Murphy's advice, "and generally they proved profitable".

In early August 1988, Mr Murphy contacted him about funding Celtic Helicopters.

He said the company had "two important directors", which Mr Gresty interpreted to mean that "this was a firm that was going to go places".

Mr Murphy was "someone in whom I had the utmost confidence, and trusted implicitly"; by late August or early September 1992, the investment was agreed.

On September 30th, 1992, Mr Gresty met Mr Murphy in Paris. Mr Murphy, who had been accumulating premiums due to DB Agencies, had separate cheques for £16,624 and £100,000.

The latter was to be Mr Gresty's investment in Celtic Helicopters, although there was no payee name entered on it.

In a letter sent from Monaco on October 15th, 1992, Mr Gresty formally confirmed the investment to Mr Murphy.

He told the tribunal he believed the cheque was going either to Celtic Helicopters' bank or to Deloitte Touche, and thought he was receiving shares and equity in return. He knew otherwise now.

The tribunal has already heard that the cheque was routed through a series of offshore accounts before settling in a sterling account used to pay Mr Charles Haughey's personal bills.

The first "serious" report Mr Gresty had about his investment was in 1997, when Mr Murphy told him that Celtic Helicopters and Mr Haughey were "mixed up in some sort of scandal".

This was the first time he had learned of a connection with Mr Haughey of whom he was aware "as a member of parliament and the Irish prime minister".

Mr Gresty said that he still trusted the integrity of Mike Murphy. Mr Murphy had promised to "stand on" the investment and Mr Gresty said he presumed this meant he would share any losses, or even reimburse him.

Asked if the £100,000 was "a disaster of an investment", he agreed: "On the face of it, it is." Asked if he was going "to have to look to Mr Murphy to get your money back", he said: "Ultimately, yes."

He added that he had been "completely shocked" to discover he held no shares in the company. In hindsight, he would not have made the investment.

He said he was surprised Mr Murphy had not told him that the broker had agreed to pay the aviation company's insurance premium.