Century couldn't afford costly launch

Century Radio's financial situation was so bad by the time it went on air in September 1989 that its head of finance asked for the launch party to be scaled down.

Ms Noreen Hynes, who joined Century in June 1989, said that because of her concerns about the station's finances, she asked a director, Mr James Stafford, to reduce the scale of the launch party. Century couldn't afford an elaborate celebration, she said.

Mr Stafford said he would do this but ultimately more money was spent than should have been, Ms Hynes said.

The witness said she agreed with the assessment by the company chairman, Mr Laurence Crowley, that the gap between income and expenditure was dramatic. Mr Crowley was seeking a reduction in expenditure of 20 per cent at that time.

Sales were less than expected and expenditure was much higher, Ms Hynes told Ms Eunice O'Raw, barrister for the tribunal.

Regarding a sum of £26,250 that was listed as an expense in Century's accounts, Ms Hynes said she never received an explanation for this sum in spite of several attempts to obtain one.

In earlier evidence, it emerged that this sum comprised £21,250 invested by Century in a secret application for a Dublin radio licence, and a £5,000 donation to Fianna Fail.

Ms Hynes said she was never told about the Dublin licence application. She should have been involved as it was an investment by the company.

By November 1989, Century's net assets were less than half of its called-up share capital, so an extraordinary general meeting of shareholders was required unless more investment was found. Ms Hynes informed the company solicitor that an investment of £1.6 million was needed.

When she left the company in August 1990, Ms Hynes still hadn't received an explanation of the £26,250 figure, she said. Neither had she received information about the breakdown of the share capital account, in spite of requests for this, and didn't know who was putting money into the company.

She also couldn't recall getting details of the expenses incurred by the directors.

After Ms Hynes left the company, new investors came on board and Mr Barry and Mr Stafford sought to recoup a sum of £40,000 which Mr Barry said the company owed him. Mr Barry said he had provided full-time management services costing £1,600 a week.

Ms Hynes said yesterday she knew nothing about this. Mr Barry had never discussed with her his consultancy work for Century and if he had, she would have reflected it in the accounts.

She was not aware of a sum of £40,000 being due to Mr Barry, she said. He had not mentioned this to her.