Chesterton Finance Limited, the company at the centre of the Garda inquiry into IRA money laundering, sought outside investors by offering returns significantly more attractive than those readily available from the commercial banks.
Correspondence seen by The Irish Times, indicated that the company promised investors a return of 10 per cent a year in February 2003. At the time the best rate on offer from the commercial banks for sums of up to €20,000 was 2.3 per cent.
An individual described as the principal of Chesterton - who cannot be named for legal reasons - is a central figure in the ongoing Garda investigation into money laundering by the republican movement.
Mr Phil Flynn, the former trade unionist turned business consultant, became a non-executive director of the company last year. This link has already cost Mr Flynn a number of high profile posts in the private and public sector.
Details of the terms offered by Chesterton are contained in letters from a then partner in PricewaterhouseCoopers (PwC) to an adviser to a prospective investor in Chesterton.
The partner in question, Mr William Roche, refers to Ballincollig Co Cork-based Chesterton as a client of the international accountancy firm in a letter dated October 2001.
Mr Roche, a partner in the tax and legal services department of PwC until about a year ago, says in the latter that "their established investment policy is to lend on security of fixed assets where the value of the security is at least twice the amount of the lending".
In another letter dated February 2003, Mr Roche refers to the returns being offered by the company. "The rate of 10 per cent per annum for a period of one year is in the present economic climate a very good rate.
"We all know the aftermath implications of (sic) stocks and shares in regard to the terrorist attack in New York on 11th September 2001. Clearly, commentators have indicated it will be a matter of some time before stocks and shares are used as a suitable investment medium."
Mr Roche wrote again on Chesterton's behalf in May 2003. He explains that the company is "engaged in the business of lending money on foot of taking charges on land and property for borrowings. It is the company's policy that the market value of the land secured has to be at last twice the amount lent on it."
He adds that copies of documents relating to the security are available for inspection, before once again pointing out "the rate of interest being paid by the company to the investor is way in excess of the deposit rate obtained from a financial institution".
Mr Flynn, who was questioned by the Criminal Assets Bureau, about Chesterton has described it as a "clean" company. However, he said that he had made an error of judgment in joining the firm.
The former Irish Congress of Trade Unions president said that he took a 10 per cent stake in the business in return for helping to turn it around. He told RTÉ that he travelled to Bulgaria in recent weeks with the principal of the firm, reportedly to look at property investment opportunities.
Mr Flynn resigned as chairman of Bank of Scotland (Ireland), the VHI and the Government's decentralisation implementation committee, before the weekend. He subsequently stepped down from property group Harcourt Developments Ltd. Mr Flynn, who is a former vice-president of Sinn Féin has asserted that he had "no involvement good, bad or indifferent in money laundering".
PwC are the second largest accountancy firm in the state, with a fee income last year of €151 million. Its clients include numerous Government Departments and agencies as well as some of the best known businesses in the country.
