Information furnished to the Revenue Commissioners by Central Tourism Holdings (CTH), the company of which Mr Denis Foley TD was a director, created an "erroneous impression" of the state of its finances, the tribunal heard yesterday.
Mr Paul Carty, the auditor who oversaw the company's accounts, agreed that an approximate statement of affairs, prepared by the company around 1987 to settle its tax liability, gave the misleading impression that a £135,510 debt repaid in 1985 was still outstanding.
Mr Carty, a senior partner with Deloitte and Touche and formerly Haughey Boland, stressed it was the responsibility of CTH and not the auditors to prepare the accounts as well as the statement of affairs.
In settling with the Revenue, the company's four directors made payments of £2,787 each. These included a payment from the estate of the late Mr William Clifford, of which Mr Carty was a joint-executor.
A further £5,000 was paid by each director towards discharging debts to creditors.
Mr John Coughlan SC, for the tribunal, pointed out that the effect of paying off the Revenue and creditors was that it avoided a liquidator being appointed.
Mr Carty said this was never a consideration to him.
Later Mr Carty said he never received a cheque for £42,680 which was sent by Mr Foley to Haughey Boland in 1987 supposedly to clear CTH's indebtedness with Guinness & Mahon.
Mr Carty agreed this should have been treated as an asset in the company's books, given the debt had already been paid off.
Asked how the Revenue would have reacted if it had found out the debt had been discharged, Mr Carty agreed it would have raised an inquiry which could have opened up the back-to-back nature of the security on the loan.
