Punchestown centre needs €2.5m State aid to continue

The group of companies that run the Punchestown equestrian complex will not be able to continue trading without a promised €2.5 million from the State horse racing body, Horse Racing Ireland (HRI), according to accounts just filed.

The accounts also show that one of the Punchestown companies, Blackhall Racing, plans to make a €2.15 million settlement with the Getty family, which was owed €3.8 million arising from an investment-for-passports deal done in March 1999. The settlement has not yet been agreed by the Punchestown shareholders, according to notes to the accounts.

A new joint venture company (JVC) involving HRI and the Kildare Hunt Club is to be established to run Punchestown before the €2.5 million grant from HRI is to be handed over.

However, the outcome of a Revenue inquiry into past land dealings by companies within the Punchestown group is being awaited before the JVC is established. The JVC is expected next year.

The Punchestown companies have in recent years received State grants significantly in excess of €20 million, including a €14.37 million grant given by the Department of Agriculture to provide 100 per cent funding for an agricultural event and exhibition centre.

Punchestown Enterprises Co Ltd, the company responsible for the running of the centre, stated in its accounts that, although it made a small profit this year, cash facilities are not sufficient to fund the activities of the company.

The directors of the company believe the HRI grant and improved trading conditions will enable the company to continue for the foreseeable future.

The €14.37 million grant for the Co Kildare complex was approved following a direct approach to the Minister for Finance, Mr McCreevy, by representatives of Punchestown. It was subsequently approved by the Department of Agriculture. The grants were investigated by the Comptroller & Auditor General who concluded that normal guidelines were not followed.

Punchestown is run by a number of companies, and the land is leased to them by the Kildare Hunt Club.

Issues to do with possible VAT bills arising from leasing arrangements between these entities are holding up the establishment of the JVC. Interest and penalties could arise.

The VAT bill is reported to be around €750,000, although this could not be confirmed.

Blackhall Racing, the company that operates the racetrack, has a €317,435 loan from MCD, the concert promotion business run by Mr Denis Desmond.

The loan, which is to be repaid in 2005, was advanced in return for exclusive rights being given to MCD for concerts at the racecourse.