Witness not told of name on loan papers

A former secretary of Mr Aidan Phelan, accountant and financial adviser to Mr Denis O'Brien, was not told for more than a year that her name was on documents being used to secure a £420,000 loan for a company owned by Mr Michael Lowry, the Moriarty Tribunal heard yesterday.

Ms Helen Malone, currently a partner of Mr Phelan in the firm AP Consulting, supplied corporate secretarial services to Mr Phelan from August 1997.

In December 1999, she told the tribunal, Mr Phelan asked her whether it would be possible to sign a resolution on behalf of the directors of the company Catclause Ltd as its directors were unavailable. It was urgent that the documents be signed, she said Mr Phelan told her.

Catclause Ltd, a British-registered company, had been established to acquire a 1.6-acre development site at Cheadle, outside Manchester. Mr Lowry and his daughter Lorraine were its directors.

Ms Malone said she advised Mr Phelan that it would be possible for them to sign a resolution if they had the authority of the directors.

"So he went away and he presumably checked with Mr Lowry because he told me that, yes, we had the authority to sign, and would I sign some documentation which the bank had given." She did sign the documents.

She said she heard no more until early 1998 when Mr Phelan told her there had been a difficulty with the guarantor on the loan, that they were not using the company anymore." Though she knew money had been drawn down on the loan, Ms Malone said she assumed that the problem with the guarantor meant the bank was no longer relying on the original documentation. She was "completely unaware" the documents continued to exist in the bank, she said.

"I understood it to mean the bank were ... drawing up a new set of documents." However, she got the impression that Mr Phelan was embarrassed, as "he had assumed responsibility for the loan". By January 2000, she said, "Mr Phelan just wanted the property sold to pay the bank back rather than it be an ongoing transaction." Asked when she became aware that the loan still relied on the documents she said it was not until the matter came before the tribunal early this year.

Following a meeting in Dublin in August 2000, attended by Mr Lowry, Mr Phelan and his English solicitor, Mr Christopher Vaughan it was decided that Catclause Ltd would be struck off the Companies Register. Ms Malone arranged the strike off.

The tribunal yesterday also examined a property purchase in Spain, in 1996.

Though the property was sold by Mr David Austin to Mr Denis O'Brien in that year, the tribunal heard the paperwork on the sale was not completed until earlier this year.

Ms Malone, who had been processing paperwork on the sale for Mr Phelan's client, Mr O'Brien, said she was not surprised that the documentation was not "sorted out" within five years.