Fraud probe plea into firm associated with Reynolds
Albert Reynolds: held an interest in Jersey-registered company
A FIRM of builders has asked the Attorney General in Jersey to initiate a fraud investigation into a company associated with former Taoiseach Albert Reynolds.
Lawyers in St Helier, retained by the Derry-based contractors O'Neill Brothers, have requested the AG in Jersey to investigate Universal Management Consultants (UMC), a company where Mr Reynolds held an interest.
The Investigation of Fraud (Jersey) Law, 1991, gives the AG there special investigative powers to inquire into a suspected fraud wherever it is committed.
O'Neill Brothers Ltd is already suing Mr Reynolds, his business associate and the Jersey-registered UMC, in the Dublin High Court for the return of £600,000 it claims was advanced to fund two developments, one in Derry and the other in Co Dublin.
The Dail Committee of Members' Interests is currently inquiring into a complaint that Mr Reynolds has breached ethics rules, which require members to declare their business interests.
Mr Reynolds has denied any wrong-doing. He will defend the High Court action and, he says, he has fully complied with his responsibilities regarding the register of members' interests.
Mr Reynolds' involvement with O'Neill Brothers began in November 1997 when a Derry businessman, Noel Gallagher, who had arranged meetings between the former Taoiseach and Derry republicans before the 1994 ceasefire, asked the O'Neills to meet Mr Reynolds.
The O'Neills were very taken with his involvement in the peace process and they felt honoured to do business with him and his business associate, Patrick Russell.
The O'Neills claim they agreed with Mr Reynolds and Mr Russell to form a joint venture company, Hale Developments, registered in the UK, to develop an hotel and some 200 houses on the site of the Good Shepherd Convent in Derry.
NO AGREEMENT
Mr Reynolds, however, states that the joint venture company was to be set up by the O'Neills on one hand and UMC on the other, and that he never made any agreement with the O'Neills in his personal or private capacity.
A document prepared by a senior executive of the accountants Ernst & Young, listing the interests of UMC, says the promoters of this company include Albert Reynolds TD. The document also says UMC was involved in a joint venture in Sheffield, that it had a 30pc stake in Lazer Quantum Ireland and a 50pc share in Valemoor, which was developing houses in England.
The O'Neills paid £300,000 to UMC as their contribution to the joint venture and allege they have an agreement with UMC where it would provide the rest of the funding and bring a hotel chain to the Derry site.
RECEIPT
A receipt dated February 5, 1998, and purported to be signed by Mr Reynolds and Mr Russell on behalf of UMC, is among the exhibits lodged in the High Court.
Letters from Mr Reynolds on Dail and UMC headed notepaper are among exhibits in the O'Neills' High Court action to secure the return of £600,000 they provided to UMC for the two development projects.
According to Des O'Neill, some of his meetings with Mr Reynolds and Mr Russell took place in Leinster House.
In his defence, filed with the High Court, Mr Reynolds says he never acted in a personal capacity, as the O'Neills claim, and that the joint ventures were solely between O'Neill Brothers and UMC.
In effect, Mr Reynolds appears to be saying he was acting solely as an agent for UMC and that the O'Neills money was lost in Hale Developments, the joint company O'Neill Brothers founded with UMC, a vehicle for their ventures together.
Mr Reynolds denies agreeing to pay the O'Neills £250,000, as they claim, or that he is in breach of contract.
By SAM SMYTH
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