Court told auditors of ALH misled by managers

The Aer Lingus Holidays auditors were misled by senior management concerning a multimillion pound property transaction in 1988, the jury in the fraud conspiracy trial has been told.

Mr Mark Dobbyn, of Stokes Kennedy Crowley, revealed that the copy of the leasing document in relation to two apartment blocks in Lanzarote was shown to him with the date deleted and he was told the transaction took place in the 1989 financial year rather than in 1988.

Mr Dobbyn agreed that the ALH board minutes for October 5th, 1988, and signed on October 26th, 1988, indicated he had been totally misled. The £5.3 million transaction for the La Penita and Las Vegas blocks should have been included in the 1988 accounts.

He had personally raised this point in December 1988 in a pre-audit discussion with the ALH financial controller, Mr Peter Noone. He next raised it in May 1989 with Mr Louis Slater, the then Aer Lingus financial controller and ALH board member, just before signing the 1988 accounts.

Mr Dobbyn said he next raised it in August 1989 at a meeting with Mr Slater and his successor, Mr Kyrl Acton. It was day-28 of the trial of Mr Peter Keely, of Carrig Avenue, Dun Laoghaire, and Mr Desmond P Flynn, of Tritonville Avenue, Sandymount, who are pleading not guilty to conspiracy to defraud.

Both men deny they conspired together and with Mr Noone, on dates from March 1987 to November 1988, to defraud Aer Lingus Holidays by misappropriating funds to purchase part of the Los Hibiscos apartment complex in Lanzarote for their own use and benefit.

Mr Dobbyn told defence counsel Mr Adrian Hardiman SC (with Mr Michael Cush SC and Mr Gerry O'Brien BL), for Mr Keely, that a deliberate attempt to mislead an auditor can be difficult to detect.

The hearing continues before Judge Kieran O'Connor.