Doyle's directors received £7.5m remuneration

The directors of P.V. Doyle Hotels Ltd received remuneration of £7.5 million in the 14 months to January 31st 1996, almost seven times the annual payment received in the years before and afterwards.

The details of the distribution of the £7.5 million among the company's ten directors are not known.

Mrs Margaret Doyle, wife of the late Mr P.V. Doyle, sat on the board, as did her three daughters, Ms Bernadette Gallagher, Ms Anne Roche and Ms Eileen Monahan, and Mrs Doyle's two sons, Mr David Doyle and Mr Michael Doyle. Mr Eoin Ryan senior, the former Fianna Fail senator, was also a director. The reason for the increased payments - which work out as an average of £750,000 for each director - is not known. A spokesman for the group last night declined to comment.

P.V. Doyle Hotels is the main trading company of the Doyle Hotel group. It is owned by P.V. Doyle Holdings Ltd, which is in turn 100 per cent owned by Thornhill Incorporated, an unlimited Irish company owned by the Doyle family. The Jurys hotel group is currently in negotiation with Doyles in relation to a possible £200 million buyout.

Income tax was deducted from the £7.5 million in directors' payments. The payments were treated in the company's books as costs in the profit and loss account and led to a commensurate reduction in the Corporation Tax bill for the period. At the time the Corporation Tax Rate was 38.6 per cent.

The Revenue has not queried the matter. However, Jurys is concerned that if the Revenue was to, and decided that the payments were excessive and not all linked to the company's trading in that year, the company could face a tax bill. Depending on the amount deemed to be excessive, the bill could be as high as £2 million.

This possible liability is understood to be one of the concerns Jurys has in relation to its proposed buyout of the Doyle group. Jurys is understood to be seeking indemnities and warranties covering this and other possible tax liabilities.

It is also concerned that it might, should the deal go ahead, be obliged to alert the Revenue in relation to Capital Acquisition Tax liabilities which it suspects may be linked to some of the Doyle Group shares. However, The Irish Times has learned from sources that no such obligation is believed to exist under tax law.

Jurys is also seeking protection from any costs which could flow from any discoveries made by the work of either the Moriarty and Flood tribunals. Yesterday, the Doyle Group said it had not been contacted by the Flood tribunal. Last week the group confirmed to The Irish Times that it is in contact with the Moriarty tribunal.

Both parties have said they are hopeful a share purchase agreement will be signed in the near future and the deal will go ahead.

Another possible tax liability identified by Jurys is one of approximately £95,000 which could arise from a loan given by P.V. Doyle Hotels Ltd to Mr Michael Doyle. In cases where a company makes a loan to a director, the company is obliged to make a tax payment to the Revenue. This payment can then be recouped when and if the loan is repaid.

It is understood Mr Michael Doyle received loans from P.V. Doyle Hotels Ltd which may have not led to the required tax payments by the company. The loans have been repaid but potential interest liabilities of the company in respect of the tax due over the period are understood to have been indentified which could lead to a potential exposure of £95,000, including interest and penalties. The size of the loans made to Mr Doyle are not known.

Another issue of concern which has been indentified is in relation to the price paid for a penthouse apartment in Dun Laoghaire, which was sold to Mr David Doyle in 1988 by Michael Doyle Construction Ltd, one of the Doyle group companies.

Mr Michael Doyle is no longer a shareholder in the Doyle Group. Under the terms of the proposed purchase of the Doyle Group by Jurys, a cash payment of £94 million would be made to the shareholders. These are Mrs Margaret Doyle, her three daughters and Mr David Doyle. A 25 per cent shareholding in the new group, likely to be called the Jurys Doyle Hotels group, is to be shared between Mrs Doyle and her daughters.