Docklands king's downfall – why Nama pursued Harry Crosbie

On August 3rd, 2012, McCann FitzGerald, solicitors for Nama, wrote a five-page letter to William Fry, solicitors for well-known Dublin businessman Harry Crosbie.

It is an extraordinary letter to a man who over the decades helped transform Dublin’s docklands, notably by founding the Point music venue, now the O2, in 1988.

Mr Crosbie businesses’ have employed hundreds of people and generated revenues of between €100 million and €150 million a year for the city.

However, the contents of the August 2012 letter, which is disputed by Mr Crosbie, paints a different picture.

The 11 headings in the letter outline what Nama describes as “actions taken by Mr Crosbie . . . which had not previously been disclosed by him” at a time when he and his various companies owed the state agency €420 million.

Nama told the High Court the allegations in the letter were an important part of the context in which it was seeking to enforce a €77 million loan against Mr Crosbie.

The issues identified by Nama are detailed below with explanations in parentheses:

1 "Cash payments made to various family members, including payments of €740,000 and €650,000 to Mr Crosbie to Rita Crosbie [Mr Crosbie's wife] following the acquisition of the connection's loans by Nama. No approval was sought from Nama for these payments. It was also acknowledged by Mr Crosbie that, with regard to the payment of €740,000, these funds originated from the misappropriation of the AIL [the company that owns the O2 theatre] dividends charged in our client's favour."

2 “In 2010 and 2011, Mr Crosbie diverted dividend payments of €1.5 million, charged in favour of Nama, in respect of shareholding in AIL. This is a very serious matter for your client and it is regarded by Nama as tantamount to diverting monies to which the taxpayer is entitled. This matter must be addressed.”

3 “Following the acquisition of the property in Wexford [a holiday home and music studio] in 2007, we understand that Mr Crosbie spent in excess of €3.2 million on the property, which he continues to assert is held by his wife.

Details of the source of this funding has not been disclosed to Nama.”

4 “Nama has concerns about the value attributed by Mr Crosbie to chattels and to the contents of the various properties in which he and Mrs Crosbie have an interest. In this regard, Mr Crosbie has refused to permit a valuer to itemise and value the contents of the properties.”

5 "Your client has now admitted to holding a 45 per cent interest in an investment property in France, details of which were not previously disclosed. In fact your client repeatedly denied having any ownership interests in any French property, other than Cap Ferrat, when this matter was specifically and repeatedly raised with him on 21 June 2012."

6 “Mr Crosbie misrepresented ownership of the leasehold interest in the property from which Cafe H [a bar and restaurant in the south docks] trades.

The lease is held by the Grand Canal Theatre Company Ltd and accordingly, is charged together with any income and profits from the lease, to Nama.”

7 "Mr Crosbie did not disclose significant cash gifts to and assets purchased for his children or the significant payment made to Trevor Bowen [former director of Principle Management, U2's management company which was sold last year to Live Nation]."

8 “Accounts show that the following drawings were made by your client . . . €1.5 million in 2011, €1.55 million in 2010, €1.22 million in 2009 and €2.86 million in 2008 from various companies in the connection.”

9 "The statement of affairs furnished to Nama did not disclose funds that are held on deposit both in Ireland and France."

10 "In your letter of 22 June 2012, you indicate that a property in St Remi, France was acquired by a company called Greenroth and that the shareholding in the company is owned by Rita Crosbie and Christian Frankel.

However, in preparing tax returns, Mr Crosbie declared an interest in this property.”

11 “In the statement of affairs furnished, Mr Crosbie valued a property in Nice at €1 million, whereas Nama understands that the property is in fact situated in Cap Ferrat and is valued at between €3.5 million and €4.5 million.”

McCann FitzGerald also said that Nama believes “representations” were made to Live Nation, co-owner of the O2 theatre with Mr Crosbie, on the Dubliner’s behalf “asking them to withhold their consent” to it taking a charge on his shares in the company.

Nama does not say who intervened but, if this happened, it must have been someone very influential to be able to tell the world’s biggest music promoter what to do.

Emails attached to a supplemental affidavit by Bernard McLoughlin, senior asset recovery manager with Nama, give further insight.

On June 22nd, 2012, Nama warned Mr Crosbie’s lawyers that if the businessman “purposefully and willingly decided to omit assets and transfers which should have been declared”, then it will consider seeking to have him “prosecuted for breaking the law” under the Nama Act.

Mr Crosbie in a letter to Nama on March 28th, 2011, accused his then portfolio manager Paul Hennigan of acting like a "caped crusader and we are evil doers".

This week Mr Crosbie claimed he was bullied in “vicious” negotiations with Nama.

However, Mr McLoughlin, his Nama manager since September 2012, disputes this: “Save as outlined in his letter of 28 March 2011, the defendant never raised any further issue in relation to Mr Hennigan. If the defendant did have any further concerns . . . it is unfortunate that he failed to raise such issues in a manner which might have facilitated a resolution rather than making serious allegations against a named individual in this forum.”

Mr Crosbie disputes every serious allegation made by Nama. He says any asset omissions were “unintentional,” and notes Nama took €20m in cash from him in December 2010.

His legal team argues he deserves the opportunity to present fully his position in court. It claims he had a “comprehensive agreement” with Nama not to pursue him personally in return for certain actions including selling his stake in the O2 for €35 million and putting his French properties up for sale. Nama says it never agreed to any such deal.

In the coming weeks, Mr Crosbie will learn whether he will be allowed to mount a full defence, or if the curtain is about to fall.