Accountants deny part in Haughey letters to convert loan

Senior members of Deloitte & Touche, former accountants to Celtic Helicopters, have denied preparing documentation which describes a £290,329 investment in the aviation company as a loan.

Mr Ciaran Haughey, secretary of Celtic Helicopters, said on Wednesday that Deloitte & Touche had prepared two letters requesting the "loan" to be converted into new shares. Yesterday, however, Mr Paul Carty, Deloitte & Touche's liaison partner with Celtic Helicopters, said the accountancy firm had not prepared the letters. He had not given instructions on wording them and "I in turn checked to see had we any involvement in that and I was advised, no, we hadn't".

The first letter, of February 14th, 1996, was to Celtic Helicopters from Larchfield Securities, the company owned by the four Haughey children. Signed by Mr Conor Haughey, it read: "we refer to a loan in the amount of £290,329 which we advanced to the company in 1991. We now give irrevocable instruction that the loan be converted into preference (sic) share capital as soon as possible."

The second letter, dated the next day, was by Mr Ciaran Haughey to Deloitte & Touche. It read: "Please prepare the documentation necessary to convert the existing loan in the amount of IR£290,239 (sic) into non-cumulative preference shares of IR£1 each."

Mr Ralph MacDarby, of Deloitte & Touche's secretarial division, said he played no part in writing the letters either.

He said the use of the word "irrevocable" and the misspelling of "preference" would suggest it was not prepared by his firm. It was possible, he said, that Smurfit Finance, from which Celtic Helicopters was seeking a loan, had offered advice. The bank had said it would only approve a new loan for the company if the £290,329 was in shares.