AIB handling of Quarryvale project was 'irregular'

ALLIED IRISH Banks' handling of Tom Gilmartin's Quarryvale project was "most irregular", a property consultant to the Luton-based developer told the Mahon tribunal yesterday.

Richard Forman, director of property consultants Connell Wilson, who worked with Mr Gilmartin on the Quarryvale development, said AIB officials "took an aggressive attitude and started to dictate how matters should proceed as though they and not Tom were the shareholders of Barkhill".

Barkhill Ltd was the company behind the Quarryvale project.

Mr Forman said the whole thrust of the bank's attitude appeared to be designed to force Mr Gilmartin to pass over equity and control of his company to Cork developer Owen O'Callaghan.

"I was aware also of Tom getting demands to attend meetings at the bank at a moment's notice, the sole purpose of which appeared to be to abuse him," Mr Forman said.

Mr Gilmartin borrowed £8.5 million from AIB in 1990 to assemble a site at Quarryvale in west Dublin, which became the Liffey Valley Shopping Centre.

However, he did not produce the investors he had promised and ran into financial difficulties repaying the short-term loan.

After some negotiation, Mr O'Callaghan took a 40 per cent stake in the project, AIB took a 20 per cent stake and Mr Gilmartin retained the remaining 40 per cent.

Mr Forman told the tribunal he went to a meeting at the bank with Mr Gilmartin and Mr O'Callaghan was present without having been invited by either Mr Gilmartin or Mr Forman.

This happened before any deal was made with Mr O'Callaghan, he said.

"This drive by the bank to try and get Mr Gilmartin to hand over a share in his company to another customer appeared most irregular," Mr Forman said.

He said if the bank had been really concerned about its money in the project it could have forced the sale of the site.

Counsel for the tribunal Pat Quinn SC said Mr Forman was being critical of the bank, although it should have been repaid in August 1990 and had let the matter roll on pending discussions with potential investors.

Mr Forman said the discussions had not ended when the bank pressured Mr Gilmartin into the deal with Mr O'Callaghan.

He told counsel for Mr Gilmartin Jarlath Ryan that what surprised him most was the pressure the bank put on Mr Gilmartin to "drive him into the joint venture arrangement".

However, counsel for AIB Richard Law Nesbitt SC said the bank had done what it thought best and given the ultimate success of the project, the bank seemed to have chosen the correct route.