Auditors to the Dunnes Stores Group made numerous attempts to discover the purpose of a £282,500 payment to a company called Tripleplan, but never received an explanation, the Moriarty tribunal heard yesterday.
A search for the identity of Tripleplan carried out by Oliver Freaney & Co during a separate audit lasted four years and was only completed in February 1998.
It revealed that Tripleplan had an address in London and its directors were the Cayman Islands bankers, Mr John Furze and Mr John Collins. The private firm was dissolved a year after the £282,500 payment was made.
During an audit of Dunnes accounts in 1988, a company accountant, Mr Noel Fox, and senior executives were asked about the mystery cheque which had been uncovered, but said they had no knowledge of it.
However, the tribunal was shown a compliment slip regarding the Tripleplan payment addressed to Mr Fox. The had been written by Mr Matt Price, a Dunnes Stores executive in Bangor, Co Down.
The slip read: "Dear Mr Fox, I enclose herewith a cheque payable to Tripleplan Ltd for the amount of £282,500 sterling, as agreed with Mr Bernard Dunne."
Mr Kevin Drumgoole, an audit manager with Oliver Freaney & Co since the 1980s, said yesterday he had been involved in audits of Dunnes Stores from the early 1980s until 1994. It was the policy of the firm to retain audit files for around six years, after which time the documents were shredded.
However, audit files relating to Dunnes Stores Ireland Company were still available from 1989, as subsequent audits had only recently been completed.
The £282,500 cheque to Tripleplan came to light in early 1988 during an audit of Dunnes Stores in Newry, Co Down. After the discovery, Mr Drumgoole said, he had to "make inquiries as to the purpose of the cheque".
First he sought information from Mr Price and Mr Michael Irwin, the financial accountant to the Dunnes Stores Group.
Mr Price had posted the amount of this cheque to an intercompany account in Dublin. In his evidence, Mr Price had said the cheque was not paid to cover any expense or any purchase by Dunnes Stores in Bangor, but was paid on the instruction of Dunnes Stores in Dublin for its own purposes.
Mr Drumgoole said the cheque was reflected in the Dublin books as "a suspense item", meaning it required some form of identification or clarification. No documentation connected with the cheque could be found, he said.
During his attempts to identify the purpose of the cheque, he spoke to Mr Price, Mr Irwin, Mr Fox and possibly also Mr Dunne.
Mr Price informed him the cheque had been sent to Mr Fox "on the instructions of Mr Ben Dunne". He also said he had a compliment slip with it showing how he had sent the cheque and that this was addressed to Mr Fox.
Mr Irwin, the chief accountant in the Republic for the Dunnes Group, said he had no information about the payment and he had asked Mr Dunne about it. However, Mr Dunne had referred him to Noel Fox and he then asked Mr Drumgoole to make inquiries to Mr Fox on the matter.
Asked by counsel for the tribunal what happened when he approached Mr Fox, Mr Drumgoole said he could not remember his specific response, but said he "didn't get any information. I know he would have undertaken again to go back to Mr Ben Dunne to seek information".
Other documents had since been obtained by the tribunal. An agenda of a meeting of the auditors held on September 30th, 1989, included the "identification of payments to J. Furze Tripleplan".
In a letter to Mr Fox on October 3rd, 1989, the auditor set out "a list of the various problems which must be sorted out before we finalise the accounts for the Dunnes Stores Group".
It went on: "As mentioned on Friday last, I asked Bernard Dunne about the payment to Tripleplan and J. Furze and he said he would need to talk to you to jog his memory on these payments".
In his evidence, Mr Drumgoole agreed that inter-company payments could normally be traced back to someone with whom Dunnes had a trading relationship.
Most inter-company payments had a paper trail, with "very, very few exceptions", he said. The Tripleplan payments and those to Mr John Furze, which were outlined during the McCracken tribunal, were not documented.
A search for Tripleplan was not instigated by the auditors as Mr Drumgoole assumed that either Mr Dunne or Mr Fox would have given him the information.
"How far do you go? As I say, we were auditors, but it wasn't our job to follow it all the way through. How many countries did you want to search to find something that you had no innate suspicions, or anything like that, about?" said Mr Drumgoole.
However, attempts to trace Tripleplan began in earnest in 1994 following an audit of Dunnes Stores' accounts headed by Mr Paul Wise, a chartered accountant and partner with Oliver Freaney & Co.
Mr Wise told the tribunal Dunnes was anxious to find the identity of Tripleplan in order to finalise its accounts.
In 1997 a search was carried out in various English-speaking jurisdictions, including Guernsey and the Isle of Man, to no avail.
Oliver Freaney & Co subsequently employed a British company, which carried out a search on its behalf. In February 1998 this company succeeded in tracing Tripleplan to offices in Chancery Lane, central London. Company registration records show the firm was dissolved in 1988.