Dunnes challenges claim by Harney officer on payments

A claim by an officer acting for the Minister for Enterprise and Employment, Ms Harney, that extra payments were made by Dunnes Stores which were not disclosed to the McCracken Tribunal contained "nothing whatever new" and was made for no other purpose "than getting headlines", the High Court was told yesterday.

Mr Adrian Hardiman SC, for Dunnes, said his clients had given details of those payments to the Moriarty Tribunal as soon as the company became aware of them. But Ms Harney, in appointing an authorised officer to two Dunnes companies, appeared to want to go over the same ground as that tribunal.

He said the Minister's authorised officer, despite months of co-operation by the company in various inquiries, had given Dunnes just 48 hours to produce extensive documents relating to the company's affairs over 10 years.

Mr Hardiman said he had "grave suspicions" about the Minister's opinion that an authorised officer was necessary. The documents sought by the officer were much too broad to be warranted by any specific suspicion.

Mr Hardiman was making submissions on the second day of a challenge by two Dunnes companies - Dunnes Stores Ireland and Dunnes Stores (Ilac Centre) Ltd and Mrs Margaret Heffernan - to the appointment of an authorised officer, Mr George Moloney, under the Companies Act 1990. The Tanaiste sought the appointment of the officer after investigations carried out in the wake of the McCracken report on payments to politicians. Those investigations involved Guinness & Mahon Bank, which held the Ansbacher deposits, Celtic Helicopters, the company operated by Mr Ciaran Haughey, son of the former Taoiseach, Mr Charles Haughey, and Garuda, a company in which a former minister, Mr Michael Lowry, was involved.

Both companies are seeking an order quashing the appointment of the authorised officer. In an affidavit read to the court, Mr Paul Appleby, principal officer in the Department of Enterprise and Employment, said the authorised officer to Guinness & Mahon, Mr Gerard Ryan (who last August replaced Mr Moloney as authorised officer to the Dunnes companies) had written to Dunnes last May saying he had become aware since the McCracken Tribunal of a payment of £282,500 sterling made by a cheque drawn on Dunnes Stores (Bangor) Ltd in or around May 20th, 1987, in favour of Tripleplan Ltd.

Mr Appleby said that although the Tanaiste was advised there was no requirement to give reasons for the exercise of a power under Section 19 of the Companies Act, it had come to her knowledge that further substantial payments were made by companies within the Dunnes Stores Group in January 1987 and November 1992 in circumstances which strongly suggested there was no commercial justification for making those payments, and these had characteristics similar to payments which were investigated by the McCracken Tribunal. Mr Hardiman said the appointment of the authorised officer last July had come like a bolt out of the blue. Within days of the appointment, Dunnes was given just 48 hours to comply with an extensive demand for documents.

He said Dunnes had been co-operating with various inquiries and had disclosed large numbers of documents. Serious damage was inflicted on the company with the application for the authorised officer. Mrs Heffernan was shocked and appalled and sought reasons from the Minister and asked to meet her, but a meeting was refused and no reasons were given.

Counsel said that among the documents sought by the authorised officer was a confidential report by Price Waterhouse which was a privileged document which had previously been given, under agreed terms, to an inquiry by Judge Gerard Buchanan into the company, and also to two other inquiries.

Financial documents and memos of internal phone conversations were also among the documents sought.

He said Dunnes had asserted privilege in relation to the Price Waterhouse report in the present proceedings. In seeking the report, the Minister and her authorised officer were acting in total disregard of Section 23 of the Companies Act. On the same day the demand for the document was made, Dunnes had sent a letter asking for reasons for the appointment. But none was forthcoming, he said. The Minister had effectively said she was entitled to do what she did and did not have to give reasons. Was that sort of conduct acceptable under the Freedom of Information Act and in accordance with fair procedures and natural justice, he asked.

The hearing before Ms Justice Laffoy resumes on Tuesday.