Overdraft in excess of £250,000 was cleared overnight

An overdraft of more than £250,000 on an account held by Mr Charles J. Haughey was cleared overnight, the Moriarty tribunal heard yesterday.

Ms Sandra Kells, financial director of Guinness & Mahon, said that Mr Haughey's resident current account with the bank was overdrawn by £261,824.96 on May 28th, 1987.

The following day two transactions took place. Interest of £21,055.77 was applied to the account and a sum of £285,000 was lodged in it.

The credit balance of £2,119.27 was drawn in cash on June 9th, 1987, when the account was also closed.

Records of Mr Haughey's account, which was numbered 28500/01/50, date back to July 1976. In 1983, when the bank updated its records, the account was given a new number of 03356000, which it kept until it was closed.

Ms Kells described the paper trail between a £282,500 sterling lodgment in an Ansbacher account in Guinness & Mahon in London and the clearance, within 24 hours, of Mr Haughey's overdraft.

She produced documents to show that, on May 28th, 1987, the lodgment was made to an account belonging to Guinness & Mahon Cayman Trust Ltd in London. A £15 charge for express clearance of the cheque was debited to an Ansbacher general account.

The next day the lodgment was broken into two sums of £260,000 sterling and £22,500 sterling. These were converted, through Guinness & Mahon's Nostro currency exchange account, into the Irish pound equivalent of £309,220.29.

Of this, £285,000 was withdrawn on the same day and credited to Mr Haughey's account. The remainder was withdrawn in cash from an Amiens Investment account at Guinness & Mahon operated by the late Mr Des Traynor.

Further documents showed that two days before the overdraft was cleared Guinness & Mahon carried out a foreign exchange deal on behalf of the Cayman bank. A total of £260,000 sterling was converted into £284,492.02 and lodged in the Amiens account.

Ms Kells said this suggested that the lodgment on May 28th, which had arrived by order of the Ulster Bank, was expected. "It would indicate somebody knew the money was coming."

She also detailed Mr Traynor's history with Guinness & Mahon and the company's Cayman Trust branch.

A former director and deputy chairman of the Dublin bank, Mr Traynor moved on May 2nd, 1986, to Cement Roadstone Ltd, where he served as chairman until his death on May 11th, 1994.

Mr Traynor's secretary and personal assistant, Ms Joan Williams, moved with him to Cement Roadstone.

Ms Kells said that Guinness and Mahon Cayman Trust Ltd initially operated as a small investment company, but in 1974 began operating as a trust management company and class A licensed bank.

It was sold in May 1988 to a consortium of Mr Traynor, the late Mr John Furze and Mr John Collins. They, in turn, sold a 75 per cent interest to Henry Ansbacher & Co and the bank's name was changed to Ansbacher Cayman Ltd.

Mr Traynor served as chief executive of the bank from 1984 until his death.

Ms Kells said that by 1989 deposits of £38 million from the Cayman bank had been placed with Guinness & Mahon in Dublin. The deposits were held in different currencies, but primarily sterling and US dollars.

Ms Kells said that, while Mr Traynor had primary responsibility for the Cayman accounts, he was assisted by Mr Padraig Collery. She said that after 1986, when Mr Traynor left the bank, "Padraig Collery would have continued to work and provide similar duties as he had previous to Mr Traynor's resignation in relation to those deposits".

Apart from the Ansbacher accounts, Mr Traynor controlled a number of other accounts at Guinness & Mahon, including those for Amiens Investments Ltd and Kenfort Securities Ltd. Ms Kells said that very substantial sums had been lodged and withdrawn from these accounts, with most lodgments made by cheque, but some by cash.