The builder, the banks and the housing development gone bad
The man behind the badly built Riverside development in Portarlington managed to secure millions of euro from major financial institutions, writes COLM KEENA, Public Affairs Correspondent
JAMES CLANCY (54), the owner of the company that built a residential development at Riverside, Kilmalogue, Portarlington, Co Laois, was sent to jail last week by Mr Justice Brian McGovern in the High Court. Clancy, of Eagle Rock, Furbo, Co Galway, was sent to Mountjoy Prison for 14 days for contempt. He is due back before the judge on June 1st, when it is expected he will be given an opportunity to be more forthcoming about his financial affairs.
His company, Clanview Construction Ltd, was incorporated in April 2003 and received funding from Anglo Irish Bank in August of that year. The bank took out a charge against land in Portarlington as well in Co Offaly.
In the following year Clancy set up a company called Emmedue, which received finance from ACC Asset Finance for a €3.99 million machine for the manufacture of prefabricated polystyrene houses. Emmedue housed the machine in an industrial unit outside Portarlington and used the technology when building the Riverside development. Astonishingly, the badly built development was to be used to showcase his Emmedue operation, so it could be launched internationally. One hundred jobs were to be created, it was said in 2004 when, as reported by the Laois Nationalist,the idea of establishing the factory was announced at a joint meeting of the Laois and Offaly Fianna Fáil organisations in Portarlington. The factory is now idle.
In July 2009 The Irish Timesreported on a hearing in which ACC Asset Finance sought the enforcement of a judgment order against Clancy. During questioning by Robert Beatty, for ACC, and by the judge, it emerged that Clancy had an interest in 11 portfolios of land, all in Galway. He said he had not had any correspondence nor filed any forms to the Revenue Commissioners since 2005, although he did make “monthly payments”. He said he had had “no income” since 2007 and, when asked by the judge what he was living on, he replied: “I’m living on fumes.”
His companies had bank accounts, but he himself did not have an account that he used for his daily expenses, he said. Despite all this, he appeared to be able to get finance from the banks, and in particular Anglo Irish Bank. He had received loans from Anglo for Clanview Construction. He had “five or six mortgages [with Anglo], maybe more”. He also had mortgages with the Bank of Ireland and the Bank of Scotland (Ireland). Despite his evidence about having no income, he told the judge that Anglo had been paying him a wage up to four months previously. “Clanview is just about finished now,” he said. That was in July. In October 2009, Clanview was placed in receivership by Anglo.
CLANCY’S EVIDENCE ties in with the view of Riverside resident Emmett Dunphy, who believes that Anglo funded the completion of the development during 2008 and 2009, after the property market had collapsed, and then put Clanview into receivership.
The receiver, Paul Keenan, of BDO Simpson Xavier, did not respond to requests for a comment and Anglo Irish Bank did not want to comment on the case.
Presumably the bank believed that completing the development was the least bad option in terms of recouping the money it had advanced to Clancy. However, whether any of the completed units can be sold, given the poor quality of the development overall, must be an open question. It appears that Anglo is not open to funding the replacement of the structural defects in the development.
The strangest evidence given by Clancy last year involved trips to the Middle East. He explained that he had bought a second polystyrene machine in late 2006, for more than €3.6 million, which he had shipped out to Abu Dhabi. He had gone into business there with a Tariq Mohammed, but had been unable to keep up his end of the deal. His partner had seized the machine, he said. The loan for this machine had come from Anglo, Clancy said, and was a personal loan.
“What was happening in relation to repayments?” the judge asked.
“There was nothing happening in respect of the repayments,” Clancy replied. At one stage Anglo was going to give him more money to save the Abu Dhabi business, but changed its mind. “I got quite a lot of money from Anglo for the building business. They were funding my building business. I purchased two to three sites with Anglo,” Clancy said.
He said he had been in the United Arab Emirates “25 to 30 times” in the past three years and four to five times in 2009. He was looking at starting up an apartment-building business with a partner. Asked how he paid for the flights, he said others had paid for them.
It was Clancy’s failure to adequately explain his exploits in the UAE since last year that led to his being jailed for contempt.
A search of the courts.ie website shows that the ACC case is far from the first case Clancy has been involved in. The Corrib Oil Company took a case against Clancy and his company, Bad Arann Teoranta, last year, while ACC and Permanent TSB Finance also took cases against Clancy. The Collector General with the Revenue Commissioners, Gerard Harrahill, took a case against him and Clanview in 2008. Phoenix Developments, which worked on the Riverside development, took a case against Clancy in 2007.
Clancy is still a director of a number of companies, including Bad Arann and Aran Islands Direct. He is also a director of Clantek Future Building Systems Ltd, as Emmedue is now called. The website of the Abu Dhabi- based Elite Holding Group, lists Portarlington-based Clantek as a partner.
It is striking that a man such as Clancy could manage to secure such substantial funding from Anglo Irish Bank and other financial institutions. It has led to substantial losses for those institutions, and great distress for those who bought housing from him in Riverside, Portarlington, at the height of the housing boom.