U2's Clayton sues bank and accountants over missing €4m

Sat, Jul 3, 2010, 01:00

U2 GUITARIST Adam Clayton has sued his bankers and accountants for negligence arising from claims his former personal assistant Carol Hawkins misappropriated more than €4 million from his bank accounts over five years up to November 2009.

Mr Clayton claims his accountants had assured him in September 2008 the sum misappropriated was about €13,585 when at that stage it was about €4.4 million. He also claims, after Ms Hawkins allegedly admitted misappropriating what she said was about €15,000 in September 2008 as a result of what she said was great stress from a marriage break-up, and as his accountants assured him it was €13,585, he had kept her in his employment but also instructed his accountants to ensure she would not have access to his accounts.

However, she had misappropriated a further €415,961 between October 2008 and November 2009 by means of Laser cash withdrawals of €715.38 a day, it is alleged.

Mr Clayton, Danesmoate Demesne, Kellystown Road, Rathfarnham, Dublin, is now suing Bank of Ireland Private Banking Ltd (BOIPB) and Gaby Smyth, Jill Percival and Pat Cleary, practising as Gaby Smyth Co, chartered accountants, Merrion Road, Ballsbridge, Dublin.

Mr Clayton brought earlier separate proceedings against Ms Hawkins over the alleged misappropriation. In those proceedings, it is claimed an apartment had been bought in New York and an investigation had also revealed some €900 per month was spent on a syndicate which maintained horses.

In the latest case, he is claiming €4.38 million damages against the bank for alleged negligence, breach of duty and breach of contract and is claiming €4.8 million damages against the accountants for negligence, breach of contract and negligent misstatement arising from allegedly failing to detect the alleged extent of the misappropriation.

Mr Clayton claims the Smyth firm had reported to him in September 2008 the total sum misappropriated by Ms Hawkins was €13,585 when in fact the total sum misappropriated between July 2004 and September 2008 “is now known to exceed €4 million”.

The proceedings by Mr Clayton are due before the Commercial Court on Monday when lawyers will apply to have them fast-tracked in that court, the big business division of the High Court.

Mr Clayton claims he operated a number of different bank and credit card accounts with BOIPB between June 2004 and November 2009 and had in 2001 appointed Gaby Smyth as his personal accountant, business adviser and tax agent for the purpose of improving the quality and frequency of financial reporting of his financial and business affairs.

He claims, when the Smyth firm was appointed, Ms Hawkins, Crannagh Road, Dublin, whom he had employed since 1992, was responsible for maintaining records of the Clayton household and was a signatory on his bank accounts with BOIPB with authority to sign cheques, make withdrawals and direct transfers of money between his accounts in BOIPB.

He claims Ms Hawkins’s duties in that regard had been overseen by his previous accountants.

He claims, between at the latest 2004 and September 2008, Ms Hawkins had fraudulently misappropriated more than €4 million from his accounts and the defendants failed to prevent this.

He claims Ms Hawkins disclosed to him in September 2008 she had misappropriated some €15,000 after which he instructed the accountants to conduct a detailed and thorough investigation of the accounts.

He claims the Smyth firm reported to him in September 2008 they had conducted a review and reconciliation of his accounts and statements and advised the total misappropriated by Ms Hawkins was €13,585.19.

In fact, the total sum was more than €4 million and had he known that, he would not have retained Ms Hawkins in his employment, Mr Clayton claims.

He said he had then instructed the accountants to put in place a new financial management system so Ms Hawkins would not have access to his accounts. He claims he was told that had been done and Ms Hawkins was to be replaced by Gaby Smyth as the sole signatory on his accounts.