ADVERTISING EXECUTIVE Stuart Fogarty has been given a two-year suspended sentence for breaching the law on company loans to directors.
Mr Fogarty, who borrowed almost €430,000 from his advertising agency Aubrey Fogarty Associates, was also fined €34,000 by Judge Katherine Delahunty. He pleaded guilty at Dublin Circuit Criminal Court to 13 charges of breaching Sections 31, 40 and 240 of the Companies Act 1990.
Fogarty, of James Place East, Dublin, admitted that being a director of Aubrey Fogarty Associates, he permitted or authorised the company to lend the total sum of €426,338 between September 2003 and December 2005.
The court ordered he be assessed for his suitability for community service in lieu of a two-year prison term. He faces a nine-month sentence if he fails to pay the fine within three months. The court heard Fogarty is not longer a director and a compliance officer has been appointed at the company.
Remy Farrell BL, prosecuting, told the judge that if a director takes a loan from the company exceeding 10 per cent of the net relative assets of the company, it is considered a breach of the Act.
Mr Farrell said Fogarty had pleaded guilty in the District Court in July 2003 to 16 similar offences and donated €3,000 to charity following his conviction, which proved that he was aware he was again in breach of the Act when he committed these additional offences.
Cyril Houlihan, from the Office of the Director of Corporate Enforcement, told Mr Farrell that there was an outstanding director’s loan of €292,000 following Fogarty’s conviction in 1993 and in August 2003 he borrowed further amounts on top of this.
A Garda investigation was launched after the auditor of Aubrey Fogarty Associates Limited contacted the Director of Corporate Enforcement in December 2005 to report the breach of the Act.
Mr Houlihan said documentation provided by the auditor showed that the various amounts taken out in the director’s loan together with the outstanding balance always exceeded 10 per cent of the company’s net assets.
These sums first represented a little over 30 per cent of the net assets but, by January 2005, it had increased to 109 per cent. The sums then decreased and when Fogarty was reported in December 2005, the director’s loan represented 61.9 per cent of Aubrey Fogarty’s net assets.
Fogarty immediately admitted to authorising each and every one of the transactions and said that, as a director of Aubrey Fogarty, he was fully aware he was in breach of the Companies Act.
Mr Houlihan said the loan had been fully repaid according to the company’s 2006 audited accounts and the company was never in jeopardy due to Fogarty’s actions.
Mr Houlihan agreed with defence counsel, Patrick Hunt SC (with Hugh O’Keeffe BL), that Aubrey Fogarty Associates Limited was fully tax compliant and Fogarty had a 99 per cent holding of the company’s shares.
Mr Hunt told the judge his client was no longer managing director of Aubrey Fogarty Associates Limited.
