Phelan is accused of underpaying farmers

Farmers who sold cattle to several Master Meat firms in the 1980s were defrauded through under-declarations of weights, with consequent underpayments, it was claimed at the High Court yesterday.

Mr Paschal Phelan, who founded Master Meats, has suggested this constituted an isolated incident of which he knew nothing, but there will be evidence from witnesses that there was systematic defrauding of farmers, Mr Paul Gallagher SC, acting for Master Meat companies, said.

Counsel said Mr Kevin Phelan, a brother of Mr Paschal Phelan, would tell the court of several means by which farmers who sold cattle to the Omagh Master Meats plant were defrauded. The court would also hear heifers were put into EU intervention as steers, which were more valuable.

Mr Gallagher was continuing his opening of an action by several Master Meat firms against Mr Phelan - who sold his share in the Master Meat companies in 1988 - and Master Cut Foods Limited. The action is one of a number involving Mr Phelan, Mr Larry Goodman (who has admitted for the purpose of the proceedings he controlled Master Meats since 1988) and others, which are being heard by Mr Justice Murphy.

The hearing of the various actions entered its 40th day yesterday and is expected to last several months.

In the action taken by the Master Meat companies, they are seeking £15 million (€19 million) including interest from Mr Phelan for alleged fraud, misappropriation and irregularities at the companies between 1985 and September 16th, 1988, when Mr Phelan disposed of his shareholding in them. Mr Phelan has denied the allegations.

Yesterday, Mr Gallagher said the claim by his clients encompassed the misappropriation of dividends totalling £993,000 from two Master Meat companies - Master Trade Exports Limited and Master Meat Packers Exports - on November 24th, 1987.

Mr Gallagher said his side was also alleging there was misappropriation of insurance premiums relating to the Master Meat firms. This was another example of the "depredation" of the Master Meat companies' accounts, Mr Gallagher said.

The hearing continues today.