A businessman, Mr Harry Crosbie, yesterday attended before the Master of the High Court for examination about the affairs of Eastland Warehousing Ltd, a company which is alleged to have misappropriated funds and to owe the Revenue more than £1 million pounds.
Eastland, in voluntary liquidation, was one of a number of tenants in property at North Wall Quay, Dublin, owned by HJS Ltd, a company in which Mr Crosbie was, until 1995, one of three directors and a 50 per cent shareholder.
The other directors and shareholders were Mr John McDonnell, Rathbeale Crescent, Swords, Co Dublin, and the late Mr Joseph McNamara, Clonkeen Crescent, Kill O' The Grange, Dun Laoghaire.
In April 1998 the High Court granted orders to the liquidators against the two Eastland directors, Mr McDonnell and Mr McNamara, and against HJS Ltd restraining them from reducing their assets in this jurisdiction below £2 million and their shares in HJS below £2 million.
In an affidavit, one of the liquidators, Mr Tom Kavanagh, said Eastland, which operated a bonded warehouse in which alcoholic drink was stored, appeared to have retained for its own use and/or misappropriated to itself or through its directors very significant sums of money. The High Court order was later varied to facilitate the sale of the warehouse.
When he appeared before the Master of the High Court yesterday, Mr Crosbie was asked by Mr James Connolly SC, for the liquidator, about two cheques, one dated November 24th, 1992, for £100,000 and the second dated November 30th, 1992, for £25,000 drawn on the First National Building Society and payable to Mr Crosbie.
Mr Crosbie said he was paid £125,000 from HJS Ltd for putting a one-off deal together relating to acquisition of a site which included a warehouse rented by HJS to Eastland. He had negotiated the deal for the site and personally guaranteed the money.
Mr Connolly said the liquidator had nothing relating to a finder's fee or consultancy fee for Mr Crosbie. Mr Crosbie said he was sure there was a document and he had offered to meet the receiver and could not have done any more to be helpful to him.
Asked if there was a receipt for £125,000, Mr Crosbie said he did not personally collect cheques. Agents did this.
Mr Connolly said it had emerged the cheques were not put through the books of Eastland. Mr Crosbie said he knew that now. He could not remember if VAT had arisen.
Earlier, he said he first met Mr McNamara and Mr McDonnell in 1989 and had agreed to rent them one of his warehouses. They had later set up Eastland.
Mr Crosbie said the site was later acquired under a compulsory purchase order. He undertook to find alternative premises and heard another site was for sale. He subsequently agreed "unfortunately and stupidly" to take Mr McDonnell and Mr McNamara as partners, and HJS Ltd was set up in 1992 in which he had a 50 per cent share and they each held 25 per cent.
He personally did the deal for the second site which was bought for £465,000.
Mr Connolly put it to Mr Crosbie that in the loan application to the building society, Mr Crosbie had said he wanted £465,000 but indicated the purchase price was £610,000. Mr Crosbie said he would not do that and did not remember it. He got 100 per cent of the purchase price and thought he put up £45,000 deposit because the deposit was normally 10 per cent of the price.
Mr Connolly said it appeared Mr Crosbie put up £35,000 deposit for his half-share which tended to indicate a purchase price of £700,000.
Mr Crosbie said he paid a deposit between £35,000 and £45,000: he thought it was £45,000. HJS later paid him back, by cheque.
Mr Crosbie said it was agreed he would get a small building on the site, referred to by the liquidator as the bakehouse, for himself. It had never belonged to HJS. HJS acquired the warehouse, and he got the bakehouse for £1. The bakehouse was sold, he thought, about 2 1/2 years later, to HJS for £65,000.
He had finished business with HJS in 1995. He wanted to get out. He had realised Mr McDonnell and Mr McNamara should not be his partners. They were incompetent but he never thought they would be so stupid as to mess with the Revenue Commissioners' money.
In 1995 he had sold his shareholding in HJS for £85,000. He was getting £190,000 overall to walk away from the deal. There was nothing hidden.