Developers Michael and Thomas Bailey are hoping to provide consultancy services to a number of their companies following the formal coming into effect today of orders disqualifying them from involvement in the management of any company for a seven-year period, the High Court has heard.
Ms Justice Mary Finlay Geoghegan stressed any consultancy arrangement involving the brothers and the companies must be "genuine".
She was using the term genuine “advisedly” in that there must be a genuine consultancy contract where other persons were genuinely responsible for the direction and management of the companies, she said.
A board of directors consisting only of non-executive directors may not be a board which the court could consider adequate in circumstances where the Baileys had been managing directors of the companies, she added.
If the Baileys wanted to make an application later concerning any consultancy contract that they believed did not breach the disqualification orders, they could do so, the judge also indicated.
Earlier, Michael Cush SC, for the Baileys, indicated their concern was to be able to earn a livelihood, but they were anxious not to engage in any activity that might be interpreted as a breach of the disqualification orders.
They were "looking over their shoulders" at the National Assets Management Agency, he added. The brothers' company, Bovale Developments, has been in Nama since 2010.
The proposed services were for the development of the companies, would be to the advantage of Nama and had been requested by the independent boards of the companies, counsel added.
Denis McDonald SC, for the Office of the Director of Corporate Enforcement (ODCE), said the range of services proposed included mandatory services for each aspect of the business of the companies. It was for disqualified persons to seek their own legal advice on what they could or could not do, he added.
The judge today formally lifted a stay imposed last December on the coming into effect of the disqualification orders, made by the judge in December under Section 160 of the Companies Act.
The lifting of the stay means the orders come immediately into effect, but the brothers are conditionally permitted to deal with matters concerning a number of companies up to September 30th next.
The conditions require that two additional directors should be appointed to the relevant companies and that the Baileys must give the Director of Corporate Enforcement proof of those appointments.
The judge added she could not give advice in relation to any consultancy services the Baileys might provide beyond saying any consultancy arrangements must be genuine.
Last December, the judge ruled the brothers should be disqualified from acting as company directors for seven years over “particularly serious” misconduct and fraud in the conduct of the affairs of their company, Bovale Developments. The fraud included understating their gross remuneration over a two-year period by some €6 million.
The disqualification orders were stayed so the brothers could continue to co-operate with Nama concerning Bovale.
The brothers did not dispute that evidence presented by the ODCE was enough to show they, as directors of Bovale, were guilty of a fraud in relation to Bovale and the Revenue over two years to the end of June 1998. They acknowledged and apologised for the misconduct, said they had “learned from their mistakes” and intended to set matters right.