A former director of the Central Bank was an underwriting member of LLoyds and had protected himself against possible bankruptcy with an offshore trust through Guinness & Mahon, the Moriarty tribunal was told.
Mr Kenneth O'Reilly-Hyland, a director of the Central Bank from 1973 to 1983, said that before he took up the directorship he had informed the then minister for finance, Mr George Colley, that as an underwriting member of Lloyds he had total exposure and protected this by an offshore trust.
During earlier evidence, the tribunal was told that Mr O'Reilly-Hyland, according to a Guinness & Mahon document in 1978, had a loan of £426,467 and £230,000 on deposit in a Cayman trust company.
Yesterday Mr Jerry Healy SC, for the tribunal, said that in the course of carrying out an inspection at Guinness & Mahon in 1978, Central Bank inspectors made a list of Guinness & Mahon loans secured by what they described as deposits held in Cayman/Guernsey trust companies.
"They identified loans in your name secured as they put it by deposits in the Cayman Islands," Mr Healy said. In the report, certain misgivings had been expressed by the Central Bank concerning activities including the backing of Guinness & Mahon loans by deposits in Cayman/Guernsey.
Mr O'Reilly-Hyland said he was not made aware of these misgivings by anybody in the Central Bank or Guinness & Mahon.
Counsel asked what he told Mr Colley.
"I explained quite clearly what my commercial situation was and as an active underwriting member of Lloyds I had a total exposure and I had protected this by a trust, an off-shore trust," Mr O'Reilly-Hyland said. Mr Healy asked in what way he thought that was relevant to his position as director of the Central Bank.
"Well, supposing Lloyds had made me bankrupt, that would have had a very bad effect on the Central Bank and I thought my duty was to tell the minister that I had a certain exposure and I had protected my family and possibly myself against bankruptcy," Mr O'Reill-Hyland said.
Counsel said Mr O'Reilly-Hyland was telling the minister he need not be concerned that his (O'Reilly-Hyland's) involvement in Lloyds could expose him to ruin or bankruptcy. It was not because he had an offshore trust that he was informing the minister of the nature of that trust.
"No, the comment about the trust arose out of the underwriting exposure," he said.
Mr Healy asked if he thought he would have preferred to have been made aware at the time that the Central Bank had expressed misgivings. "I think I should have been informed immediately," said Mr O'Reilly-Hyland.