Gallagher loan an 'honest mistake'

 

Presidential front-runner Seán Gallagher has described his receipt of a large loan that breached company law as "an honest mistake".

The Irish Times reported today  that he was paid a loan of over €82,000 by one of his companies in 2009. The presidential candidate said last night the matter was brought to his attention by his accountants in 2010 and the money has been repaid.

"It was an accounting procedure really in terms of which account the money went into," he told RTÉ's Morning Ireland today.

"Once the error was spotted by my accountants, who I spoke to at length last night, they brought it to my attention and within four weeks, the money was moved into the correct account. There is no breach in this case," he added.

Illegal loans to company directors was highlighted by the Director of Corporate Enforcement, Paul Appleby, in May 2009 and an amendment to the Companies Act in July 2009 made it easier to prosecute such offences.

Directors who permit or authorise such loans can, on indictment, be liable for a fine of up to €12,700, or up to five years in jail, or both. However, in most instances prosecutions are not proceeded with if the loans are repaid.

Accounts for a company owned by Mr Gallagher, Beach House Training and Consulting Ltd, show he had an €82,829 interest free loan from the company at the end of December 2009. The accounts for the company at that date, show it had net assets of €114,320.

Beach House Training was incorporated in November 2008 and its only set of filed accounts are for the period from then to the end of 2009. The directors are Mr Gallagher and his wife. The company is used by Mr Gallagher to charge for personal speaking engagements and to manage an investment he made as part of the Dragon’s Den programme.

The accounts show an issued share capital of €100 and accumulated profits of €114,220. Creditors include the State, with €17,503 being owed in corporation tax and €25,174 being owed in Vat at year’s end.

The company’s accounts were approved by the its directors on August 5th, 2010, and make no mention of the loan having been paid off at that date.

Mr Gallagher also commented this morning on his role in a Fianna Fáil corporate fund raising event for former taoiseach Brian Cowen in Dundalk in 2008. The Independent candidate said he personally invited a number of friends to the event at which donors were asked to donate up to €5,000.

Mr Gallagher said the event was not organised by him but that he was asked by Fianna Fáil headquarters to mention it to local business people.

"I sought no money, I received no money from anybody. That was dealt with by [Fianna Fáil] headquarters," he said. "While I attended the event, I was not asked for money. I made no contribution myself either in a personal capacity or as a corporate donation either before the event, during the event or after the event."

Asked about Fianna Fáil meeting he attended in support of Dara Calleary last February, Mr Gallagher said he was invited - as a member of the Dragon's Den panel - to speak about the economy, community spirit, and opportunities in business.

"He asked me to attend, not to speak in a political capacity, but to speak about the economy," he said. "I stated quite clearly that I am an Independent. I don't think there's anybody that can dispute that. I've stated that I'm not a member of the party and this ongoing attempt to demonise members of a grass-roots voluntary organisation I think is a retrograde step.

"We should be encouraging more people to get involved."

The latest reports were part of "ongoing negative campaigning ... which I refuse to get into", he said. "I am really sad that this campaign continues to focus on negative campaigning all the time and I think the public are tired of it."