Enforcer cleared to use PwC probe in Bovale case

THE High Court has ruled that the Director of Corporate Enforcement is entitled to rely on an investigation by accountants PriceWaterhouseCoopers (PWC) into the affairs of Bovale Developments Ltd over a two year period in his bid to have developer brothers Michael and Thomas Bailey disqualified from managing any company on grounds of alleged misconduct and fraud in relation to the affairs of Bovale.

However, Ms Justice Mary Irvine also held the Director is not legally entitled to use certain other materials, including reports of the planning tribunal, as additional evidence of wrongdoing by the brothers or evidence of alleged wrongdoing over a 12 year period from 1988 to 2000.

The judge further ruled that a District Court production order issued under Section 63 of the Criminal Justice Act 1994, under which certain documents relating to the Bovale companies were seized by gardaí from certain financial institutions in 2002, was invalid.

There had to be an investigation into whether a person had benefited from an offence to justify a production order and there was no such investigation when the order was made in November 2002, the judge said.

A production order could not be secured for the purpose of prosecuting an alleged offence of fraudulent trading.

The consequences of that finding of invalidity will not be determined until a later stage but the Baileys have claimed PWC relied on the unlawfully seized documents in its report.

Ms Justice Irvine was delivering her lengthy reserved judgement on the brothers’ preliminary application to have certain documents excluded from the forthcoming disqualification proceedings, brought under Section 160 of the Companies Act against Mr Thomas Bailey, Coolcommon, Batterstown, Co Meath and Mr Michael Bailey, Killamonan House, The Ward, Co Meath.

The Director claims the reports from PWC and the planning tribunal, in addition to a €22 million settlement by the company with the Revenue Commissioners, made clear the alleged misconduct was of a very serious character.

The judge adjourned the proceedings for two weeks to allow the sides to consider her decision. The issue of who will pay the costs of the four day hearing of the preliminary application will also be decided then.