Expert witness claims he was intimidated by Anglo official

A FINANCIAL expert was warned of “dire consequences” for himself by an official of Anglo Irish Bank if he provided evidence for a businessman in proceedings alleging fraudulent misrepresentation and concealment by Anglo and another company relating to an investment fund for two hotels in New York, it has been claimed at the Commercial Court.

Anglo has strongly denied the claims of intimidation of expert Tom Barry, a former head of corporate banking with AIB, made in proceedings brought against it by businessman Gerard McCaughey.

It is alleged an Anglo official told Mr Barry a substantial judgment obtained by the bank against Mr Barry over property dealings he had in London was currently in the “bottom drawer” but, if Mr Barry submitted an expert witness statement for Mr McCaughey, it was likely the judgment would come out of the bottom drawer and Mr Barry’s name “would be appearing in the papers tomorrow”.

At the Commercial Court Mr Justice Peter Kelly described the claims as very serious. He noted the bank, while denying the claims, had also acknowledged, if true, they amounted to a claim of criminal conduct by the bank. The judge said the alleged conduct was also arguably a contempt of court.

He has adjourned the proceedings to January 11 to allow Anglo and a named official respond to the matter. He also allowed more time to Mr McCaughey to have another expert provide a witness statement.

Mr McCaughey, with addresses at Sandymount, Dublin, and Manhattan Beach, California, is among 24 investors suing Anglo in relation to the hotels investment fund. His action is being treated as a test or “pathfinder” case.

His side was to have submitted an expert witness statement by December 13 last, but his lawyers applied to Mr Justice Kelly this week for an extension.

Mr McCaughey’s action is against Anglo and Mainland Ventures Corporation (MVC), Delaware based and wholly owned by Anglo, over investments in the Anglo Irish New York Hotel Fund, a private equity investment in which some 50 high net worth Irish based individuals invested an average $1 million (€763,000) each in 2006. Both defendants are being sued by investors for $23m over alleged fraudulent and/or reckless concealment and/or misprepresentation concerning the fund, set up to purchase and renovate the Beekman Tower Hotel and Eastgate Tower Hotel in Manhattan. The claims are denied.