Investors sued over €18m debt

Bank of Scotland has launched proceedings against a number of investors who were signed up to mortgages by an accountant that they had given power of attorney to as part of an investment vehicle.

A group of more than 80 investors owe almost €18m to Bank of Scotland after signing over power of attorney to Alan Hynes.

It is believed that proceedings have been issued against around 60 of the investors.

Medics, dentists, business people and retirees all signed over the power of attorney to Mr Hynes when they placed money into a property investment fund called Tuskar Asset Management.

Over the last month Bank of Scotland have begun issuing debt enforcement proceeding against investors.

A spokesperson for the bank said that it would not be making a comment.

Tuskar Asset Management (TAM) plc group went in to liquidation in 2009 owing around €50m to banks. However, Mr Hynes had used the power of attorney signed over by the investors to sign them up as personal guarantors on loans that TAM was using to fund property investments.

Last year Mr Hynes was found unfit to be a company director for his role in the management of Tuskar Asset Management and barred from acting as a company director for three years in the High Court.

Ms Justice Elizabeth Dunne said in her judgment: “The applicant has described as particularly striking the fact that the company obtained a power of attorney from those investors to enter into guarantees for the banking debts of the company to Bank of Scotland (Ireland). It was the applicant’s view that the investors may not have fully understood the significance of this and they have been left with significant liabilities as a result of what he describes as ‘this most unusual practice’.”

Separately Ms Justice Dunne found Mr Hynes could not explain where more than €3m of shareholder funds had gone.

“I am satisfied that Mr Hynes has not accounted for shareholder funds to the tune of €3.1m. This is a matter of great concern and, in my view, demonstrates a lack of integrity on the part of Mr Hynes in relation to the failure to account for shareholder funds.”

Mr Hynes is due to appear before the Chartered Accountant Regulatory Board on Feb 4 for his role in Tuskar Asset Management.