Difficult to locate €56m in Custom House Capital's client funds, court told

A collapsed investment firm’s failure to maintain proper accounts has made it difficult, and in some cases impossible, to determine where €56m in misappropriated client funds has gone, the High Court has heard.

Custom House Capital (CHC) was liquidated in 2011 after a High Court-appointed investigation by two Central Bank inspectors found the “systemic and deliberate misuse” of clients’ money, the majority of which represented transfers to syndicated property investments.

CHC liquidator Kieran Wallace has asked the High Court to disqualify three directors from holding directorships, or alternatively orders restricting their involvement in business.

They are CEO Harry Cassidy, who was also a director until July 2011, investment director John Whyte and non-executive director John Mulholland, both of whom were directors from 2001 until the liquidation.

The court heard Mr Cassidy was not represented and had written saying he would not be participating in the case and was not contesting the evidence of the liquidator.

Mr Whyte is opposing the application.

Martin Hayden, counsel for Mr Mulholland, said his client accepted he had failed in his corporate responsibility and had expressed his sorrow for what happened.

However, he asked the court to impose a restriction order rather than disqualify him.

Opening the case, Bernard Dunleavy, for the liquidator, said the liquidation arose out of findings in the inspectors’ report which had not been challenged by any of the three.

The liquidator had decided it was an appropriate matter to seek their disqualification from directorships for a number of years.

The hearing continues.