Lawlor sought to profit £2m from the sale of £4m Czech building

FORMER Fianna Fáil TD Liam Lawlor was involved in a property deal in the Czech Republic three years ago in which he attempted to earn a £2m profit on a building worth just £4m.

The Planning Tribunal heard yesterday that a Czech company controlled by Mr Lawlor called Zatecka also attempted to disguise the ultimate profit on the deal of £835,000 as a loan agreement.

The inquiry was told Mr Lawlor tried to persuade leading Irish property developer Sean Mulryan to invest over £8.1m in buying a six-storey office building in a prime location in central Prague in early 2000.

English solicitor Tony Seddon who acted for Mr Lawlor in relation to the purchase of the Hybernska building by Mr Mulryan, admitted that the former Dáil deputy had "puffed up" values relating to the property. The £8.1m estimate was Mr Lawlor's opening bid which was "almost like an advertising puff," said the solicitor.

Mr Seddon acknowledged that a note referring to a "£2m uplift" in Zatecka documents related to the target profit Mr Lawlor had hoped to obtain from the deal. However, Mr Mulryan who owns the leading Irish building firm, Ballymore Homes, was concerned the £8.1m asking price did not represent the true market value of the Hybernska property. Having obtained an independent valuation on the building, Mr Mulryan eventually paid just over £3.5m to acquire the property less than half the original value placed on it by Mr Lawlor.

The tribunal has heard that, although Mr Lawlor was neither a director or shareholder of the company, he effectively controlled Zatecka.

Although tribunal lawyers suggested the former TD had instructed Mr Seddon to delete all references to his name from a document about the company, Mr Lawlor strongly disputed the fact. In reply, Mr Seddon believed he would have discussed the matter with his client. However, the solicitor was sharply criticised by members of the tribunal over his role in describing £835,000 which Zatecka received from the Hybernska deal as "loan agreements" in the company's accounts.

Questioned by Judge Gerald Keys, Mr Seddon said he could not recall receiving any instructions to treat the payments as a loan agreement. He did not believe he had discussed the matter with Mr Lawlor. However, on that basis, Judge Keys said it appeared that Mr Seddon had made a decision for the company without consulting any of the owners of Zatecka which raised questions about professional standards. The solicitor replied that he didn't believe the issue touched on his professional duties.

In a written statement, Mr Seddon said Mr Lawlor's role in relation to the Hybernska building was "not simply a negotiating agent." "His style was to drive the matter forward as if he were a principal in the transaction."

Asked about the fact that Mr Lawlor had used his legal firm's stationery to issue a false invoice, Mr Seddon remarked that the former TD had apologised to him for producing the document at someone else's request.

"While I appreciated the apology, there are some things you don't easily forgive," said the solicitor. Upon learning of the false invoice last July, Mr Seddon said he informed Mr Lawlor that he had to realise the issue would make a difference to their professional relationship. Mr Seddon disagreed with the suggestion by Mr Lawlor that it was always intended that a Jersey-based lawyer, Nicholas Morgan, would be the beneficial owner of Zatecka. Mr Seddon said he found the exact situation about ownership of the company unclear and confusing.

Mr Lawlor is due to resume his evidence at Dublin Castle this morning.