Tribunal hears of AIB’s high regard for O’Callaghan

SENIOR executives in Allied Irish Bank regarded Cork-based businessman Owen O’Callaghan as the ideal person to drive the Quarryvale development in west Dublin in the early 1990s, the Mahon Tribunal heard yesterday.

An AIB file note relating to the August/September 1992 period enthused: “[Owen] O’Callaghan is probably the most respected and capable shopping centre developer in Ireland. The company has completed five shopping centres over recent years. All... have proved successful.” While AIB was singing Mr O’Callaghan’s praises, his business partner in the venture — Luton-based Sligo-born Tom Gilmartin — was embroiled in financial difficulties that would lead to his being declared bankrupt by the British authorities.

The bank has rejected Mr Gilmartin’s claim it colluded with Mr O’Callaghan to take over the west Dublin project. Mr O’Callaghan also denies the allegation.

Michael O’Farrell, senior manager of the property and construction team in AIB’s corporate and commercial banking division, told the tribunal the bank had been exposed for £14.5 million on the Quarryvale project in the early 1990s.

He said Mr O’Callaghan had agreed to act as the Quarryvale project manager and a bank memo recorded how he “and a team of people are actively lobbying councillors. They are optimistic that they will achieve a majority”. Mr O’Farrell explained the bank’s role as that of a “middleman” between Mr Gilmartin and Mr O’Callaghan.

Both partners each held 40% in the project, with the bank’s stake at 20%. “Tom Gilmartin never really appreciated that without Mr O’Callaghan’s involvement, we in the bank could have called in the loans and Mr Gilmartin could have lost everything.” Mr O’Farrell rejected as “absolutely untrue” a suggestion Quarryvale lobbyist Frank Dunlop’s Shefran company was used to conceal the lobbyist’s involvement from the bank.

When asked whether he did not find it strange that two entities should be used by Mr Dunlop to claim fees, Mr O’Farrell said Shefran was known to him to be a Frank Dunlop company.

Asked if the use of Shefran to claim fees had presented a difficulty for the bank, Mr O’Farrell replied: “I have no recollection of it ever arising. Our focus was on the amount of the fees. We were aware Shefran and Frank Dunlop were one and the same and how he treated his accounts was a matter for himself.” Mr O’Farrell said he did not recall raising queries with Mr O’Callaghan when facilities were sought to draw down about £215,000 in 1992.

It comprised of £100,000 Mr O’Callaghan said he had already spent regarding Quarryvale. Mr Dunlop had received most of the remainder in fees.