Investors claim they lost €2.4m over land deal

A PROPERTY investment in Sligo allegedly promoted by an accountant and involving former EU Commissioner Ray MacSharry and others is at the centre of a Commercial Court action which opened yesterday.

Arthur, Kieran and John Grady and their company claim they suffered losses of over €2.4 million because of allegedly fraudulent claims by accountant Kenneth McMoreland and quantity surveyor Jack McMahon concerning the 2006 purchase of the Saehan site by Foresthaze Developments Ltd, of which Mr MacSharry was chairman.

Their counsel Michael Cush SC said a sale and sub-sale arrangement in which the site was purchased in April 2006 in trust for Mr McMoreland and Mr McMahon for €9.85m and then purchased six months later by Foresthaze for €11.5m was withheld from the Gradys. If they knew of that, they would not have invested, he said.

Mr McMoreland last year secured orders joining seven people — Ray MacSharry Sr, Alcantar, Pearse Road, Sligo; Ray MacSharry Jr, Weston House, Johnstown, Naas, Co Kildare; Marc MacSharry, Fatima, Pearse Road, Sligo; Gerard Healy c/o Kevinsfort Ltd, Castle Street, Sligo; Damien Torsney, Merrion Road, Ballsbridge, Dublin 4; and Edward Donaghy and Jacqueline Donaghy, Castletown, Drumcliffe, Co Sligo — as third parties.

Mr Justice Sean Ryan has begun hearing the Gradys’ action against Mr McMoreland, Mailcoach Road, Sligo, formerly of Gilroy Gannon accountants; others practicising as Gilroy Gannon accountants, Stephen Street, Sligo; Jackie McMahon, Creggconell, Rosses Point, Co Sligo, and Foresthaze, Millbrook, Riverside, Sligo.

The Gradys claim a gain from the alleged sub-sale was retained by Mr McMoreland and Mr McMahon and are claiming damages against both men, plus an indemnity against claims made under guarantees for €1m in favour of Foresthaze provided by them to AIB.

Mr Cush said the Saehan project was first put to Arthur Grady by Mr McMoreland in April 2006.

The Gradys contended they were told at a meeting in Gilroy Gannon on September 11, 2006, the price for the site was €11.5m, there was a €13.95m valuation from Lisney’s and at least 300 houses would be involved.

The Gradys “took comfort” from the MacSharry involvement, counsel said.

Counsel claimed that the property had actually been bought in trust by Mr McMoreland and Mr McMahon for €9.85m.

Mr McMoreland claims a contract to buy the site for €9.85m was entered into between Saehan and a solicitor acting for himself and Mr McMahon in April 2006 because Foresthaze was not incorporated until July 2006. Foresthaze acquired the site for €11.5 million in October 2006, he claims.

Mr McMoreland denies fraudulent misrepresentation or other wrongdoing.

He claims the promoters of the scheme were Ray MacSharry Sr, Marc MacSharry, himself and Mr McMahon. He also claims the net uplift from the sub-sale was credited to Foresthaze and it was agreed the promoters would not derive any benefit from it.