Cunningham rejoins subprime firm as director

Moneylender Ted Cunningham, who is facing a second trial on laundering charges, has rejoined his troubled subprime loan company as a director.

He has said he is determined to chase money that Chesterton Finance is still owed from borrowers in order to repay private investors who had initially funded his operation.

He was re-appointed as a director in September, having left the firm in 2009 when he was jailed.

Mr Cunningham said he disputes the view of his co-director and former business partner, Phil Flynn, who believes the loans are too difficult to recover and Chesterton should be liquidated. The company owes €8m, but it has less than €1.7m in debts to chase.

Mr Cunningham also believes the firm’s auditor was wrong to report that, in his opinion, Chesterton Finance had broken company law because it had not been keeping proper books of account prior to 2007.

The auditor, Gerard Browne, said he was not satisfied with the accuracy of the €4m the company said it owed to investors in 2007.

Since 2007 interest due to these investors has seen the total debt owed by Chesterton increase to €7.4m.

“Due to the lack of historical information with certain books and records not available due to confiscation by the CAB [Criminal Assets Bureau], there is insufficient evidence to form an adequate conclusion concerning [Chesterton’s] opening balances brought forward,” the auditor said.

Mr Cunningham, aged 65, of Woodbine Lodge, Farran, Cork, said yesterday that the accuracy of the company accounts had not been a problem for either CAB or the Revenue.

Mr Cunningham was jailed in 2009 for laundering €3m of the proceeds from the Northern Bank robbery.

However, he had his conviction quashed in 2012. This was because the special arrest warrant used to search his home was found to have been unlawful.

He is due to face a second trial on nine outstanding charges.

Chesterton’s 2011 accounts said almost all of the investors and loan clients were involved in ongoing litigation which could cost the company more money.

Mr Flynn, a former vice-president of Sinn Féin, was once the chairman of the Bank of Scotland (Ireland) until he was forced to step down when Mr Cunningham was arrested in 2005.

Chesterton’s accounts for 2011 show that Mr Flynn has been providing it with ongoing financial support to allow it to remain in business.

At that point the directors reported that they planned to put the company into liquidation. This has not happened.

Yesterday, Mr Flynn said he had not spoken to Mr Cunningham since his release from prison and he did not know much about his reappointment as a director at Chesterton.

Mr Flynn said he himself had become a director of Chesterton when Mr Cunningham was jailed in order to help the firm to organise its affairs and recover money it was due from borrowers. He said it had hoped to get a retail credit licence from the Central Bank, but had been turned down.

Mr Flynn said the debts had proved too difficult to chase and he was of the view that the company should be wound up.

He said the concerns raised by the auditor related to the pre-2007 period and the lack of historical records. According to Mr Flynn, the investors in the company, who are reportedly owed €7.4m, had not been contacting Chesterton to seek recovery of their funds.

Mr Cunningham said the money was still owed to these investors and he believed the company should look to get it back from the borrowers.