A Commercial Court action against two former directors of a high-end vehicle import and export company allegedly involved in fraudulent trading has been settled.
The case was brought by liquidator Myles Kirby of Kirby Healy Chartered Accountant against Kieran Sherlock and his wife Helena Sherlock, of Cashel, Cloonloo, Boyle, Co Roscommon, as directors of the company Kleio Tool and Plant Hire Ltd.
Mr Kirby claimed the fraud involved moving money between different entities in diverse jurisdictions.
The claims were strenuously denied, and the Sherlocks claimed they acted with proprietary during their time as directors.
The company, which traded under the name Go Direct, was involved in the import and export of supercars like Rolls-Royce, Lamborghini, Ferrari, Porsche and Range Rover.
Mr Kirby, who was appointed liquidator to Kleio by the High Court in April 2019, claimed the directors were engaged in fraudulent trading and/or significant laundering of monies across multiple jurisdictions.
The case was due to open on Tuesday but following talks Mr Justice Michael Quinn was told on Thursday by John Kennedy SC, with Stephen Brady BL, for Mr Kirby, the matter had been settled. Maura McNally SC, with Ronnie Hudson BL, appeared for the defendants.
The terms of the settlement are confidential but the case was put back to next month to ensure the terms are complied with.
Bank transfers
When the case was entered into the Commercial Court last year, Mr Kirby, in an affidavit, said he uncovered what he said were large sums being passed through company bank accounts which were often then transferred immediately or very quickly out of those accounts to other parties, in particular to a related corporate entity in the UK.
He sought declarations that the Sherlocks were guilty of carrying on business with intent to defraud or that they were knowingly party to the carrying on of company business in a reckless manner.
He wanted orders that they be made personally liable for the company's debts and that they be disqualified from holding directorships for a period the court deems appropriate.
While large amounts of money flowed through the company bank accounts relating to the sale and purchase of the high-end cars, there were no books and records proving the vehicles were ever actually imported or exported, Mr Kirby said.
There was a "wholesale absence" of almost any records while they were directors, he says.
The business apparently involved the importation of vehicles from the UK which meant they availed of zero VAT rating for the purpose of the UK and using firms which had only just been incorporated and subsequently struck off for failing to make returns, he claimed.
The Revenue Commissioners, said Mr Kirby, undertook audits of the company's affairs and discovered serious non-compliance with tax and duty obligations and raised assessments against the company for €2 million.
While the Sherlocks submitted an appeal against the assessment, they never substantiated their appeal, the liquidator said.
Mr Kirby said a core contention by the Sherlocks was that they were replaced as directors in 2018 by a man based outside Birmingham in England.
Mr Kirby did not believe this assertion could withstand any level of scrutiny including that the company effectively ceased trading when they resigned.
While the company was first incorporated in March 2012 with a principal activity of renting demolition/construction equipment, and registered in the names of others, it was clear it did little or no trade prior to the Sherlocks taking over as directors in May 2015, Mr Kirby said.
