Were IDA Ireland the Architects of a Criminal Fraud?

In late 1991 the UK directors of Holts decided on a members liquidation. Manufacturing was not as profitable as had been hoped when the factory was moved and there had been a disastrous investment in a Spanish leisure complex. The largest creditors were the directors contracts and the directors were anxious to liquidate while there were sufficient assets remaining.

This left our Belgian company Euromart and its sub-agents in a difficult position.

Over the years we had all spent a great deal of money in promoting the brand. We attended the important trade shows which is an expensive business for a product range requiring so much floor space. We also promoted the amateur game by sponsoring amateur tournaments. Mr. Ray Reardon worked hard for us both at trade shows and giving lessons and encouragement to younger players.

Slowly we built Holts into a well known and highly respected brand.

1992-01-27-frankfurtmesse-pic1 1992-01-27-frankfurtmesse-pic5 1992-01-27-frankfurtmesse-pic11 1992-02-xx-rayreardon-bielefeld-pic1 1992-02-00-rayreardon-bielefeld-4
1992-02-00-rayreardon-bielefeld-5 1992-02-00-rayreardonkreeft-1 1992-02-00-rayreardon-snookermaastricht-1 1992-02-00-rayreardon-snookermaastricht-3  

This brand now falling into the hands of our competitors was not in the interests of Euromart or Gauselmann. Gauselmann feared that Riley would acquire the brand.

The price sought for the manufacturing business and brand was attractive. We first considered having the tables made elsewhere but we all feared the effect this would have on the quality that our reputation was built on. So new premises would be required. The liquidator was prepared to let us stay in the existing factory free of charge in a caretaker capacity until it was sold. We were not to know that it would take nearly 3 years to sell the place.

We looked at several relocation options in Burnley and also Slovakia and in Belgium and as an Irish emigrant I thought of Ireland. I contacted the Irish embassy in Brussels to inquire about the option of a relocation to Ireland.

Enter IDA Ireland

Shortly after we contacted the Embassy Mr. Leonard from IDA Amsterdam arrived down to our business in Hoeselt, he indicated that IDA would be very happy to assist us in moving the factory to Ireland and he went about convincing us that this would be the best opportunity for us as a family and would give me the possibility to be more closely involved with my country of birth. Altogether a very pleasant meeting. Mr. Leonard left with the words “do the right thing Paul, we will back you all the way. We do not take the short term view to these things, we will be there in 3 or 4 years time should you need help, don’t worry we realize the risk you are being asked to take and we will be beside you all the way.”

I prepared an outline of the background and of how a relocation to Ireland would look and sent this to Mr. Leonard in Amsterdam.

Shortly after this Mr. Leonard informed us that my wife and I were invited to lunch at the Irish Ambassador’s residence. At that lunch the Ambassador HE Gearóid Ó Clérigh was also very encouraging and reassuring with talk of “doing the right thing” and “you are in good hands”. This was a very impressive event for an Irish emigrant of my generation.

This eventually lead to a letter of offer from IDA Ireland. The offer included the following: The use of a factory in Clonakilty in the south west of Ireland for 4 years free of all rental charges (value 80k) with an option to purchase after the 4 years at 10 Pounds per square foot.

We did query this letter of offer (see below: Were IDA Ireland the Architects of a Criminal Fraud?,) but in the end it seemed a good offer and so we agreed to move the factory to Ireland.

A Premeditated Well Designed Confidence Trick?
Newspaper clipping 1923 Burnley News
Newspaper clipping 1923 Burnley News

Were IDA Ireland the Architects of a Criminal Fraud?

This letter of offer is a very interesting document and deserving of some study. There are a number of possible theories as to what was going on.

Theory 1. A Criminal Fraud.

In this theory IDA had decided to use the circumstance of my nationality two circumvent two EU regulations.

  • Firstly the regulation that forbids the use of EU funds as an incentive to businesses to relocate within the EU.
  • Secondly the regulation which forbids organizations responsible for managing the distribution of EU funds from using EU funds to finance themselves.

If IDA were to classify Willie Holts as an indigenous Irish Startup then the letter of offer becomes very interesting from their point of view. One of their factories which had been empty for 6 years would start producing income.
In this case there is then two very good reasons for such a high rent figure.

  • The higher the rent amount the higher the amount they could embezzle from European funds.
  • The higher the rent amount the higher the amount they could say we owed them later on.

If this is the case it would involve IDA setting up the paperwork for the EU regarding Holts as if someone in Clonakilty had decided to start making billiard tables and they had decided to help with the rent. In this way they could get the EU to pay the bulk of the rent to them. To use European funds as an incentive to get a factory to move from one European country to another is illegal and to do so constitutes a criminal fraud. Is this what IDA did? Was it the case that from the moment we entered that factory it became from IDA’s point of view “a nice little earner”.

If this is true then by playing the role of benefactor and putting all sorts of conditions on the “aid” IDA were seeking to hide the fact that their relationship with the project was in fact parasitic. We were not informed that we were in receipt of European funds, as required, and no sign was put on the factory to indicate to the public that the project was in receipt of EU funds, which is also a requirement.

If this is the case the amounts embezzled were substantial and sufficient, we understand, to result in custodial sentences should a successful prosecution be brought against those responsible for setting up such a fraud.

Is there any evidence to lend some credence to this theory?

It would be four years before we found out that Willie Holts was considered an “Irish Company.” And since when? Well “all the time really.” Please listen to the recording on the right.

Please click here to listen to an extract from this conversation.

It was almost 5 years before we found out the ammounts involved.

The Irish Times - Friday, April 25, 1997
Minister denies EU funds abuse

Is there any further evidence to lend credence to this “Criminal Fraud Theory?

Firstly if you read the letter from Mr. Sherry above (at that point we were being told we could not buy the building and if we wanted to go home we owed IDA a great deal of money) you will note that he states that it is not possible to say that the support we received was of EU origin as the expenditure was greater than the EU funds received. Essentially what he is saying is that all companies who want to leave Ireland will have to repay all grant aid to the Irish State agencies in full because all the grant aid they received will be held to be from the small portion of the total grant aid dispensed that did not come from the EU! Very clever indeed.
Does this not constitute an alibi? Why dream up an alibi, however feeble, if you are not conscious of the crime?

Secondly there is the fact that later when they refused to sell us the building and we refused sign up for another year “rent free” the Irish State Agencies reacted by charging us rent and increasing the price of the factory to make up for what would be the resulting shortfall in their expected income. Please listen to the recording on the right.

Then there is the IDA denial that they had anything to do with us. See the letter and email on the right. Why would an agency such as IDA risk its reputation with such a lie. Why did they want distance from Holts? What are they hiding from? 2004-05-20-ida-rus
Nothing to do with IDA
Nothing to do with IDA

Theory 2. A Genuine Offer.
IDA fully intended to honor its commitments under this agreement and the letter was written in this way to protect the tax payer. The fact that when the company requested details of the “normal grant conditions” these were not forthcoming, was an oversight. IDA did not misrepresent the company as indigenous intentionally but that was due to an administrative error. That the funds thus received from the EU were received as part of the same administrative error. The fact that IDA did not honor its undertakings was due to the reorganization of the Irish State agencies which occurred during the period of the agreement and the consequent loss of continuity of relationships. That the fact that IDA did not honor its undertakings was also due to failure of the company to comply with the stated conditions.

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