The “Mentor” ~ An Experienced and Trusted Advisor

From time to time while we were in Ireland table stocks in Germany rose to unacceptable levels and we feared that Gauselmann would have to cancel one or more containers. While this never actually happened, when stock levels were very high we were very worried people. But while there was no legal agreement, Gauselmann proved to be men of their word.

During one such period when we feared a break in orders we asked IDA about the possibility of bringing the sale of the building forward. This would have the effect of compensating the company for the losses during the R&D period and thus releasing us from our personal guarantee to AIB and Gauselmann from the requirement to pay in advance. Both ourselves and Gauselmann felt that we had done our bit and it was now IDA’s turn to do its bit and sell us the factory under the terms agreed before we came to Ireland. We also wanted to move our kids to Ireland and needed the security.

To realize the offer on the building would secure our situation and give the companies balance sheet the revaluation reserve that this would produce. We would then be in a very good position looking to the future. We needed advice on how best to set things up with regard to the company structure and the relationships between ourselves, our different companies in Ireland, Belgium and so on.

So in January 1996 I contacted Ms Byrne from IDA Cork and asked if a Mentor could be appointed to advise us.

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

Ms Byrne now informes me that we would need to talk to Forbairt because we were considered to be an indigenous company. "They decided it was a very unusual case."

This was the first time we heard this. We did not realize its significance at the time.

We did not object to Forbairt as they had carried out the Technology Audit and we were very happy with this. What I did not realize was that there is a Forbairt and a Forbairt. The Forbairt that did the Technology Audit were the part of the organization that used to be an organization which was called The Institute of Industrial Research and Standards when I was at school. They had been swallowed up by Forbairt but they differed from their new colleagues in that they made sure they understood our project and as the reader will note from the audit they actually work for their pay.

In any case Forbairt appointed a Mentor to advise us. 1996-02-00-mentorpub1
Experienced and Trusted Advisor
May Not Assume the Role of An Executive
12th of February Appointment of Mr. Peter Bennett

We had been pushing our auditor for accounts for months and there was a protracted period when we sent a fax each day looking for the accounts.

We had two meetings with Mr. Peter Bennett on the 14th and 21th of February. We discussed a new structure involving a new Irish company purchasing the assets of the Isle of Man company and the share holding in the ecommerce company. On the 22rd of February we finally received a letter from our accounts to say that the accounts would be ready by close of business on the 23rd. We picked up the accounts at 6.15pm on the 23rd.

We were shocked to discover that the accounts showed a substantial loss for the previous year when we were sure we had a profit. We were not to know at that time that the accounting problem arose because our clients paid for each container of tables in advance. It would seem that our Auditor’s spreadsheet could not handle this and so a number of containers were miss booked creating a loss instead of a profit. The Mentor said that he would check these accounts and came back on the 6th of March to say that they were correct and that we were in dire straits.

We were devastated.

Shortly afterwards we received a letter from Forbairt dated the 12th of March again appointing a Mentor but this time giving us a choice between 3 Mentors. As the Mentor was already in the factory we assumed that this was an error and ignored it. We now believe that this was an attempt to cover up the manner of the Mentor´s appointment.

1996-03-12 Mentor appointed again in the correct way.
Was this a cover-up?
1996-03-15 Mentor's Invoice
Mentor's Invoice

On the 19th of march we had another meeting with the mentor in the factory and the Mentor said that the only solution was to sell most of our shares. He undertook to set up an Irish company to take over from the IOM company so that he could set up a BES scheme and that he would do his best for us. We relied on the Forbairt documentation which stated that a Mentor could not take a share holding in a client company. The Mentor would sell the assets of the IOM company to the new company and arrange the shareholding. The Mentor returned to say that he had sold 40% of the company for 70k and would be giving us 10% of the company and that he “would hang on to 50% for safe keeping in case we needed more money”. We had not given the go ahead for any sale of anything to anybody. When I complained he said I should be happy with what I got given the state of the company. He also told us that the 70k investment was from anonymous investors and that his brother who was a Ballyfermot based solicitor would hold the voting rights on those shares.

We went to battle stations. We added to our telephone monitoring system, which we already had in place, by bugging the office.

On the tape on the right this “Mentor” explains what happen at his meeting with Mr. Mort O’Connor (who was responsible for organizing his appointment as a “Mentor” to our company). You will note that the sale of the building was a “shoo-in” and that Forbairt would accept the Mentors report as the required review of the company. This all to be approved at a board meeting on the 10th of May. It was also agreed that IRP 15k of EU funds would be paid to this person so that he could tell us all about billiard tables in North America and how the pockets should be designed!
So we now knew we had until the Forbairt Board meeting on the 10th of May to block this person. We made our plans accordingly. We were not to know but they did not wait until the Forbairt Board meeting and already went ahead and sent the contracts for the sale of the building to Ballyfermot. This is evidence of how the “Board” system works in reality. There would be more later.

Another interesting item on this tape is that Forbairt see no problem in “bringing forward the sale”.Later IDA would claim that we did not exercise our option on time. We believe that this is a good example of the nature of the IDA Property and Legal departments. It is no surprise that academic research has shown that the vast majority of disputes that result in factories leaving Ireland involve the IDA Property people.

Sale of the building was a
“shoo-in” and
IRP 15k From the EU

On the 15 of April we went to our Belgian office to develop a strategy. I briefed Gauselmann as to what was going on. I had discussions with a major Mantis component supplier in Cork (MBI ltd) who had previously expressed an interest in our project and they agreed to look at our company. That day the Mentor was in the factory and told my personal assistant Ms. Maebh Keating that she must sign a cheque for IRP 4,000 for him for his fees. He told her that he was now in charge and that she must sign the cheque. She refused. This was a very brave thing to do. As far as she knew her job was on the line.

On the 17th of April we receive a call from our production manager to our Belgian office to inform us that Mr. Bennett had suddenly lost interest in production and had spent the day measuring the building. The Mentor asked Ms. Keating to write the letter on the right to IDA. She complied but surreptitiously faxed a copy to us in Belgium.

Mentor Exercises Option to Purchase

On the 24th of April we returned to Cork without the Mentors knowledge and met with Mr. Mort O'Connor from Forbairt Cork and informed him that whatever happened their Mentor was not getting our company and as they had put him in they should get him out. We told him we had alternative legitimate investors. (We still believed the audit at this point). I warned Mr. O'Connor not to contact the Mentor or to inform him of what we were doing as I wanted to come at him out of the blue. Mr. O'Connor looked very shocked and said “I did not sign anything.” He told us that he “could not interfere in a dispute between directors.” He then got up and left the room. We waited for a considerable time before we realized he would not be returning. We found our own way out of the building.

I warned Mr. O'Connor not to contact the Mentor or to inform him of what we were doing as I wanted to come at him out of the blue.

On the 25th of April"The Mentor" sent a letter to Mr. Ray Reidy from AIB Bandon about the personal Guarantee from Paul Russell and to inform Ray Ready that he was now in control of our company.

So as can be seen from this letter Forbairt had tipped the Mentor off that we were not going to cooperate. From now on we were very careful about what we told Forbairt about anything.

1996-04-25 Mentor AIB

Shortly afterwards a fax from the Mentor´s brother in Ballyfermot to the Mentor was inadvertently sent to our office in Clonakilty. Our staff made a copy and hid the copy.

This fax confirmed that the IDA had agreed to sell our factory to the Mentor´s company in Ballyfermot.

We went to our local TD and asked him to intervene to stop the sale.

The next day we received a heated phone call from Forbairt's Mr. Mort O'Connor and we were told “going to a senior Politian behind my back was a big mistake now Paul and that factory will be sold to nobody.”

Snookered in Clonakilty

We were now de facto squatting the factory. Our supplier from Cork MBI Ltd put in an accountant to assess the company and he quickly discovered that the audit was incompetently carried out and that in fact profits were 10% of turnover as we had thought all along.

1996-04-03 Mentor Invoice
1996-03-15 Mentor Invoice
1996-04-25 Mentor Letter to Our Bank
1996-04-29 Threats of Legal Action
1996-05-15 More Threats of Legal Action

The Mentor threatened us with legal action. We asked Forbairt for a copy of the contract between Forbairt and the Mentor backing up the statements in the Forbairt brochure concerning the constraints on the Mentors actions. This was not forthcoming so we informed Forbairt that we required that they indemnify us against any further action by this `Mentor`. Again they did not respond to this request.

1996-04-30IDA Now You Can Pay Rent
Forbairt M. O'Conner Mentor and Rent

We then get an Invoice from IDA for rent. We could not believe it. IDA were playing ball with Forbairt. We were never supposed to pay rent. We were very angry.

The conversation on the mp3 on the right took place sometime later and gives some insight into Forbairt attitude to their Mentor story.


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