Henchy claims no credit limit on Dairygold account
The former chief executive of Dairygold has said that allegations of financial impropriety severely damaged his good name in front of his colleagues and the world wide agricultural community.
Businessman Jerry Henchy (48) from Kilmallock, Co Limerick is suing his former employers for €8m in damages arising from his dismissal for “spurious reasons” to do with alleged financial irregularities with his farm account. He is also suing the co-operative for defamation over articles that appeared in the national and international press subsequently. Dairygold contest all counts.
Henchy told Justice Daniel Herbert that an account of his business with the agri-trading end of the co-operative given to the board contained factual errors and it suggested that he had acted improperly. “They destroyed my name,” he told the court today.
Henchy claims that he was never approached to clear the balance of his farm trading account which, at the time of his termination, stood at more than €130,000. He told the court that he realised he had not paid much attention to his personal financial affairs in 2008.
“We had an extraordinarily difficult year in the business.” Henchy explained that a variety of factors triggered by the global economic downturn meant that the company was due to lose over €20m across the dairy processing side of the business as well as making substantial losses in the value of the property portfolio handled by subsidiary company Reox, of which he was also CEO.
Henchy said he was approached by Jim Woulfe, who was in charge of the agri-trading division, in November 2007 to pay off some of the balance so that it did not appear to be a non-performing account. He told the court that he made an agreed payment of €15,000 in February 2008.
He said that after a question was raised at the AGM in May concerned managerial debts, he was approached by chief financial officer Michael Harte who told him that chairman of the board Vincent Buckley would want to follow up on the matter. Henchy said that he told Harte to tell Buckley everything and for the chairman to come back to him if there was a problem.
Henchy said he was concerned that, if the question had not been a “shot in the dark” his personal financial circumstances were moving “from the business into the public realm”.
He said that in December 2008 he received an email from Harte asking him to pay between €40,000 and €50,000 to stop the account coming before the auditors. He told the court he made a payment on €40,000 in January of the following year.
Henchy told the court that at no stage had he been informed there was a credit limit on his account. He said that no one at this point had told him he must pay off the entire balance and he had never given an undertaking that he would pay off the money before the end of 2008.
Henchy told the court that on January 14th 2009 he met Buckley. Buckley informed him that the balance of the trading account must be cleared within tw0-and-a-half working days or the matter would be brought before the board.
Henchy said that he told Buckley he was waiting for a substantial tax rebate and was intending to pay the account out of that. Judge Herbert asked him “did you not think that might have been sending a terrible signal to Buckley that you could not pay unless you had the revenue bill?”
On January 19th the board of Dairygold met and the matter of Henchy’s farming account was raised. Henchy claims that the decision to fire him was made at this meeting. He told the court that he met with Buckley and vice-chairman Sean O’Leary in a hotel two days after the board meeting.
He said he had known it would be serious meeting when he arrived and there was a room booked. Buckley told him that the board had taken a very negative view of the matter and said that if there had been a vote of no confidence Henchy would have lost it, he said. Henchy told the court “that was the first time I realised that my job was at risk.”
He said that he had wished to end the meeting at that point but that O’Leary had told him to sit down, that he had told them in the past that if something like this was to happen they were to talk to him direct. Henchy claimed O’Leary told him to “sit down and take my medicine”.
An emergency board meeting was scheduled for January 26th. Henchy told the court he discovered afterwards that there had also been a meeting of the auditing committee. He told the court that the minutes of this meeting showed that Buckley had merely “paraded in” the subject of Henchy’s account rather than introducing it for the committee to properly examine.
Henchy claimed that a document circulated to the board at the meeting that followed the audit committee meeting, written by Jim Harte outlining the history of his farming account contained factual errors. He told the court that this document would lead the board to believe that he had acted improperly.
Henchy said that he had refused to attend the board meeting on the 26th but had personally delivered a cheque for the balance of his account with the hope that this would end the matter. However, he said he believed the meeting to be a “sham” with the aim of putting in place steps to remove him from his position.
He said news articles that appeared in the press following the meeting contained leaked information that could only have come from the board of Dairygold. He told Judge Herbert that the only person he had discussed what was happening with was his wife.
Dairygold contests all counts. The cases resumes tomorrow in the High Court.
By Abigail Rieley