The farming account of the former chief executive of Dairygold had fallen so far into arrears that it was closed the High Court has heard.
Businessman and father of two, 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 contests all counts.
Henchy agreed with counsel for Dairygold Paul Gardiner SC that his account had been in arrears as he had not cleared his balance within 30 days and had then failed to clear his outstanding balance within the financial year. He said he had no memory of a document signed by him on 23 February 2006 setting up the account.
Earlier Henchy told the court was told he was advised to set up a Dairygold farming account as it looked bad for the chief executive of the co-operative to be buying his farming supplies elsewhere.
Gardiner said that the account document stated clearly that a charge would be incurred by any accounts not paid within 30 days of invoicing. He said the terms and conditions also stated that all accounts must be cleared at least once a year.
Henchy said he did not have a copy of the document and had been unfamiliar with these terms. He said that in 2007 and 2008 he had been carrying out several capital projects on his farm and much of his €600,000 salary had been earmarked for these. He told Mr Justice Daniel Herbert that he had not qualified for any grant funding for work on the farm because of the amount of income he earned elsewhere.
Henchy said that in order to pay the outstanding balance in 2008, when the amount owed reached almost €140,000, he would have had to get loans to cover this work. Henchy said as far as he was concerned there was never a problem with his account. He agreed that he had been contacted twice by the regional sales manager Sean Ryan asking him to settle his account “to date or to the month of your choice”.
Gardiner asked Henchy if it had never occurred to him that Mr Ryan might have been bonused on the outstanding accounts he had collected. Henchy said that he would not have minded if Ryan had demanded the money more forcibly. Judge Herbert told him that he was not convinced that someone of Ryan’s position in the company could write an abusive letter to the chief executive. “He would value his job more.”
Gardiner asked Henchy if he had arranged the meeting Ryan had asked for.
“Did you pay the account?”
“No I didn’t.”
“Did you reply to the email?”
“I can’t remember”
“Did you reply to the earlier email?”
“I can’t remember.”
“Did you ignore Mr Ryan?”
Gardiner told the court that Ryan had appealed to Jim Woulfe who was in charge of the agri-business division to assist him. Woulfe had met with Henchy in April 2008 to discuss the account.
Gardiner said that in many respects Woulfe remembered the meeting the way Henchy described it in his earlier evidence. He said that Woulfe had told Henchy that he was making a significant contribution to the profits of Dairygold by not paying his account.
Gardiner said Woulfe had explained to Henchy that the balance of his account had been noted in the organisation and that, since he was in a position of significant influence this posed a problem.
“He recalls you were very uncomfortable with the situation and put your hands over your head”
Henchy said he did not remember this.
Gardiner asked him if he had told Woulfe that the chairman Jim Walsh was aware of his financial circumstances and could explain the bonuses he was due.
Gardiner asked Henchy if he had planned to pay the debt with his long-term incentive payout that had been estimated at around €4m. Henchy said he had never expected that kind of money.
Gardiner told Henchy that the farm account had been closed in the first few days of 2008 as there had been no payments for 14 or 15 months.
“You knew if you didn’t pay in the first few days your account would be closed…You didn’t even make a token payment.”
Henchy said that he had been told that his account would not be considered non performing if he made a nominal payment of €150,00 before the independent auditors looked through the company accounts.
Dairygold contests all allegations. The case continues tomorrow at the Four Courts in Dublin.