Murtagh owes £4m says London firm

The former director and deputy chairman of the Kingspan building products group, Mr Brendan Murtagh, is in dispute with a London stockbroking firm regarding part of a debt totalling more than £4 million sterling (€6.17 million).

The debt is linked to the collapse earlier this year of the Dublin firm, MMI Stockbrokers, now in liquidation. The London firm, K&H Options, which has ceased trading but which formerly did business with MMI, is pursuing Mr Murtagh for more than £4 million sterling, but Mr Murtagh is understood to be contesting part of the amount.

The case was mentioned yesterday as a motion for judgement before the Master of the High Court, Mr Harry Mills SC, but was adjourned for a week to allow a further affidavit to be signed. It is understood that this affidavit will outline Mr Murtagh's contention that he does not owe the full amount being sought.

Mr Mills, reading the notice of motion, said it seemed the "enormous amount of money, over £4 million sterling" had been due since last September. He was told Mr Murtagh had been aware of the claim since May. The matter had been complicated because of the liquidation of MMI Stockbrokers and the resultant difficulty regarding disclosure of documents, he was told.

Mr Mills granted an adjournment of one week and said all the papers should be in order by then. He also said the affidavit to be supplied by Mr Murtagh should be produced by today.

Mr Murtagh is a former client of MMI Stockbrokers. A spokesman for Mees Pierson, a Dutch financial group which has links with K&H Options, said K&H Options was in communication with a number of other former Irish clients of MMI Stockbrokers in relation to "several millions".

Legal action similar to that being taken against Mr Murtagh has been threatened against these individuals, and will be initiated "if they don't pay".

MMI conducted a significant amount of business with K&H Options including 20-day rollover and 90-day give-and-take-back schemes. MMI dealt heavily in oil stocks, including Dana Petroleum and Tullow Oil.

Financial difficulties hit MMI when the price of Dana stock plummeted at the same time as the FTSE index dropped by about 25 per cent.

MMI clients who engaged in schemes involving a maximum 25 per cent up-front deposit, found themselves confronted with having to make significant payments to the company, to purchase stock which was worth less than the amounts they were being asked to pay.

In December 1998, Factoralter Ltd, a company owned by four of the five directors of K&H Options, became involved in a £2.3 million rescue deal with MMI, principally in the hope that this would facilitate the pursuit of funds K&H was owed from deals involving MMI clients. At the time K&H was owed £8 million by MMI clients. The company found that MMI's clients were not as forthcoming in paying their debts as it had hoped.

The rescue deal failed and in March 1999 Mr Tom Kavanagh was appointed liquidator to MMI. He told the High Court the company had "unsettled debts" of £13 million. Unsettled debts are where the London counter-parties to deals have not been paid by MMI, and where MMI has not yet been paid by its clients.

It is understood that £8 million of this was owed to K&H Options, and the remaining £5 million to Merrill Lynch, Credit Suisse, and other London firms. In March, K&H Options informed the London Stock Exchange it was ceasing to operate as an options dealer.