Mr Gerry Purcell, former managing director of Purcell Brothers Limited, lost £3 million (€3.81 million) in "unauthorised" foreign exchange deals with three other Dublin banks on top of £6.4 million in losses run up with National Irish Bank (NIB).
The three other institutions involved were Barclays bank, Anglo Irish Bank and Gandon - the IFSC-based finance house - according to NIB. The individual amounts owed were not disclosed.
Mr Purcell (36) engaged in massive foreign currency deals through the family cattle trading business with the four banks. The deals totalled £77 million in June last year when the company's turnover was only £21 million. NIB only accounted for £21.5 million of this amount, according to the affidavit of Mr Cormac O'Mahony, corporate banking manager of NIB, which opened in the High Court this week.
Purcell Brothers is seeking an injunction preventing NIB putting a receiver into the company on foot of the £6.4 million debt. Mr Rory O'Ferrall of Deloitte & Touche is understood to be the proposed receiver.
Purcell Brothers wants the injunction until the hearing of a case it plans to take against NIB alleging that the bank should not have allowed Mr Purcell to engage in speculative foreign exchange transactions. Mr O'Mahony denied in his affidavit that Mr Purcell was unaware of what he was getting himself into when engaging in foreign exchange deals with the bank
"He was very knowledgable in foreign currency matters, had equipped himself with expertise, advice and the most up-to-date financial information system. This was a sophisticated Reuters system . . . of a kind that is normally only used in the treasury divisions of a bank," said Mr O'Mahony.
The court heard that Purcell Brothers owned two apartments in London, one on Sloane Square valued at £300,000 sterling (€514,845) and another at Herbert Crescent worth £700,000. The company owned a £334,000 holiday home in Marbella, Spain, and investments totalling £1.2 million. The main assets were two farms, a 285-acre farm at Newrath, Co Kilkenny, worth £3.6 million and a 202-acre farm at Gracedieu, Co Waterford, valued at £2 million.
Mr Purcell stepped down two weeks ago and his father Seamus (78), who founded the company 50 years ago, took control. The shareholders are Mr Seamus Purcell's two sons Gerry and Patrick as well as his wife Philomena. The case is due to conclude today.
