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Top stockbroker resigns after leak of tax documents

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Another pillar of the establishment has been rocked by controversy with the resignation of the millionaire boss of the country’s largest stock brokerage firm after the leaking of personal documents about tax schemes.

Kyran McLaughlin, 56, quit last week as joint chief executive of Davy’s and from the board but remained an employee of the firm, which represents many blue-chip companies in the country.

"I have taken this decision because it has come to my attention that a number of my personal papers from the 1980s have been distributed to the media and other parties," he said in a statement.

He was questioned by the Moriarty Tribunal, which is investigating payments to politicians, including those made to disgraced former Taoiseach Charles Haughey, and the Ansbacher Accounts, through which payments to Haughey were funneled.

Three High Court inspectors are also investigating the Ansbacher Accounts after an application by Tanaiste Mary Harney.

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In an investigation on Harney’s behalf, an authorized officer named about 120 of the country’s wealthiest people in unpublished court

documents who are suspected of being involved in tax-evasion schemes with the Accounts.

A crucial document connected with the Ansbacher scheme is a 36-page "Note to John Furze" — a Cayman Islands banker and one of the architects of the scheme — which was apparently prepared in 1983 by a member of the Irish financial community.

McLaughlin said he told the Moriarty legal team that he did not write the Furze note document.

He said another document that had been leaked "included details of the establishment by me of a family trust for the benefit of my children, contributions to which were made out of after-tax income.

"I am in contact with the Revenue to resolve outstanding tax issues, if any, which may have arisen from this arrangement or any other matters," McLaughlin said.

RTE had been leaked a document detailing a Liechtenstein tax-evasion scheme which had been written in 1984.

The Liechtenstein scheme had similarities to the Ansbacher Accounts scheme but appears to be more secretive.

Details posted on the Internet by RTE revealed that depositors were advised that they "should never under any circumstances disclose to any person whatsoever in his own jurisdiction the existence or arrangements for the trust."

It also warns there should never be any correspondence and that any scheme would "operate on straightforward telephone instructions."

"No documents concerning the arrangements whether as regards setting up or operating should ever come into Ireland, nor should any meetings be held in Ireland."

The memo also points out "the possible danger that a descendant might well blow the gaffe on the whole thing in years to come by failing to have a true understanding of the nature of the set-up."

Davy Stockbrokers said the document was prepared for them when the firm was preparing to sell 29 percent of the firm to the American company Citicorp for an estimated £5 million.

The brokerage firm, which is now a subsidiary of Bank of Ireland, said it had not proceed with the tax advise in the document.

Davy’s chief executive, Tony Garry, said McLaughlin felt he needed time to devote to his affairs. "We hope they will be resolved in the near future.

"I would like to make it clear that Davy Stockbrokers has not participated or promoted any of the so-called tax schemes at any time in the past or, indeed, at the present time.

"Kyran has difficult family circumstances and the issue revolves around that," he told RTE.

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