Director admits inflating Delta stock levels
Date: 13-10-2006
Source: The Sunday Times
PETER HANAN, the former chief operating officer of Superquinn and a director of the collapsed Delta Homes, apologised to fellow directors for inflating stock figures in the Cork-based building firm?s quarterly accounts in order to produce ?a positive bottom line?, according to his resignation letter. Patrick O?Callaghan, the company?s former chief executive, confirmed that Hanan made the apology in a letter presented to the other directors at a board meeting last July. Hanan wrote that ?the purpose of this exercise was not for any personal gain on my part, but to buy some time from our newly appointed discount facility provider.? The letter continues: ?I now accept that this was a very serious error on my part, and that it constitutes a breech (sic) of trust with my fellow shareholders. I can only attribute this error to the enormous amount of pressure I was under at this time to make the numbers work. This is the first and only time in my career that I have misled any shareholder group on financials.? Hanan said he had given his ?heart and soul? to Delta and stressed how he had personally invested a significant sum in the business. Delta was experiencing severe cash-flow problems at the time. The company, which made prefabricated bathrooms and was based in Macroom, collapsed last month with the loss of about 180 jobs. It has debts of ?17m and its unsecured trade creditors, who are owed up to ?7.3m, are unlikely to be paid. O?Callaghan, who won the Ernst & Young Entrepreneur of the Year award in 2004, told The Sunday Times he was aware at the time that Hanan had ordered the stock figure to be inflated by about ?1.3m. O?Callaghan was subsequently sacked by the other shareholders, which include Conor and Denise Phelan, the husband-and-wife team who are the majority shareholders. Paul Appleby, the director of corporate enforcement, is believed to be investigating the collapse of the company after receiving a complaint from another director. The Institute of Chartered Accountants in Ireland is also thought to be investigating one of its members in relation to the alleged incident.
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