Au­di­tor faces hear­ing over firm’s trans­ac­tions

Reg­u­la­tory board to ex­am­ine com­plaint from Busi­ness Ex­pan­sion Scheme in­vestor

The Irish Times - Business - - BUSINESS / NEWS - BARRY O’HAL­LO­RAN

The au­di­tor of a com­pany linked to the backer of a jobs ini­tia­tive that is un­der threat fol­low­ing a failed prop­erty deal is fac­ing a dis­ci­plinary hear­ing in Jan­uary.

Busi­ness Ex­pan­sion Scheme (BES) in­vestor John Hearns has com­plained about ac­coun­tants Whe­lan Dowl­ing & As­so­ciates, au­di­tor of green en­ergy com­pany Pro­nan­o­tect, which is con­trolled by busi­ness­man De­clan Con­way, to the Char­tered Ac­coun­tants’ Reg­u­la­tory Board (CARB).

Mr Con­way also con­trols Opensparkz, the com­pany at the cen­tre of a row over a failed deal to buy a va­cant fac­tory in Castle­bar, Co Mayo, that has left plans to cre­ate more than 200 jobs there in doubt.

The CARB con­firmed in a let­ter to Mr Hearns its con­duct com­mit­tee de­ter­mined there was a case to an­swer and re­ferred the mat­ter for hear­ing be­fore a dis­ci­plinary tri­bunal. The board has sched­uled the hear­ing for Jan­uary.

The com­plaint is not di­rectly re­lated to the Mayo deal. It queries trans­ac­tions be­tween Pro­nan­o­tect and two re­lated firms, US-based Avant Cap­i­tal Part­ners, the par­ent of both Pro­nan­o­tect and Opensparkz, and Por­tuguese-reg­is­tered Avant In­vest­ments. Mr Con­way is a di­rec­tor of both firms.

In 2010, Pro­nan­o­tect trans­ferred €718,000 to the two firms to pay for a tech­nol­ogy li­cence. It then classed Avant Cap­i­tal and Avant In­vest­ments as debtors in its ac­counts. Ja­son Dowl­ing, Whe­lan Dowl­ing’s au­dit part­ner, de­nied the com­plaint and plans to con­test it vig­or­ously.

“It is a tech­ni­cal mat­ter, it’s at the lower end of the scale,” he said. “There has been no hear­ing and no find­ing against me and I am still an ac­coun­tant in good stand­ing. I have en­gaged a so­lic­i­tor to rep­re­sent me and I have en­gaged with CARB.”

Mr Dowl­ing added that this was the sec­ond com­plaint from the same in­vestor. He noted that the first only found his firm re­spon­si­ble for a mi­nor breach of one fi­nan­cial re­port­ing stan­dard.

Chan­nelled off­shore

The sec­ond com­plaint is based on new in­for­ma­tion pro­vided by Mr Hearns. It al­leges that the au­di­tor failed to recog­nise that funds raised un­der the BES were used for pur­poses that con­tra­vened the scheme’s rules and were chan­nelled off­shore to dis­charge costs associated with com­pa­nies con­trolled by Mr Con­way.

Pro­nan­o­tect and a re­lated com­pany, Spear­point, raised €1.6 mil­lion from BES back­ers in 2009 and 2010 to pay for the de­vel­op­ment of a sys­tem to con­vert waste plas­tic to fuel.

In 2015, Mr Con­way an­nounced Opensparkz was buy­ing the old Volex fac­tory in Castle­bar from Mayo County Coun­cil and would cre­ate 200 jobs in a “sus­tain­able in­dus­try” hub there. News that the deal is not go­ing ahead sparked con­tro­versy in the re­gion. The coun­cil says it is in talks on an al­ter­na­tive project.

Ef­forts to con­tact Mr Con­way for a com­ment were not suc­cess­ful.

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