Eircom has secured a High Court order restraining two people, including a company executive, from reducing their assets below €800,000 pending the outcome of legal proceedings brought following the discovery of an alleged "significant fraud" within the company.
Eircom had sought the order after an internal audit discovered the alleged fraud which, the court was told, could lead to a direct financial loss for Eircom of €700,000. The alleged fraud related to payments for market research and promotional work, which Eircom contends was either not done or about which the circumstances are unclear.
The proceedings have been brought by Eircom and Eirtrade Ltd, a company subsidiary, against Keith O'Reilly of Hamlet Close, Flemington Lane, Balbriggan, Co Dublin, Andrew Stevens, of the same address, who is the sole shareholder in a market research company, AS Consulting, and against AS Event Ltd, trading as AS Consulting.
The court heard Keith O'Reilly, who is currently on "garden leave" from Eircom, was head of content and marketing at the Eircom.net Division for the last five years. According to court documents, he earned a total €433,662 including salary and bonus payments since he took up the position in December 2001.
In court yesterday, Maurice Collins, for Eircom, applied for an injunction, to continue pending the outcome of the full proceedings, restraining Mr O'Reilly, Mr Stevens and AS Consulting from disposing of or dealing with any of their assets within the jurisdiction. Mr Collins said there was no appearance by the defendants.
Mr Justice Frank Clarke granted the order sought.
In an affidavit, Brendan Darcy, group head of internal audit at Eircom Limited, said the company had commenced the proceedings arising out of the discovery of an alleged "significant fraud".
He said Mr O'Reilly has been an employee of Eircom since December 2001 and head of content and marketing at a division of Eircom known as eircom.net.
Mr Darcy said Mr O'Reilly had attempted to resign with immediate effect in February of this year but was put on three months "garden leave".
Mr Darcy said a detailed investigation carried out by the Eircom internal audit division had disclosed payments totalling in excess of €525,000 to AS Consulting since 2002. These payments were in respect of work which, it had been established, was either not done or about which the circumstances in which it was commissioned and delivered were wholly inadequate and inexplicable.
The investigation has also disclosed that payments in excess of €100,000 had been made by Eircom to AS Consulting in respect of VAT, he said. Eircom had concerns such payments may not have been remitted to the Revenue Commissioners.
Mr Darcy said Mr Stevens, as a director and sole member of AS Consulting along with AS Consulting itself, appeared, on the basis of the investigation carried out by internal audit, to be the beneficiaries of sums from Eircom in excess of €625,000.
Mr Darcy said Eircom had learned that the Balbriggan home of Mr O'Reilly has been put on the market. This was of particular concern to Eircom.
AS Consulting was the trading name of AS Events Limited and Mr Stevens was the sole shareholder, Mr Darcy added. It was represented by Mr O'Reilly that AS Consulting was performing market research and other services relating to the eircom.net internet service and that it had a number of contracts with Eircom.
