Members of the US-based billionaire Getty family are taking court action to secure the repayment of €4 million loaned to Punchestown racecourse under the controversial passports for investment scheme in 1998.
The Irish Times learned yesterday that the Getty-owned vehicle, GT Equinus, launched the High Court case earlier this week.
It is understood from legal sources that it has lodged a claim for €4.2 million with the court and served summonses on Punchestown's operating company, Blackhall Racing. The claim is for the full amount of the loan and interest.
Punchestown was due to repay €2 million to GT Equinus in final settlement of the debt by last March. However, an internal row involving members of the course's owner, the Kildare Hunt Club (KHC), delayed this.
Last year, Blackhall Racing repaid €150,000 to the Gettys. All the parties involved made it clear that they wanted to repay the debt.
The Gettys loaned £3 million punts (€3.8 million) to the course in 1998 to help pay for its redevelopment.
The loan was made under the assports for investment scheme, which saw the Government give Irish passports to individuals who made substantial investments in the Republic. The State has since ended the scheme.
In 2002, the State body Horse Racing Ireland (HRI) took over the management of Punchestown when it ran into financial difficulty. As part of this process, it renegotiated the terms of the loan and it was agreed that €2.15 million would be repaid by March of this year.
The renegotiated loan was part of the rescue plan for the course that HRI put together in 2002. At that stage, the business was losing an estimated €400,000 a year.
Part of this rescue plan has been implemented, but there is an ongoing dispute between KHC directors over the validity of leases granted by the club to course's operating companies. The leases are security for a number of loans, including the Getty money, and €23 million in State funding.
The course has returned to profitability since 2002, and annual surpluses are running at €400,000 a year. In April, its four-day national hunt festival broke all previous attendance and betting turnover records, and drew most of the leading horses from the previous month's Cheltenham festival.
Along with racing, it generates revenue from other equinerelated events, exhibitions and the two-day Oxegen rock festival that takes place there every summer. Its current management, led by former Kerry executive Dick O'Sullivan, believes the business will continue to expand.
Neither HRI nor Blackhall Racing would comment yesterday on the basis that the matter is before the courts. The Getty family are descended from John Paul Getty, the US businessman who ran Getty Oil, a business he developed after inheriting a company from his father. He became the first billionaire in the US during the 1940s. Mr Getty lived in England for part of his life. He died in 1976.
The passport for investment scheme was introduced by Fianna Fáil in the late 1980s, but was also operated by rainbow government in the 1990s. The Department of Justice had responsibility for administering it.
Punchestown is Ireland's premier national hunt racecourse. Along with its April festival, it stages high-profile meetings throughout the winter and spring. The Huguenot-descended La Touche family left the course and its surrounding land in trust to the KHC more than a century ago.
