A High Court judge has found a transfer of money from a firm behind a failing restaurant run by businessman Jeffrey Stokes to another firm owned by his wife, Pia Bang Stokes, was a fraud under company law.
Ms Justice Mary Finlay Geoghegan ordered Mr Stokes, a co-director of Citywest Hire Ltd, which operated Il Segreto restaurant on Merrion Row, Dublin, must repay €21,000 to the official liquidator of the business, Myles Kirby.
Mr Kirby had sought repayment of €63,000 he claimed had been wrongly transferred over an 11-day period in May- June 2013 involving use of one of two credit-card machines in Il Segreto being managed by the Stokeses’ sons, Christian and Simon.
The sons, who previously operated the Residence club, were in January 2012 barred by the High Court from being company directors for four years over their involvement in a restaurant business that went into liquidation.
‘Cheater’s charter’
Mr Kirby’s lawyers argued the transfer of the €63,000 was a “self-serving exercise” when Il Segreto was in “freefall”. It was dishonest and amounted to a “cheater’s charter” as a business was coming to its end, it was claimed.
Mr Stokes denied it was fraudulent and insisted it was a response to a very difficult trading situation.
Yesterday, Ms Justice Finlay Geoghegan said she was satisfied it was Jeffrey Stokes who, at a minimum, had control of money transferred to Petrolo, a company owned by his wife, Pia, which ran the Unicorn restaurant, around the corner from Il Segreto.
Mr Stokes must therefore repay the money, she said.
Because nearly €42,000 of the €63,000 transferred had been used to pay staff wages and for supplies to the restaurant, she was ordering only the balance of €21,000 should be paid back to the liquidator, the judge said.
The judge said no application had been made against Christian and Simon Stokes and in reaching her decision she had not taken into account any prior activity of theirs.
The court heard the Revenue had obtained the appointment of the liquidator to Citywest in September last year.
Credit-card machines
Certain facts were not in dispute, including that two credit-card machines were used in Il Segreto, one linked to a Citywest bank account, and the other to an account of Petrolo, Pia Bang Stokes’s company.
When the landlord of the Il Segreto premises repossessed it on June 10th last year, the day it ceased trading, the landlord handed over the Petrolo credit card machine. Investigations showed that between May 30th and June 10th, 2013, €63,000 had been transferred from the till takings of Il Segreto to the Petrolo bank account. On June 10th, employees of Il Segreto transferred to the employment of Petrolo.
Ms Justice Finlay Geoghegan said she was satisfied the effect of lodgment of that money to the account of Petrolo was to deprive Citywest of money it was entitled to. The effect was to perpetrate a fraud of Citywest within the meaning of Section 139 of the Companies Act, she said.
