Northern Ireland

Ulster Bank was not aware of alleged '£25-£30m' black hole, court hears

Taggart Group building
Image caption The Taggart Group housebuilding firm was founded by brothers Michael and John Taggart

Ulster Bank was not aware of an alleged £25-30m black hole in the Taggart Group's finances, the High Court in Belfast has heard.

A senior banker who was part of the firm's relationship management team claimed information that emerged later showed it was not a well run business.

Richard Ennis was giving evidence as part of the bank's legal battle with Michael and John Taggart.

The County Londonderry brothers are suing the bank.

They claim its alleged negligence contributed to their firm's collapse.

In a counterclaim, the bank is seeking £5m and 4.3m euros (£3.2m) it says the Taggarts owe.

Once a huge operation on either side of the Irish border, with further interests in Britain, Europe and the United States, the Taggart Group was decimated in the 2007 property market crash.

Within a year, it had gone into administration.

In a claim for damages, the brothers allege they were kept in the dark about credit concerns within the bank.

Had they been warned, they contend, assets could have been sold to off-set loans.

Mr Ennis was one of the senior members of the Taggart relationship team during the period under scrutiny.

He told the court on Thursday that he believed the company's trading performance was "very, very strong" up until losses were disclosed in the accounts in June 2007.

'Financial injection'

The banker had access to no information of concern up to that point, he said.

Asked by a lawyer for Ulster Bank, if any such material has emerged during the case, Mr Ennis replied: "Yes, there was significant information, the December cash flow that wasn't presented to the bank showed a £25-30m black hole."

The firm would also have been expected to raise operational issues around efforts to refinance its Manchester division, he added.

The Ulster Bank lawyer continued: "In light of the information now present, to your mind was this business well run?

Mr Ennis responded: "No."

Earlier he was asked about the Taggarts not "grabbing the first deal that came along" in trying to refinance Manchester and other transactions.

A lawyer for the brothers, said: "(It) is entirely consistent with them not being told of the specific concerns that the bank had during this period, and how these were escalating."

He pressed the witness on why Ulster Bank would have considered a financial injection into the north of England operation if it believed the firm was so poorly run.

"Do you see that it's wholly consistent with (Michael) Taggart's view that nothing was troubling the bank, and that the bank was still prepared to fund a major enterprise in Manchester?" he asked.

Mr Ennis replied: "I don't agree with it."

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