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€80k loan was 'honest mistake' says Gallagher

PRESIDENTIAL candidate Sean Gallagher was today forced to defend his business dealings after it emerged he received an €80,000 loan from one of his own companies.

The election frontrunner was also battling to distance himself from Fianna Fail after it was revealed he invited a number of businessmen to attend a corporate fundraiser with former Taoiseach Brian Cowen.

Mr Gallagher's campaign opponents are expected to latch on to the latest controversies as the race for the Aras enters its most critical days.

It was revealed today that Mr Gallagher received interest-free loans of €82,829 from one of his companies, Beach House Training and Consulting Ltd, in December 2009.

Under company laws, a director should not receive a loan from one of his own companies that constitutes more than 10pc of the firm's assets.

However, the large loan that entered Mr Gallagher's bank account was 70pc of his firm's assets, thus breaching company law.

Directors who permit such loans can be liable for a fine of up to €12,700, or face up to five years in prison.

However, Mr Gallagher today strongly defended his actions, claiming that the loan was an "honest mistake".

"This relates to a cheque that was lodged into the wrong account. It was treated as a loan, it was lodged into the wrong account.



BREACH

"And then the accountant treated it as a loan. When it was spotted, it was in fact moved back within four weeks and it doesn't constitute a breach and I'm very happy with that.

"It was an accounting procedure really, in terms of what account it went into. The error was spotted by my accountant, who I spoke to at length last night, he brought it to my attention and within four weeks, it was moved to a different account. There was no breach and the money was repaid within four weeks."

It is the second wave of controversy to hit the Dragon's Den star today, after it emerged he helped to promote a €5,00-a-head Fianna Fail fundraiser organised on behalf of then Taoiseach Brian Cowen.



INVITED

Mr Gallagher invited "three or four" of his close friends and business associates to the event -- which took place in the Crown Plaza Hotel in Dundalk in 2008.

Fianna Fail have admitted that the event took place -- however it was never publicised.

It is understood that guests who attended the event were asked to donate €5,000 to the party, however Mr Gallagher claimed today that he made no donation.

"I did not attend a secret event to my knowledge. It was an event organised not by me but by Fianna Fail headquarters.

"I want to make it very clear that while I attended the event, I was not asked for money, I made no contribution myself either in a personal capacity or as a corporate donation, before the event, during the event or after the event."

Mr Gallagher said he that invited "three or four" people to attend the event and that he had "no idea" whether they made a donation to Fianna Fail.

The news is expected to prove damaging to Mr Gallagher's Aras bid, given that he was tried hard to play down his links to Fianna Fail.

hnews@herald.ie