HE ONCE hired Girls Aloud to perform at a family function, and commuted to and from his country estate in Wicklow by helicopter. But now John Kelly, who was a millionaire property developer up until last year, has been forced to sell many of his personal possessions, including two Aston Martins, to pay off his creditors.

Kelly, who is being sued by several banks for almost ¤39m over loans obtained through Thomas Byrne, a solicitor who engaged in multiple mortgage fraud, yesterday spoke for the first time about how the affair has ruined his business empire.

The developer from Kilquade in Co Wicklow described this as the most difficult phase of his life. “The last few months have been a life-changing event, but not life-changing for the better,” he said.

Kelly was a client and business associate of Byrne, who used properties as collateral to obtain multiple loans before he was struck off the solicitors’ roll last month. The developer was implicated in the affair when IIB Bank began a legal action in an attempt to recover ¤14.4m.

Kelly’s property empire then collapsed as other financial institutions, including the Educational Building Society (EBS) and Ulster Bank, moved to register judgements against him. EBS secured a judgment for ¤22.9m arising from loans it issued between 2002 and August 2007. The cases involve dozens of properties.

“You could not describe this as a pleasant experience in terms of the problems that this has caused to me personally and my business,” Kelly said. “I was held in very good standing by banks around the country, I did my business well and honourably. But as a result of the matters that arose last October, that situation changed.

“I think anybody would have a difficulty if they are dealing with someone or a banking institution, and that relationship suddenly changes. No bank, prior to this, would have said that I didn’t honour the agreements I had with them because I did.”

The tycoon established himself as a property developer in the 1990s by building apartments in run-down parts of Dublin. His business expanded significantly after he was introduced to Byrne, a Dublin solicitor who ran a legal practice in Walkinstown. Kelly and Byrne entered into a business relationship and invested in property developments which financed extravagant personal lifestyles.

Kelly brought his family on skiing holidays in France and America, helicopter rides to and from his home and treated them to parties attended by celebrities and business associates. The 21st birthday party for his stepdaughter was held at the Four Seasons hotel in Ballsbridge, Dublin, with entertainment provided by Girls Aloud. Newspapers reported that Kelly spent ¤400,000 on the event.

The developer also acquired a yacht, Range Rover jeeps and classic cars, including two Aston Martins and a Bentley, which he kept in a large garage adjacent to his country home.

His difficulties began in October when the Law Society closed Byrne’s practice following an investigation which found the solicitor had engaged in mortgage fraud. A report by KPMG Forensic, a financial consultancy hired by the Law Society to investigate Byrne’s financial dealings, found that about ¤14m in funds was transferred to accounts held by, or related to, Kelly.

Byrne’s lawyers later claimed in court that Kelly “hung like an albatross” around Byrne’s neck and alleged that he “effectively controlled” the former solicitor’s legal firm.

Kelly, who vehemently denied the allegations, is now suing Byrne for ¤6.1m. The case relates to the former solicitor’s handling of a property deal in Co Wexford.

Byrne is counter-suing Kelly for ¤30m including claims for a beneficial interest in the Co Wexford property and other properties in Dublin and England.

“We are in court later this month with Mr Byrne. I am dealing with matters both legal and financial following the closure of his practice,” Kelly said. “The issues will be resolved on their merits. The court is the appropriate place for me to do my business. I am aware of what has been said about me, but those matters will be heard before the courts. It is a public forum and people can hear the evidence for themselves.”

Kelly said a number of banks still extend credit facilities to him. “Notwithstanding the banks that I have had difficulties with, others have been supportive based on my long track record with them. It’s an extremely difficult time; I wouldn’t wish it on anyone,” he added.

A private investigator hired by IIB Bank to track Byrne down was unable to find him, the Commercial Court was told last week. Justice Peter Kelly suggested that IIB Bank contact the Law Society and the gardai. He adjourned for a week an application to admit to the Commercial Court proceedings against Byrne over a property in Dublin valued at ¤1m. Meanwhile, contrary to newspaper reports suggesting Byrne had disappeared, the former solicitor has been found staying with friends and is planning to write a book about his experiences.

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