Sean Kavanagh liked women and fast cars. So what, what normal man doesn’t, he had often said to himself whenever his family had accused him of never growing up. The difference was that Sean had the means to indulge himself in those pleasures. He enjoyed the role of the eternal playboy; he prided his status as a bachelor having avoided the marriage trap. The money had rolled in from his successful business to pay what was to most men a very enviable life style.
After more than fifteen years in the business he had built as a financial adviser it did not require a great deal of effort to run his team of twenty odd so called advisors or consultants, their titles depended on the current fast talk in the business, they were in effect salesmen.
They sold all kinds of financial products to people from every walk of life concerned about their future, expatriates, doctors, lawyers, teachers, self employed persons and those who needed to boost their retirement prospects. He sold everything from life insurance to annuities, pension funds to investment trusts, all to a broad public, a market that constantly renewed itself.
His firm lived on the fat commissions paid by the companies he represented and the money poured in regularly and he spent it. Time passed by in a never ending party and at forty six years of age he still had a twenty year old girl friend, a fast car and a fancy apartment off Sloane Square, in London’s fashionable Chelsea.
He was pleased with his happy go lucky situation, though he shivered when he thought of the past when fortune had not always been so kind.
Sean played the game according to the rules. Generally speaking all the entry fees for the life insurance policies or investment trusts were deducted from the premiums in the first three years, which meant in effect that the value of the investment was considerably less than the sums of money paid in by the policy holder or investor. This system guaranteed the payment of costs related to setting up the contract and above all the sales commissions. In many cases it took years before the capitalisation of a contract reached the value of the sums paid in.
It was not Kavanagh’s concern that many contracts or policies were abandoned after the first few years, to the great expense and detriment of their holders, this was mainly due to a change in their personal situations, when they could no longer keep up the payments or because their employers obliged them to participate in another scheme.
In spite of the hazards of such policies there were always plenty of anxious punters willing to sign up, convinced by the hard sell of Kavanagh’s salesmen.
He collected his commissions from every contract he personally signed plus a percentage from the commissions of every member of his team, organised in a pyramidal form with Sean firmly seated at the top.
In spite of the less attractive aspects of his profession Kavanagh was honest and his business was totally legal, to boot he was a nice guy which helped when it came to signing up new customers. How the contracts or policies worked was no secret to those who took the trouble to look closely and read the small print.
He worked hard and played hard taking few real holidays. He was a skilled juggler, though keeping all the balls in the air required his constant presence.
Disaster arrived at Sean Kavanagh’s door when the British government’s new legislation regulating his business, the Financial Services Act, came into law. It was designed to protect the pigeons that were fast-talked into signing up for saving schemes and policies that ensured the present well being of the seller rather than the future well being of the buyer. The act forbade certain categories of persons from acting as consultants, advisors or sellers, especially those who had experienced personal financial problems.
It was logical to the lawmakers that any person who could not run his own affairs should be disqualified from running those of others.
Sean’s skeleton in the cupboard was an ancient bankruptcy that he had had the misfortune to experience at the early age of thirty-one. He had made a lot of money at that time selling a new product, a kind of investment trust, and had decided to accelerate his ride to greater riches by diversifying and investing heavily in the renovation of rundown London properties during a cyclic upswing in the real estate market.
With the assistance of his friendly bankers he bought several properties, large old 19th century town houses in the then up and coming Islington area of London. He engaged building contractors to transform these into small apartments by renovating and restructuring the houses.
He was not the only who got the timing wrong as the bottom fell out of the property market, as it does from time to time. The domino theory was once again proved when the buyers he had lined up disappeared, his partners ran for cover, the building contractors collapsed and went into liquidation with the banks hot on Kavanagh’s trail.
Pursued by all and sundry he learnt a most salutary lesson at a relatively early age, one that he would never forget. What goes up must invariably come down.
The bank called in its loans the properties were sold off at a significant loss and Kavanagh ended up in bankruptcy court.
It was a very hard blow, he was not totally discouraged, he was young, and he picked up the pieces and started again. However, he vowed, he would not repeat the same error by falling into the same trap. Property was out and he returned to the business he knew. After three or four years good money started to flow in once again, enabling Sean to pay off all of his debts.
The consequences of his early misadventure into property came home to roost when the Financial Services Act came into force disbarring him from the business. The insurance companies and investment firms that he represented withdrew their agreements in conformity with the new regulations leaving him without his means of income.
In no time Sean was literally on the streets unable to keep up his payments for the high style of living he was used to. Unfortunately he had not thought of his own pension fund. He lost the latest girl friend, the fast car and the fashionable apartment.
To make matters worse he was pursued by the Inland Revenue for unpaid taxes amounting to several hundred thousand pounds.
With disaster staring him in the face he discovered who his real friends were, and fortunately for him there were one or two. There was no question of finding a job in the only profession he knew, the business that the new act had closed door on forever.
He considered flight overseas, but that was out of the question. He had momentarily thought of the USA, even Hongkong or Singapore, but he had no previous overseas business experience, he was afraid of the unknown, he was broke and without the least financial backing to start again, abroad he feared he would find himself in an even worse situation.
At his most desperate moment and completely broke, he was plucked from the threat of the streets and total ruination by his only true friend. He had grown up and went to school with Jim Carmichael, there the two friends had competed with each other, and had also shared their problems and pleasures.
Months earlier, before the crisis, they had even discussed the coming legislation and the consequences it held for Sean, which strangely had not inspired him into taking action to avert the disaster. Sean had thought a miracle would turn up and when no solution presented itself it could only be said that the consequences were entirely due to his lack of action. He had thought by some means or another he could continue his business. He was like a frog hypnotised by a serpent, completely paralysed waiting for the inevitable.
When the decision of his clients to drop him was announced he was stunned. As a result Kavanagh found it difficult to ask his friend for assistance and avoided him. Jim was not put off that easily, there was no question of abandoning his old friend in the face of such a dire crisis.
Jim Carmichael owned a relatively modest IT services company, which after several years of meandering in software development, without really finding a very profitable niche, had launched into a new growth area for financial and investment software packages for Internet applications. At that time the Internet was an established but relatively arcane communications
technology, used mainly by multi-national businesses, financial institutions, and scientific and research organisations for sophisticated applications, the net was almost unknown to the general public.
To help Kavanagh the least Jim could do was to loan him a few thousand pounds, enough to keep his head above water. He then confided Sean’s plight to a mutual and discrete business friend, who it averred was having a problem of his own, be it a very minor one. It was a management problem in one of his investments, where as a foreigner he had neither the local cultural knowledge nor the experience to handle, whereas Sean, if he were available, would be a godsend.
The two old school friends had befriended a very wealthy Egyptian investor, Philoxenos Moftan. Phil, as he was called, was a Coptic Christian. His family had invested in real estate in the UK as an insurance against rising Islamic integrism in Egypt.
The Copts of the ancient Christian Church of Egypt were a minority in a sea of Islam, many of them feared for their long-term security. They believed that they were the real Egyptians, much more so than the greater majority of that country’s population. They were the direct descendants of the Ancient Egyptians with the language of their church derived from that of the Pharaohs.
Phil’s family had practically exiled him to London to watch over their investments. In spite of his wealth and business contacts he had made few real friends.
As a Cairene he appreciated not only the help he had received from Sean and Jim but also their way of combining business with friendship and pleasure, which recalled to him the oriental way of doing things. They became good friends, with Phil enjoying their frequent forays into London nightlife
Neither Sean nor Jim could have ever been considered as fair weather friends, those who attach themselves to the rich taking advantage of their invitations and money. They both paid their turn of nightclub and restaurant bills and Phil appreciated that, his wealth had put him apart from most of the people he met in London. He considered the pair as equals, compared to many other Englishmen he had met on the unfamiliar London scene, and came to look on them as his real friends.
Sean had guided Phil on investment in the UK, whilst Jim had set him up with software to manage his investments. Phil was a hi-tech fan and followed every new personal computer based business application avidly.
The moment Phil heard of Sean’s predicament he reacted immediately, even surprised and a little hurt that Sean had not come to him for help. Phil was not a stranger to misfortune; in his home country it was not unusual that wealthy people fell victims to predatory government officials and corrupt politicians. At such moments friends and families did not hesitate to aid the victims if necessary by hiding them, even overseas, whilst waiting for the crisis to pass.
He therefore proposed that Sean look into one of his family’s investments. It was a 14th century castle in Scotland, which had been transformed into a luxurious tourist hotel. It seemed that Phil was being swindled by the locally hired manager and certain members of his staff. He proposed to Sean that he become the hotel’s resident controller for as long as it took to put things back into order.
In the meantime to add one problem to another, Sean’s brother, Aiden Kavanagh, who had lodged him in his desperate situation six weeks prior to his departure to Scotland, had received a demand from the Inland Revenue addressed to Sean for payment of a substantial sum of back taxes.
By one of those strange coincidences an ageing uncle, Sean Kavanagh, had passed away some weeks previously. Sean, which is Irish for John, was a very common name in Ireland, it even seemed at times that half of the Irish male population were either called Sean or John. The old man had lived alone for several years with very modest means, having no other nearby relatives than his two nephews, Sean and Aiden. The house where Uncle Sean had spent his last years was owned by Aiden Kavanagh, who had also taken care of his uncles health and daily needs.
Aiden had looked after the funeral and the other formalities. On receiving the demand from the Inland Revenue, he had without thinking further declared to the tax authorities that Sean Kavanagh had passed away, providing them with the time and place of his demise and the date of the burial. From the moment of that declaration all correspondence and demands from the Inland Revenue miraculously ceased.
Sean spent the next twelve months in the Scottish castle under the assumed name of John Ryan, as according to the declaration to the tax authorities, Kavanagh was dead. His new name, which he had chosen, was that of an Irish cousin who had lived in London and had immigrated to Australia a good few years earlier. He remembered his aunt proudly telling him that John had become an Australian, which Sean assumed to mean that he had acquired Australian nationality.
Sean, little by little, recovered his confidence when he realised that there was neither a taxman nor creditor hiding in every tower and turret of the magnificent castle. He played his new role well. His full head of greying hair gave him a distinguished appearance, his face was a little sad as a result of his tribulations, which endeared him to most people.
Sean knew how to handle a team. He could be severe and take tough decisions, no sooner than he was installed he promptly fired the swindling manager and his willing accomplices and after effectively taking control of the hotel he turned the business around generating a good operating profit for both himself and the owners.
He knew his convalescence in Scotland could not last forever nor did he want it to. Phil and his family were not in the business for the operating profits, but on the other hand as normal business people they went to lengths to avoid losses, their real objective was in the capital gains that they expected from the British property market.
From Scotland he went on to handle another of Phil’s hotel operations in London. Once back in the capital he continued to use his assumed name and concentrated on the job whilst keeping a low profile carefully avoiding old contacts. Again the principal object of Phil was real estate investment where another substantial capital gain was made in a little over twelve months.
By that time Sean Kavanagh had had a couple of years to develop new ideas for his own future and to boot a knowledge of the financial aspects of hotel and property investments. He knew there had to be a way to get back into business for his own account, and there was, by developing offshore financial and linked services.
Sean had spent many nights in the hotel’s bar listening to his Egyptian friend as well as the hotel’s overseas guests. Wealthy travellers who liked to recount their business ventures, far from home and prying eyes, to a friendly upstanding Brit who was a willing listener.
He learnt a lot of new things in a world very different to the daily pile of proposals and contracts in his old London firm, where he had never had the time to sit back and see life from a different perspective.
He took to reading many of the business magazines that he had never paused to read before and discovered offshore financial services in their many varied forms, which, he was surprised to find existed in places as near as the Isle of Man and even in Ireland. He discovered the ease with which an offshore bank account could be opened, and a shell company could be bought.
When the London hotel was finally sold for a good profit, he had come to the conclusion that there were more ways to make money, and make it fast, than trying to sell savings investments to the general public. Sean’s role with the Phil had ended with a handsome bonus and he had become a different man with a renewed confidence in life.
Chapter 15
A Passport to Ireland