A financial expert told the Lindsay Tribunal today that the Blood Transfusion Service was effectively insolvent between 1979 and 1981 and, if it was an independent company, he would have put it into liquidation. The Lindsay Tribunal has heard its bank was refusing to honour its cheques and nearly £1m was needed to avert a total financial breakdown.
John McStay, an expert in company liquidation and receivership, was employed by Pelican House to examine its financial records between 1970 and 1990. On his first day of evidence, he told the Tribunal that Pelican House did not make enough profit to put money aside for capital projects in the early 1970s. This in part led to a financial collapse in 1978 when the blood bank decided to move from Dublin's Leeson Street to a larger premises in near-by Mespill Road. Mr McStay told the Tribunal that the company was not profitable at the time and its wage bill was mounting. While it secured a loan, the move was protracted, delaying the sale of the old building, the refurbishing costs of the new office doubled and this all took place in a high interest rate period. Mr McStay agreed by 1981 things were in a pretty disastrous situation, the bank was not honouring its cheques to the Revenue Commissioners and Pelican House was shortly pleading for £900,000 to avoid financial breakdown.
Ted Keyes, who took over as effective blood bank Chief Executive in 1986 was said to have introduced tighter fiscal control. However Mr McStay suggested that Pelican House was caught as its ultimate paymaster, the Department of Health, often refused to allow it increase its prices and did not provide capital funding up front. The issue of money is important as the Irish Haemophilia Society has charged the blood bank put profit rather than safety as its priority. The Tribunal heard today that haemophiliac blood products grew steadily from a revenue point of view to become 26% of Pelican House total income by 1990. However Mr McStay contended that from the documentation he believed Pelican House only responded to demand rather than pushed sales.
