The former chief executive of Dairygold has alleged his former employers refused to acknowledge the “elephant in the room” before telling him that he no longer had a place within the company.

Businessman Jerry Henchy (48) from Kilmallock, Co Limerick is suing his former employers for around €8m in damages arising from his dismissal for “spurious reasons” to do with alleged financial irregularities with his farm account. He is also suing the co-operative for defamation over articles, which appeared in the national and international press subsequently. Dairygold contests all counts.

Henchy told his counsel Mr Patrick Hanratty SC he had suspected his position with Reox Holdings Ltd would be untenable after his dismissal from Dairygold. Reox Holdings is a subsidiary of the co-operative set up to handle Dairygold’s property and other non-core interests after a demerger in 2006. Henchy had been CEO of both companies.

He told the court that he had effectively been branded a thief by Dairygold when they terminated his employment amid allegations of financial irregularities within his farming account with the co-operative. Henchy claims that committee meeting minutes containing potentially defamatory allegations were leaked to the press in the days following his dismissal. He says that his professional reputation was destroyed as a result of these minutes and of articles that appeared in the national and international press in the wake of a summary dismissal.

Henchy told Hanratty that he had expected there would be a lot of questions at the next board meeting of Reox Holdings. He said he was surprised when the board members refused to discuss the matter. “The elephant in the room was huge. There were some really obvious questions that needed asking.”

He said that he was concerned about Reox’s ability to meet his wage and pension entitlements in the following years. He said he also expected the board members to have questions for him about the matters surrounding his departure from Dairygold.

He told the court that despite these questions the matter was not raised at successive board meetings at Reox. Henchy told the court that he had written to Reox outlining his concerns but when his letter was tabled to be discussed at board level the chairman had refused to discuss it citing time constraints.

Henchy said that he had been unable to present a breakdown of head office cost reductions to the board until the situation with his own position was clarified. Soon after he was asked to leave the board meeting but to wait in the lobby of the hotel where the meeting was being held, he claimed. Some time later the chairman of Reox, Flor Riordan came out of the meeting and informed him that after discussion the board had decided that his role was redundant, he claimed.

Henchy told Justice Daniel Herbert that he had never accepted that his role was no longer required and did not accept that he was made redundant. He told the court that there was a lengthy exchange of correspondence concerning his severance terms. “Drivers were arriving at our house at all hours of the night.”

Henchy told the court that he had refused to accept a cheque for more than €422,000 as the company required him to sign away his right to sue. He said that the amount he had subsequently been paid was €90,000 less without this assurance.

Hanratty argued that the terms of Dairygold’s own disciplinary code had not been followed. Judge Herbert asked whether a CEO could be covered by the code. Hanratty told the court that there were several grounds on which an employee of the company could be dismissed for gross misconduct including theft from the company, abuse of drugs or alcohol and bringing firearms onto site. “Does that include the slaughter houses?” asked Judge Herbert.

Dairygold contests all allegations. The case continues next week in the Four Courts in Dublin.