The Bank of Scotland (Ireland) claims its staff are guilty of no wrongdoing relating to allegations of sexual harassment, bullying and financial impropriety levelled by a former high-ranking executive, Ms Prisca Grady.

The bank's chief executive, Mr Mark Duffy, said yesterday the fact that a case before an Employment Appeals Tribunal taken by Ms Grady was settled on Tuesday before it was due to start should in no way be interpreted as an admission of guilt on the bank's part.

He said Bank of Scotland (Ireland) was willing to fight the case but a settlement so favourable to the bank was negotiated and he would have been foolish to turn it down. Mr Duffy told The Irish Times the bank had neither paid Ms Grady's legal costs nor paid her any compensation.

Instead, Ms Grady had agreed to drop her action in exchange for an agreement by her former employer to buy out her €600,000 in carried interests for half their value, €300,000, he said.

Carried interests are bonuses that Ms Grady would have accumulated during her tenure at ICC Venture Capital - now owned by Bank of Scotland (Ireland).

Employees are entitled to a small percentage of the profits from investments earned for ICC.

As part of the settlement, Bank of Scotland (Ireland) agreed to lodge €300,000 in an account for Ms Grady on or before next Tuesday.

The exact value of the carried interests will then be determined and if the value is over €300,000, Ms Grady will be paid the balance.

Both parties were subject to a confidentiality agreement as part of the deal struck on Tuesday.

However, details emerged which were published in the media. Yesterday, the bank disclosed more details of the settlement.

Ms Grady was not contactable yesterday but her counsel Mr Roddy Horan said he would be "astonished" if his client had broken the confidentiality agreement.

"It would be an act of folly and would make no sense," Mr Horan said.

The case was the subject of two earlier Employment Appeal Tribunals (EAT) - in May and July - and a brief High Court case last week.

Ms Grady told an EAT in July that after her resignation from her £100,000 (€127,000) plus per year job in mid-2000 she became suicidal and for some months spent most of her time in bed.

She also alleged that Mr Tom Kirwan, deputy managing director of ICC Venture Capital, had sometimes behaved inappropriately when the two met alone in Mr Kirwan's office to discuss business.

The July tribunal heard that, at some meetings, Mr Kirwan had looked her up and down in a suggestive manner and had "gyrated" his hips.

Mr Kirwan sat in his seat, pulled it in close to his desk, put his hands below the desk and gyrated his hips, it was alleged.

The July hearing was also told at some of these meetings that Mr Kirwan's "lips would redden" and his "eyes would glaze over".

The bank rejected all of Ms Grady's allegations and it was put to her at the July hearing that some of her evidence was fabricated.

At the earlier EAT in May, Ms Grady's legal counsel said his client would make allegations of mismanagement of funds and excessive profit-taking, both of which the bank denied.

Because the substantive case was never heard, these allegations never came to light.

Yesterday, Mr Duffy said the case had "not been easy for anyone involved" and that there had been "no winners".

He said many of his staff and their families had been put through a difficult ordeal.

The bank would have challenged all of Ms Grady's allegations had the substantive case gone ahead, he said.