Four senior partners in KPMG in Northern Ireland have been placed on administrative leave following their arrest and questioning in Belfast in relation to allegations of tax evasion.

The allegations relate to their personal tax affairs and appear to focus on how they accounted for losses made by an investment vehicle they set up some years ago.

The four men arrested on Wednesday were Jon D’Arcy, the head of audit and transactions for KPMG in the North, Eamonn Donaghy, who heads the Belfast tax practice, Paul Hollway, head of corporate finance and Arthur O’Brien, an audit and advisory partner. Mr Donaghy is also a leading figure in the campaign to lower the rate of corporation tax in the the North.

KPMG statement

In a statement on Thursday, KPMG confirmed the investigation and the fact that the four men had been placed on administrative leave, pending further investigation and inquiry.

HM Revenue and Customs officers visited its offices in Belfast on Wednesday.

KMPG said it would cooperate fully with the investigation. A number of senior partners have travelled from Dublin to take over the running of the office. The statement said KPMG had no indication that the matters under investigation related to the company’s affairs or to its dealings with clients, but were personal to the men involved.

The Irish News reported this morning that the four men set up a private investment company, JEAP, which invested primarily in property from 2008 to 2010 and racked up significant losses. Arrests and questioning in such cases are unusual and sources suggest that Wednesday's events came as a surprise to the individuals involved.

Full statement from KPMG

“We can confirm that representatives of HM Revenue and Customs have advised us that they are conducting an investigation and visited our Belfast office yesterday. We are cooperating with that investigation. It is important to emphasise that we do not have any indication that this investigation relates to the business of KPMG or the business of our clients. Pending further information and enquiry, we can confirm that four partners in our Belfast office are on administrative leave. As the matter is on-going, KPMG is not in a position to make any further comment at this stage. “