The Tanaiste, Ms Harney, has told a representative for investors in International Investments Ltd (IIL), the Gibraltar-registered company run by Mr Finbarr Ross, why she is not appointing a High Court inspector to the company.

She has also informed the representative that the Fraud Office of the Gibraltar police is to conduct an inquiry into the collapsed investment firm. IIL was incorporated in Gibraltar in November 1976.

In a letter written on behalf of Ms Harney, her private secretary, Mr Paul Vickers, said Garda investigations in 1984-1985 and 1988 failed to produce enough evidence for the Director of Public Prosecutions (DPP) to approve proceedings for fraud arising out of the IIL collapse.

"The DPP has also advised that there are no evidential or investigative developments in relation to the matter," Mr Vickers told private detective Mr William Flynn.

"I should also point out that in the period up to 1995, the matter was considered by successive ministers, who did not consider that there would be any point in using the provisions of Part II of the Companies Act 1990, which allow, inter alia, the appointment of an inspector to investigate and report on the affairs of the company."

Mr Flynn has represented investors who lost money following the collapse of IIL in June 1994 with debts of £7 million (€8.89 million). He wrote to Ms Harney in December 1997, urging her to appoint a High Court inspector to IIL. The Ulster Unionist MP Mr Roy Beggs wrote making a similar request in April 1999. Mr Vickers responded on Ms Harney's behalf on April 20th, 2000.

Mr Vickers said that prior to seeking an appointment, Ms Harney would have to have regard to the expenditure involved, previous Garda reports, the ability of complainants to pursue matters themselves directly through Section 7 of the Companies Act 1990, and the lapse of time involved.

"Other factors which must be borne in mind are the end purpose of such an exercise, the fact that the company is in liquidation, the significant evidential hurdle to be overcome in convincing the High Court to appoint an inspector to a foreign-registered entity and the fact that the principal in the case is still subject to 39 criminal charges in Northern Ireland. You will be conscious, I know, that Mr Ross's case has been scheduled for a retrial in September of this year.

"The factors above, regretfully, do not incline the Tanaiste to taking the exceptional step here of applying to the High Court to appoint an inspector to investigate the affairs of the company, especially having regard to the information available," Mr Vickers said.

Mr Ross was extradited from the US last year and is currently on bail after a jury in Belfast failed to reach a verdict in February. Mr Ross denies the charges which have been brought against him.

Mr Vickers said the Department of Enterprise, Trade and Employment has made contact with the authorities in Gibraltar to determine the exact status of IIL. "We have been advised that Mr James P Galliano, the liquidator of International Investments Ltd, was released from his duties by the Supreme Court of Gibraltar on May 27th, 1997. The Registry of Companies in Gibraltar have since confirmed that, following Mr Galliano's release, their records show that no new liquidator has been appointed and the liquidation of the company is at a standstill."

Mr Vickers said the affairs of IIL are now in the hands of the official receiver in Gibraltar, Mr Jeevan Daswani, treasury department, central arrears unit. Mr Daswani has confirmed that he is in liaison with the fraud office of the Royal Gibraltar Police about an investigation into the affairs of IIL.

"I further understand that Mr Daswani intends to proceed to dissolve IIL in the not-so-distant future and that the Royal Gibraltar Police intend to carry out an investigation into IIL, particularly in relation to the time when the company was set up and incorporated in Gibraltar."

Mr Flynn, in his letter to Ms Harney, said that although IIL was registered in Gibraltar, it in fact conducted its business from Dublin, a fact which, he said, could be confirmed by two named members of the Progressive Democrats party. Mr Beggs, in his letter, said it was "never too late to put right a wrong" and that the appointment of an inspector would be a major step forward. The majority of the investors who lost money to IIL were from Northern Ireland.