The High Court inspectors investigating the Ansbacher deposits have approached the authorities in Guernsey in a move to extend their inquiries to the offshore island. Offshore banks in Guernsey formed a crucial part of the Ansbacher desposits between the 1970s and the early 1990s, and held millions of pounds belonging to Irish residents.
The Tanaiste, Ms Harney, told the Dail yesterday that the inspectors had obtained a Letter of Request to the Royal Court of Guernsey from the High Court in July. This is the initial step involved in extending the inquiry to the offshore island.
Ms Harney rejected criticism of the delay in producing reports from the various inquiries initiated in recent years. She said she expected the inquiry into National Irish Bank to conclude shortly, and that into the Ansbacher deposits to finish in approximately six months.
It had not been known previously that the inspectors investigating the Ansbacher deposits had approached Guernsey. Links between the clandestine financial service run by the late Mr Des Traynor and the Channel Islands date from the 1970s.
Earlier this year, Ms Sandra Kells, a director of Guinness & Mahon bank, told the Moriarty tribunal legal changes in 1972 meant exchange control approval was required when sending money to the Cayman Islands.
The Dublin bank opened a subsidiary, Guinness Mahon (Jersey Trust Ltd) to provide an alternative offshore service for Irish residents. The following year it was decided to open a bank in Guernsey, and Guinness Mahon (Channel Islands) was established.
Following the introduction of a wide range of new capital taxes in the Republic, a new trust company was established in Guernsey, College Trustees Ltd. Another bank was established in Guernsey in 1977, called Guinness Mahon (Guernsey) Ltd. This bank was a subsidiary of the London bank, Guinness Mahon Ltd, the Dublin bank's parent.
Until 1979 the Channel Islands were in the Scheduled Area, the sterling area within which money could move without exchange control approval.
Money passed between the Dublin bank and the Channel Islands and also, via London, between the Channel Islands and the Cayman Islands.
The Cayman bank had deposits in London and Dublin. In 1978 the Cayman bank had £4,834,269 sterling on deposit in Dublin. Four years later the balance was £26,980,217 sterling. The deposits in London were far more substantial. Ms Kells said she believed they were in the order of £70 million.
Ms Kells said the net effect of these arrangements was that Irish residents could make deposits and withdrawals in Dublin without requiring exchange control permission or bringing the existence of the deposits to the attention of the Revenue.
Many of the depositors were rich and influential businessman whom Mr Traynor knew through his professional activities as an accountant, banker and financial adviser. Mr Traynor was a close friend and financial adviser to the former Taoiseach, Mr Charles Haughey, who had an account in the clandestine deposits.
