The inspectors investigating the affairs of National Irish Bank (NIB) strongly rejected a "barrage of criticism" from the bank regarding their handling of the investigation, which is now half-complete, the High Court was told yesterday.
Mr Donal O'Donnell SC, for inspectors Mr Tom Grace and Mr John Blayney, said the bank's "histrionic" attack on the integrity of the investigation, following the issuing of an interim report last December updating the High Court on the progress to the investigation, did not stand up.
The interim report had informed the court that the inspectors had, up to that point, interviewed some 75 persons who invested in Clerical Medical Insurance (CMI) personal portfolio products.
Mr O'Donnell said the bank had consistently ignored the last paragraph of the report which stated that the inspectors, in setting out "the more salient details in evidence given", wished to emphasise that they had not yet formed "any concluded view" on those matters and could not do so until officials of the bank had been given an opportunity of giving evidence to them.
Counsel said NIB had seriously misrepresented the inspectors' report and the court should determine there was no basis for the bank's assertion that the inspectors had acted in any way that was fundamentally unfair.
Despite the bank's attack, there was no attempt by it to quash the interim report, he added. What the bank was seeking was much wider. It wanted transcripts of interviews conducted by the inspectors with CMI investors and with NIB employees and past employees.
The bank did not say what it intended to do with the transcripts or what legal right it had to those documents, he said. The inspectors contended it was not entitled to these.
Mr O'Donnell was making legal submissions on the second day of the hearing of an application by NIB and National Irish Bank Financial Services Ltd (NIBFSL) for an order directing the handing over to the bank of transcripts of interviews carried out by the inspectors with CMI investors and with employees and former employees of the bank.
NIB is also seeking an order which it says would restrict "duplication" between the inspectors' investigation and that by the Comptroller and Auditor General into the bank's compliance with DIRT (Deposit Interest Retention Tax). The hearing before Mr Justice Peter Kelly resumes today.
Yesterday Mr O'Donnell said the inspectors accepted there was some overlap between the two investigations but rejected the bank's claim they were identical.
The comptroller was investigating whether financial institutions from 1988 onwards had not paid DIRT, how much was involved and what procedure the Revenue had to recoup any unpaid monies.
But the focus of the inspectors' investigation was different, Mr O'Donnell said. They were endeavouring to establish whether any unlawful or improper practices existed within the bank which served to encourage the evasion of revenue obligations. The inspectors and the comptroller would not necessarily be asking witnesses the same questions.
If the bank secured the order it sought, that could mean the inspectors might be unable to inquire into any practices in the bank which served to encourage evasion of Revenue obligations by deposit account holders - other than in connection with Clerical Medical Insurance products. That would be a gap in the investigation.
Mr Eoghan Fitzsimons SC, for the Tanaiste and Minister for Enterprise and Employment, Ms Harney, said the Minister stood fully behind the inspectors. He said NIB's application could be characterised as an attack on the integrity of an investigation authorised under the Companies Act. If the bank succeeded, such investigations would be "enfeebled".
The bank was advancing no real reason for restricting the inspector's DIRT investigation other than inconvenience and "double jeopardy", he said. The Minister rejected both those arguments.
He said there were clear and distinct potential consequences arising from the inspectors' and the comptroller's investigations. If the comptroller made certain findings of rule breaches, there was nothing the Dail could do in relation to imposing a sanction. However, the court had the power to decide to make a winding-up order.
In earlier submissions, Mr Richard Nesbitt SC, for NIB and NIBFSL, said the "high point" of the inspectors' objection to taking DIRT out of their investigation was that it would be a bit difficult. He did not understand what the problem was.
If the inspectors believed the DIRT issue and the effecting of CMI policies might be inter-linked, his clients' application would not stop them investigating that, counsel said.
Double jeopardy arose for the bank because it was being investigated for the same thing - DIRT compliance - by two bodies. What if they reached different conclusions, he asked. Which would be the right answer? His clients were entitled to have one inquiry and one determination. That would meet the public interest.
On the application for transcripts of interviews, Mr Nesbitt said the bank intended to examine the transcripts for matters that appeared germane so it would be in a position to prepare answers to any matters put by the inspectors. It might also be able to provide additional information regarding certain statements of fact in the transcripts.
NIB wished to help the inspectors and was doing so and the information from the transcripts would assist the bank in that regard, he said.
