PERSISTENT rumours that IRA money was behind the internet service provider Indigo forced the family which owned the company to sell it, a member of the family has told The Irish Times.

The Moyna family has sold the company to Mr Shay Moran, who will take over as chief executive. The sale price was not disclosed.

Indigo says it has some 60 employees and 16,000 subscribers. The US embassy and the SDLP are among those which have websites with the company.

More than £1 million has been invested by the Monaghan based Moyna family in the business since it was established in mid 1995. The money came from chairman Mr Macky Moyna and members of his extended family in Ireland and in the US, according to reports. Mr Moyna's nephews - the brothers David, Donal and Michael Moyna - worked with the company.

Mr Donal Moyna, who joined Indigo three months ago, was acquitted of explosives charges in the Special Criminal Court in the early 1980s.

Another brother, John Moyna, is in Portlaoise Prison. He was convicted two and a half years ago on explosives charges and was sentenced to serve seven years. "People were mentioning the republican links in our family and mentioning it at meetings, and the effects of it were just mushrooming and mushrooming," the source said. "It just got very, very difficult to go forward."

One major company withdrew its business with the company as a result of the rumours. The unease of the former managing director, Mr Michael Branagan, was among the reasons he gave for resigning last month, according to the source.

"The rumours were going to continue to grow and we were never going to develop the critical mass required to make Indigo an international company. People in the international world were not going to have anything to do with us if they thought we were an IRA company.

The family had sold the company with regret. "We're disappointed, but if the company is going to grow, it could not be as a Moyna company." It was, he said, sad that an Irish family could not succeed in business because of what bad happened with some members of the family in the past.

The Moyna family "takes its politics very seriously" but is "republican Fianna Fail" rather than IRA, the source said. "If it was IRA money, I wouldn't be in the company."

Mr Macky Moyna is a founder member of the SDLP and is well acquainted with John Hume and Seamus Mallon. Mr Mallon stayed with Mr Moyna during the 1984 New Ireland Forum.

Asked for details of the sale the source would only say the family would have to "wait and see if we get our money back".

In a press release issued by the company, Mr Moran was described as a successful entrepreneur with interests in the marine and leisure industries.

He is a business graduate from Trinity College, Dublin, who owned a company engaged in the design, manufacture and marketing of electronic security products for the world market. The company was sold in 1990.