National Irish Bank is currently the subject of a number of inquiries both into the allegations of interest or fee loading, and the use of offshore bond schemes as a means of helping customers evade tax.
Two inspectors, the former Supreme Court judge, Mr John Blayney and Mr Tom Grace, were appointed by the High Court, on the application of the Tanaiste, Ms Harney, to investigate the allegations which have been made against the bank.
The inspectors were appointed on March 30th to inquire into the interest and fee loading allegation and later, on June 15th, their terms of reference were widened to include the offshore bonds issue. However their work has been hampered by legal action taken by more than 100 serving and former managers and senior executives who are concerned about having to give evidence which might later be used against them in court.
The High Court ruled on the issue on July 13th last, finding that the staff had no option but to answer questions put to them by the inspectors. This ruling is now being appealed to the Supreme Court.
An authorised officer appointed to look into the offshore bonds issue, Mr Martin Cosgrove, produced an interim report for Ms Harney in June. Ms Harney referred the report on to the Director of Public Prosecutions.
A report on the CMI scheme carried out by auditors from NIB's parent group's European headquarters, found that £33 million had been invested in Clerical Medical International (CMI) bonds, sold by NIB. There were 200 portfolios and there were problems with the documentation associated with a "significant minority" of the portfolios. The problems included incorrect names and addresses.
One of the allegations made in relation to the Isle of Man bonds was that they were used by people who had formerly kept their funds in bogus non-resident accounts.
The Revenue Commissioners are also inquiring into the sale of the offshore bonds and have used the law to oblige the bank to serve them with a list of customers who bought the three products. These people have now been approached by the Revenue and a number of prosecutions are likely to occur.
In relation to the overcharging allegations, the bank has said it will pay "generous" interest to customers when it returns the amounts overcharged.
The Central Bank has also carried out inquiries into the allegations against NIB, but has not disclosed the results. The Garda Fraud bureau is investigating.
