Money used to improperly fund the pensions of former EBS directors Noel Windle and Henry O'Dwyer led to a €1.7 million deficit in the pension scheme for the staff of the building society, according to High Court documents.

The documents also allege that the EBS took €3.38 million from the staff pension fund to create a new manager pension fund without the prior consent of the staff fund's members.

Allegations about serious financial irregularities in the management of the scheme were made in an affidavit by pension trustee Mary Devine (52), who claimed she was bullied, harassed and passed for promotion because she brought her concerns to light.

A member of the EBS staff for 35 years, she claims to have suffered stress-related illness as a result of hostility from her colleagues. She secured an injunction yesterday preventing the building society from sacking her.

She claimed that the EBS used funds from its staff pension plan to pay the pension in January 1992 of Mr Windle, a retiring director who was not entitled to the money because he was not in the scheme.

In addition, she claimed that money from the staff scheme was used to fund a manager's retirement package, Henry O'Dwyer, when he retired as a director in 1993. While Mr O'Dwyer was a member of the staff scheme, Ms Devine said his package was not funded to the level needed to pay a manager's pension.

These two transactions contributed to a €1.7 million deficit in the staff pension fund, Ms Devine claimed. In 1995, she discovered that important information about the split of the fund to create a new managers' fund was withheld from her but had been provided to other non-member trustees.

In several meetings in 1995, 1996 and 1997, Ms Devine said she sought explanations for these matters but had received no satisfactory explanation. She also said attempts were made at these meetings to prevent her from pursuing the issue. However, it was her duty as trustee to pursue the issue. Ms Devine said she had no option but to ask the Pensions Board to investigate the matters she had raised.

Accountants at KPMG found serious matters of concern about the stewardship of the fund, but said that crucial information was withheld from them, rendering some of their conclusions unsafe.

Mr Justice Paul Gilligan yesterday granted Ms Devine an interim injunction, pending a hearing on Monday. He would not grant any other reliefs until the EBS had had an opportunity to respond to the claims.