High Court inspectors have been appointed to determine whether the affairs of Ansbacher (Cayman) Ltd., formerly Guinness Mahon Cayman Trust Ltd., were conducted with intent to defraud the Revenue Commissioners.
Retired High Court President, Mr Justice Declan Costello, will head a tribunal which includes barrister Ms Noreen P Mackey and Mr Paul F Rowan, retired chartered accountant and British insolvency practitioner. The trio has been charged with examining and defining the nature and extent of the company's Irish business from 1971 and identifying all parties who were either officers, including shadow directors, and agents of the company, its clients and anyone who assisted in carrying out its business.
The tribunal of inspectors will examine whether the Companies Acts were breached by the company, the provisions so breached and the people in default. They will examine whether the affairs of the company were conducted with intent to defraud the Revenue Commissioners or any other creditors for a fraudulent or unlawful purpose.
The application for their appointment was made in the High Court yesterday by Mr Eoghan Fitzsimons, SC, Mr Paul O'Higgins, SC and Mr Patrick Hunt, BL, on behalf of the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney.
Mr Paul Appleby, told the court in an affidavit, that the Tanaiste appointed Mr Gerard Ryan as an authorised officer to examine the books and documents of the company to determine if its affairs had been conducted unlawfully for a fraudulent purpose. He said Mr Ryan's appointment followed on the McCracken Report of the Dunnes Payments Tribunal which found that from the mid-1970's Ansbacher Cayman Ltd placed substantial deposits with Guinness & Mahon (Ireland) Ltd which by 1989 had grown to approximately £38 million.
The £38 million deposits had been made up of monies which had been deposited by Irish residents with Ansbacher Cayman Ltd.
McCracken had found that Ansbacher Cayman paid to its Irish clients interest calculated at one eighth per cent per annum less than the interest which it received from Guinness & Mahon (Ireland) Ltd, thus generating a small profit for Ansbacher Cayman Ltd. This had been a very ingenious system whereby Irish depositors could have their money offshore, with no record of their deposits in Ireland, and yet obtain an interest rate which was only one eighth of one per cent less than they would have obtained had they deposited it themselves in an Irish bank.
Circumstances had suggested to Mr Ryan that the company may knowingly have participated in a fraud on the Revenue Commissioners. Mr Ryan's attempts to obtain company records had been snubbed by the company which had sought an order of the Grand Court of the Cayman Islands directing it not to comply with Mr Ryan's direction to produce records.
Having failed to secure any co-operation from the company Mr Ryan completed his report to the Minister which revealed the company had carried on the trade of unlicensed banking in Ireland for more than 20 years.
He found it should have been assessed for corporation tax on profits arising from this trade. Mr Ryan had also found that in the 1970s the company initially deposited much of the monies it received from Irish clients in individual coded accounts in Guinness Mahon in Dublin. From 1978 it redeposited those funds in one large deposit account in its own name in Guinness Mahon and later in Irish Intercontinental Bank (IIB), the operation of which had been controlled by a secret ledger outside of the books of either bank and from which and to which the Irish clients could withdraw and lodge funds when they desired.
The late Des Traynor and Mr Padraig Collery, employees of Guinness Mahon, earned substantial fee income from the Irish business of Ansbacher (Cayman) Ltd.
The affairs of the company had been conducted in circumstances suggesting they were designed to defraud the Irish Revenue Commissioners. Mr Ryan found the company provided services to Irish residents from 1978 to 1995 through the secret ledger system involving secret lodgements and withdrawals.
Mr Appleby said the Tanaiste's view of the necessity for the appointment of inspectors was fortified by the fact that the company and its officers refused to produce any books or documents relating to its Irish operations. The inspectors would have powers to interview parties, including the Irish beneficiaries of Cayman trusts and companies, on oath in Ireland.
Ms Harney believed they were likely to have information and documentation concerning the activities of the company. She felt this was the only way to carry out a full investigation of the affairs of the company and to reach proper conclusions as to what extent the affairs of the company had been carried on or conducted for a fraudulent or unlawful purpose or in an unlawful manner.
Mr Ryan's view had been that the essence of the arrangements was that Irish residents could secretly place their funds offshore and ostensibly outside of their control while, in reality, retaining access to and control over them.
