The Tanaiste and Minister for Enterprise and Employment, Ms Harney, is refusing to give Dunnes Stores reasons why she has appointed an authorised officer to inquire into the affairs of two of its companies, the High Court heard yesterday.
The Minister's move has inflicted "gratuitous and totally unwarranted" damage on the reputation of the Dunnes group, a company director, Mrs Margaret Heffernan, said in an affidavit.
She said the Dunnes companies, post-Mr Ben Dunne, should not be subjected to continuous raking over the coals.
Ms Justice Laffoy was also told the inquiry was the seventh of one sort or another into the affairs of Dunnes companies. The judge is hearing a challenge by Dunnes Stores (Ireland) and Dunnes Stores Ilac Ltd to the appointment of the officer. The two companies are seeking an order quashing Ms Harney's decision.
The legal proceedings have acted as a stay on the investigation.
In court yesterday, Mr Adrian Hardiman SC, with Mr Richard Law Nesbitt SC, for the Dunnes companies, said the present proposed inquiry was the seventh into the affairs of Dunnes companies since Judge Buchanan of the Circuit Court was appointed to carry out an inquiry.
Mr Hardiman pointed out that at one of the inquiries, the McCracken Tribunal, Mrs Hef fernan gave evidence and the former Taoiseach Mr Charles Haughey had also given evidence.
He said his clients claimed there was a relationship between previous inquiries and the present proposed one.
Following the appointment of an inspector, he [the inspector] had delivered to the Dunnes company what could only be described as an enormous and comprehensive list of documents which he required and which even extended to internal memos relating to internal telephone conversations.
Mr Hardiman said his clients had protested bitterly following the appointment of an inspector. Mrs Heffernan had requested the Minister to give reasons for the decision. "The focus of this case relates to the absolute stonewalling by the Department in relation to that request," counsel said. "The Minister has taken up the position that there is no obligation to give reasons for this appointment and that no reason would in fact be given."
It was central to his client's case that the appointment in itself and all the circumstances in which it took place was clearly one which required the giving of reasons, not least so that his clients might have some opportunity to address the appointment and the necessity for it.
Counsel added that his clients were claiming privilege for a report prepared on their behalf by the accountancy firm of Price Waterhouse.
The purpose of that report had been for Dunnes Stores' use in court proceedings.
He read an affidavit from Mrs Heffernan, who said it was unacceptable that the Minister's officials should suggest that privilege be waived in relation to the Price Waterhouse report.
Mrs Heffernan challenged the necessity of appointing an officer and said she was forced to conclude that the Minister's action was "misconceived".
She said the Minister's appointment of an authorised officer did gratuitous and totally unwar ranted damage to the reputation of Dunnes Stores and had left the applicants with no alternative but to take the current proceedings.
In another affidavit, Mr Patrick O'Donoghue said he was group financial controller with Dunnes Stores and was appointed to that position some months before Mr Ben Dunne had left.
He was concerned with the day-to-day affairs of the company and said some 30,000 documents were generated weekly regarding its business.
There appeared to be an attempt by the defendants to conduct a "general trawl" through the books and records of Dunnes Stores over 10 years. He said the very wide nature of the demand for documents made it very difficult to assist the request for information.
The hearing resumes today.