Cost of NIB investigation tops £1.5m in two years

The investigation into National Irish Bank (NIB) by two High Court inspectors has cost about £1.5 million (€1.9 million) to date and may continue for most of this year.

One of the two inspectors, Mr Tom Grace, a senior partner with PricewaterhouseCoopers, is receiving £210 an hour (excluding VAT) for his work on the inquiry.

At that rate, he earns £1,680 in an eight-hour day, significantly more than the senior counsel working for the Flood and Moriarty tribunals.

Mr Grace's colleague, Mr Justice John Blayney, is being paid a salary equivalent to that of the President of the High Court - about £100,000 a year, according to documents released by the Department of Enterprise, Trade and Employment under the Freedom of Information Act.

This is made up of payments which Mr Justice Blayney, a retired Supreme Court judge, would receive anyway in his pension, plus a "top-up" in relation his work as an inspector.

As previously reported, some accountants from PricewaterhouseCoopers taken on to assist in the NIB inquiry are being paid more than £1,000 a day.

The Department of Finance has expressed concern about agreeing such high fees in an investigation which could continue for some time, though the Attorney General's office has expressed an opinion that the money could be recouped from NIB.

The inspectors were appointed to NIB in March 1998 to investigate allegations of overcharging by the bank. In June 1998, they were appointed to NIB Financial Services to investigate the marketing of unauthorised offshore bonds by that company which, it is alleged, were used by persons hiding money from the Revenue. The inspectors' inquiry has been delayed by court actions taken by NIB and by some of its managers, and it is not known when it is due for completion.

A list containing hundreds of names linked to the controversial offshore bonds has been given by NIB to the Revenue. It is conducting inquiries into these people's affairs to see if they have undeclared sources of income and whether the money invested in the bonds had been declared.

NIB profits last year were significantly affected by costs incurred by the inspectors' investigation. The bank set aside £3.7 million to meet legal costs, in addition to the £1 million provision made in 1998.

The bank's pre-tax profits were up 36 per cent to £18.7 million.