The appointment of an authorised officer to two Dunnes Stores companies by Tanaiste and Minister for Enterprise, Trade and Employment Ms Harney was justified for several reasons, the High Court heard yesterday.

In an affidavit, Mr Paul Appleby, principal officer in the Department, said an authorised officer was appointed due to the disclosure that three cheques with a combined value of £180,000, which were signed by Mr Bernard Dunne in 1992 (and lodged to an account held by Carlisle Trust Ltd) had ultimately benefited Celtic Helicopters and the late Mr Des Traynor (the financial adviser who looked after the finances of former Taoiseach Charles Haughey).

He said Ms Harney's current concerns about Dunnes related to how a company could have had such loose management and financial structures which allowed the kind of behaviour exhibited by Ben Dunne in the McCracken report. Mr Appleby said other reasons for the appointment of an authorised officer to Dunnes Stores Ireland and Dunnes Stores, Ilac Centre Ltd, related to the findings of the McCracken tribunal and of the inquiries by authorised officers appointed to Garuda Ltd, trading as Streamline Enterprises (owned by former Fine Gael Minister Michael Lowry), Celtic Helicopters (owned by Mr Ciaran Haughey) and Guinness and Mahon Ireland Ltd.

Ms Margaret Heffernan, a director of the two Dunnes companies, has said in an affidavit that the appointment of the authorised officer confirmed her suspicion that the appointment was based on misunderstanding or misapplication of the law and was irrational or prompted by an improper motive. She said the reasons related to events which occurred when the company was under different stewardship.

Mr Dermot Gleeson SC, with Mr Richard Nesbitt SC, and Mr Ben O Floinn, for the Dunnes companies and Ms Heffernan, argued the appointment fell outside Ms Harney's statutory responsibility.

He was continuing his opening of Dunnes challenge to the decision of Minister Harney of July 22nd, 1998, to appoint an authorised officer to the two Dunnes companies.

The challenge by Dunnes had been heard by Mr Justice Kinlen in the High Court last April but both sides appealed his judgment to the Supreme Court, which found the judge had not dealt with certain issues raised and remitted the entire matter back to the High Court for rehearing. The action is now being heard by Mr Justice Butler and will last several days.

The hearing continues today.