THE CENTRAL Bank is concerned that investment management company Custom House Capital may have taken money from client accounts without permission and used it to cover shortfalls in clients’ property investments.

It also emerged yesterday, as the High Court appointed Central Bank inspectors to investigate the firm, that some €10 million is believed to be owed to investors under one of its bonds.

The High Court appointed the inspectors following allegations of breaches of regulatory requirements in the sale of the property-related investment bond.

There is uncertainty over whether the capital reserves of Custom House Capital are adequate, Mr Justice Gerard Hogan noted.

Concerns also surround the possibility that equity unit trusts and cash unit trusts were improperly used to cover losses in property investments on behalf of clients.

The shortfall in relation to this may be upwards of €13 million, the judge said. Mr Justice Hogan yesterday confirmed the appointment of the inspectors to Custom House Capital, with registered offices in Merrion Square, Dublin.

The company reported to the Central Bank last March it had about €1.15 billion in assets under its management on behalf of clients. On Friday last, Mr Justice Hogan made orders appointing George Treacy, head of the Central Bank investments service providers supervision division, and Noel Thompson, an authorised officer within that division, as inspectors to Custom House.

The orders were made following an ex-parte (one side only represented) application by the Central Bank under the EC (Market in Financial Instruments) Regulations, 2007.

This was the first time such an application was brought by the Central Bank and the case was adjourned until yesterday to allow Custom House an opportunity to challenge the orders.

After the court heard there was no challenge, the judge confirmed the appointments and adjourned the matter until next week for preparation of the inspectors’ report.