A RETIRED senior manager with National Irish Bank has been disqualified by the High Court from involvement in the management of a company on grounds of unfitness arising from the findings of the investigation into the 1990s tax evasion scandal in the bank.

Mr Justice Roderick Murphy ruled that Frank Brennan of Ardglas, Dundrum, Dublin, was part of the bank's senior management that was responsible over the entire 10-year period of the NIB investigation for not just a "failure of control", but for "ignoring or facilitating tax evasion". The judge said he accepted Mr Brennan was "genuinely shocked" when he heard two RTÉ television exposes of bogus non-resident accounts and of fictitious accounts - "for which he bore no responsibility" - for the promotion of CMI (Clerical Medical Insurance) and other products.

However, to have learnt from RTÉ of two separate schemes of tax evasion unknown to him was, in itself, "indicative of a shortcoming in management and control", the judge remarked. Mr Brennan, with others, failed "to lead decisively and to organise effectively".

Mr Brennan had told other managers in 1995 of the need to change attitudes at branch level so that "possible tax evasion" could be eliminated "to the greatest degree possible", the judge noted. "In reality, the attitude of senior management needed to be changed to eliminate the lack of compliance, just as had been done by Mr Brennan in the elimination of fictitious accounts following the Criminal Justice Act 1994."

It was difficult to understand the persistence of non-compliance "unless there was a fear that the elimination of bogus non-resident accounts without being channelled into CMI-like products could result in a loss of business to the branches and of profitability to the bank".

While there was insufficient evidence to show Mr Brennan had breached his "duty" as an officer of a company under the Companies Act, the court was satisfied, as a result of the failure to supervise and control while a director and as senior general manager of the bank, Mr Brennan's "conduct" as an officer of the company was such as to to make a disqualification order appropriate, he ruled.

The judge was delivering his reserved judgment granting an application by the Office of the Director of Corporate Enforcement for a disqualification order under Section 160 of the Companies Act against Mr Brennan.

The judge will hear submissions from lawyers on May 21st before deciding the length of the disqualification period.

Mr Brennan becomes the third senior NIB official to be disqualified arising from the inspectors' report. Nigel D'Arcy, of Castledillon, Straffan, Co Kildare, has been disqualified for 10 years while Barry Seymour, former executive director of NIB from April 1994 to July 1996, has been disqualified for nine years.

Disqualification proceedings are pending against four other officials or directors, including former NIB chief executive Jim Lacey.

Yesterday the judge found Mr Brennan and other senior management failed to deal decisively with bogus non-resident accounts, the improper charging of interest and CMI policies.

He noted that while Mr Brennan was general manager-administration he had received a memo in 1994 from Geoff Bell, head of management services at NIB, and he therefore knew that CMI policies were being promoted to persons with "sensitive funds" with "confidentiality a prerequisite in investment".

Mr Brennan and others also failed to adequately control the implementation within the bank of provisions of the Finance Act 1986 despite instructions, memorandums and meetings relating to these issues, he added.

However, Mr Brennan had given "decisive" instructions relating to fictitious accounts and the court gave credit to him in relation to the elimination of such accounts, the judge added.

Mr Brennan had also been co-operative with the investigation, had not sought to minimise non-compliance and the court acknowledged his attempts to rectify or stop the misconduct.

The application arose from the investigation by the inspectors into the affairs of NIB and National Irish Bank Financial Services Ltd (NIBFS) between 1986 and 1996. The inspectors concluded in 2004 that NIB and NIBFS were involved in a number of improper practices and that Mr Brennan, as a member of senior management, bore responsibility for some of these practices. In opposing the application, Mr Brennan took issue with many of the inspectors' findings relating to him and argued it was unfair and unreasonable to attribute responsibility to him for "the malpractices of branch managers" identified in the report.

He had, of necessity, placed a high degree of trust in branch managers who were appointed by regional managers to carry out their responsibilities in an appropriate manner and his actions were reasonable having regard to the information in his possession at the time, he said.