The High Court has ruled former National Irish Bank chief executive Jim Lacey's conduct of the affairs of the bank was "grossly negligent".

The court ruled Mr Lacey should be disqualified from involvement in the management of any company on grounds of unfitness.

Mr Justice Roderick Murphy said he regarded various breaches of duties by Mr Lacey as chief executive and director of NIB between 1988 and 1994 as "grossly negligent" and was satisfied Mr Lacey's conduct fell below the required standard and "constituted a fundamental failure of governance".

He made those findings today in a reserved judgment granting the application by the Director of Corporate Enforcement for a disqualification order against Mr Lacey, Pine Haven, Grove House Gardens, Blackrock, Co Dublin, under Section 160 of the Companies Act.

The period of the disqualification order will be decided later.

Mr Lacey, who had strongly opposed a disqualification order, was not in court.

The director had argued the disqualification order was justified on the basis of the findings of the inspectors who investigated the affairs of NIB and NIB Financial Services between 1988 and 1998. The inspectors concluded the bank was involved in widespread tax evasion and had imposed unwarranted fees and interest charges on customers.

The director claimed there was "a catastrophic failure of governance" during Mr Lacey's tenure as chief executive and he must bear ultimate responsibility for "very serious wrongdoing" by the bank.

Mr Lacey had rejected the findings of the inspectors in relation to him as "fundamentally flawed" and claimed he discharged his responsibilities as chief executive "diligently and competently".

Since leaving NIB, Mr Lacey also said he was heavily involved in various management and advisory positions in the State and private sector, nationally and internationally, and had discharged his duties "without even a hint of criticism".

Among other positions, he was appointed chairman of the Irish Aviation Authority by the government in 1994 and was also appointed to the board of the Dublin Docklands Development Authority. He claimed he has a reputation as a businessman of integrity and competence and a disqualification order would have "the most serious reputational repercussions for me".

In his judgment today, Mr Justice Murphy said he had identified a number of breaches of duty by Mr Lacey who, the judge noted, had in his evidence tended to criticise and blame NIB branch managers while at the same time maintaining it was never highlighted that particular managers were actually falsifying documentation.

The judge found Mr Lacey's response to a range of matters, including matters raised in internal audit reports of the bank, in themselves indicated a failure. Mr Lacey had failed to follow up identified deficiencies notified to him and failed to react to concerns expressly communicated to him in a 1993 memo about Revenue consequences of non-disclosure.

The court had previously ruled, in the case of former NIB executive director Barry Seymour, that directors must familiarise themselves with the business of the company so as to carry out their duties, the judge said.

"The business of banking requires adherence to and compliance with statutory provisions relating to taking deposits. While directors may rely on delegating to others, there remains an ultimate responsibility (on the directors) to the discharge of the statutory obligations,” he said.

Mr Lacey had said he did not know senior NIB employees were communicating with each other about "hot money", was not aware what the bank's Financial Services Advisory Division was doing during his time at the bank and, had he been aware, would have stopped it. Mr Lacey also said he saw no reference to widespread tax evasion and was never presented with anything to support the conclusion there was widespread tax evasion.