Reasons given by Tanaiste, Ms Harney, for her decision to appoint an authorised officer to two Dunnes Stores companies were mostly based on the McCracken report, including its findings that an extension to former minister, Mr Michael Lowry's Tipperary home in the 1980s was financed by Dunnes Stores, the High Court heard yesterday.

There is "total duplication amounting to harassment" between the authorised officer's investigation and the Moriarty tribunal, Mr Adrian Hardiman SC, for Dunnes, argued. This was unfair, unreasonable and inappropriate.

He said all the factual matters advanced by the Minister as reasons for the appointment - on foot of a court order - related to the stewardship of Dunnes Stores by Mr Bernard Dunne. There had been a formal settlement of legal proceedings related to disputes between Dunnes' directors over that stewardship.

Because the company had been abused and misused by persons previously in charge of it, this did not justify the appointment of an authorised officer years after the event, counsel said.

All the evidence was that every step had been taken by the present Dunnes management to rectify "historic irregularities".

He asked the court to infer that the reasons put forward were not the real reasons for the appointment of the authorised officer and therefore the appointment should be quashed. He suggested the reasons were put together only after the court ordered the Minister to give reasons. If they were the real reasons, none of them was precluded by Section 21 of the Companies Act from being disclosed - as Ms Harney had insisted they were - at the time the authorised officer was appointed in July 1998, counsel said.

Once the Minister was compelled to give reasons, the reliance she adopted on Section 21 as preventing disclosure of the reasons was exposed as a pretext, counsel said. The matters referred to in the reasons were in the McCracken report, a public document, or had been disclosed by Dunnes Stores itself.

Mrs Margaret Heffernan, a director of Dunnes Stores, said in an affidavit the reasons outlined had "confirmed what I had long suspected" - namely that the Minister's appointment of authorised officers was not because an investigation was justified or necessitated under Section 19 of the Companies Act.

Rather, Mrs Heffernan said, the investigation was "based on misunderstanding or misapplication of the law and was irrational or prompted by an improper motive".

"In particular, the reasons identified by the Minister fall far outside the matters for which she has statutory responsibility. They relate to events which have been well known for a considerable time."

The affidavit from Mrs Heffernan and a document outlining the reasons for the appointment of an authorised officer to Dunnes Stores Ireland Company and Dunnes Stores Ilac Centre Limited were read to the court on the third day of a challenge by both companies and Mrs Heffernan to the decision of Ms Harney to appoint the officer.

Much of yesterday's hearing was taken up with reading correspondence relating to requests from Ms Harney, her Department officials, the authorised officers to the Dunnes companies and authorised officers to Garuda Limited - trading as Streamline Enterprises - and Celtic Helicopters for documents from Dunnes which were said to be required for their investigations and the company's replies.

Mr Hardiman said this correspondence demonstrated the high level of co-operation evinced by Dunnes towards the authorised officers and the company's compliance with virtually all of the "excessive" requests made upon it.

In the statement of reasons for the appointment of the authorised officer, it was said circumstances outlined in certain of the McCracken tribunal findings as well as information from Dunnes regarding payments totalling £180,000 drawn on a Dunnes Stores account which benefited Celtic Helicopters and Mr Desmond Traynor gave cause for concern as to standards of corporate governance operating in Dunnes Stores and made it necessary to examine the books and records of the companies. The reasons also referred to a McCracken report finding that payments of £395,107 to finance Mr Lowry's home extension were to assist Mr Lowry in evading tax.

The hearing continues today.