Request for NIB scandal papers refused

The High Court has refused to grant an order permitting Paul Appleby, the director of corporate enforcement, to get a wide range of documents from the inspectors who investigated the National Irish Bank tax evasion scandal during the 1990s, documents which were not included in the inspectors' final report.

The director had sought the documents to answer defences to proceedings brought by him under Section 160 of the Companies Act 1990 aimed at restraining eight former NIB executives and other officials from being involved in the management of any company.

Mr Justice Peter Kelly yesterday ruled that the application for documents would essentially involve the inspectors in a "mammoth task" of revisiting their entire six-year investigation into NIB, would place an "oppressive burden" on them and would not be beneficial to the conduct of other investigations under the Companies Act as it could lead to an "endless obligation" on inspectors to revisit their "final" reports. A final report was just that, he stressed.

The judge also noted that many of the documents could be obtained from either NIB or from the eight former directors and other employees of NIB and NIB Financial Services Ltd (NIBFSL) whom the director wants to disqualify.

The eight are: Mr Jim Lacey, Pine Haven, Grove House Gardens, Blackrock, Co Dublin; Mr Barry Seymour, Beaumond, Amersham, Bucks, England; Mr Dermott Boner, Chesterfield Avenue, Castleknock, Dublin; Mr Michael Keane, Corr Castle, Howth, Co Dublin; Mr Frank Brennan, Ardglass, Dundrum, Dublin; Mr Tom McMenamin, College Grove, Castleknock, Dublin; Mr Patrick Byrne, St Helen's Road, Booterstown, Co Dublin, and Mr Kevin Curran, Avondale Court, Blackrock, Co Dublin.

The documents sought by Mr Appleby include any documents relevant to the inspectors' adverse findings against the eight respondents, transcripts of interviews between the eight respondents and the inspectors, and any documents relating to responsibility for the various practices within the bank identified by the inspectors.

The inspectors, Mr Tom Grace and Mr John Blayney, had opposed the director's application, saying it would involve them in a very lengthy and costly "mammoth task". Several of the respondents also opposed it.

In his reserved judgment yesterday, Mr Justice Kelly said the inspectors had delivered their "final" report into NIB in July 2004 and that report was published on the order of the court. The report made serious findings of improper practices in NIB and NIBFS which had the effect of facilitating tax evasion and the levying of unwarranted fees and interest charges.

It was on foot of that report that the director was seeking disqualification orders. He argued that the respondents sought to challenge certain of the inspector's findings and that was why he must have access to the documents.

Mr Appleby was entitled to adduce whatever relevant evidence he wished in support of the disqualification proceedings, the judge said. He noted the inspectors had correctly said that many of the documents should be either in the possession of the eight respondents or NIB itself.

However, the director was also seeking documents relevant to the inspectors' finding that responsibility for the improper practices in NIB rested with senior management rather than branch managers. The inspectors argued the issues were so broad that they concerned the overall operation of the bank.

Part II of the 1990 Companies Act provided for inspectors to report to the High Court on their investigation and to make a "'final report" to the court. In this case, the inspectors had submitted their final report on April 19th 2005. Mr Justice Kelly said the inspectors were correct to argue there is a need for finality in investigations. The Act did not envisage some form of "rolling process" where inspectors might be asked to revisit all of the documents in their possession in order to identify which documents support particular findings made by them.

Inspectors were not evidence gatherers but investigators, he said. When they produced a final report, they should not be asked to conduct further work for others. If the court allowed the director's application, the respondents might also seek similar access to other documents which they might perceive as helpful to their arguments. This could give rise to "an almost endless obligation" on the inspectors. The judge adjourned the matter for two weeks .