Court reserves judgment on D'Arcy order

A High Court judge has reserved judgment on an application by the Director of Corporate Enforcement for an order restraining a former senior executive with NIB from being involved in the management of any company for a ten-year period.

Mr Nigel D'Arcy, who was involved in the NIB tax evasion scandal in the 1990s and was held by the inspectors who reported on the affairs of NIB to be "primarily responsible" for the continuation of a practice whereby insurance policies were used to hide funds undisclosed to the Revenue, is consenting to the order being made against him.

However, after hearing submissions on behalf of the Director yesterday, Mr Justice Peter Kelly said he wanted to consider a number of legal issues and reserved his decision.

He said he hoped to give a judgment within 14 days.

Applications by the Director for similar orders against eight other NIB former directors and managers, including former NIB chief executive Jim Lacey, will be mentioned before the judge on Monday.

Mr D'Arcy, of Casteldillon, Straffan, Co Kildare, was not in court yesterday when Mr Brian Murray SC moved the Director's application.

However, Mr D'Arcy was represented by Mr Paul Gardiner SC, who said it was not appropriate to make lengthy submissions, but asked the court to note Mr D'Arcy had from the first instance said he would not resist the application.

He had co-operated with the inspectors and the submisisons made against him by the Director were based on Mr D'Arcy's own evidence to the NIB inspectors.

Counsel added that there was "no denial of wrongdoing".

In his application, the Director alleged Mr D'Arcy engaged in conduct in relation to the affairs of NIB which makes him "unfit to be concerned in the management of a company".

However, as Mr D'Arcy was not a director of NIB and had consented from an early stage to the making of the order, the Director was recommending the order sought should extend for a period of ten years.

Mr Murray said the Director's application was entirely dependent on the July 2004 report of the inspectors which inquired into the affairs of NIB from 1998.

The crux of the Director's application regarding Mr D'Arcy related to his involvement with Clerical Medical Insurance (CMI) policies, counsel said. In evidence to the inspectors, Mr D'Arcy had confirmed he was aware the CMI personal portfolio was used within the bank for a purpose for which it was not intended and that the purpose behind the sale of CMI policies included the regularising of bogus non-resident deposits and finding a safe haven for Revenue-sensitive funds.

Mr Murray said the inspectors' report showed the strength of material before the inspectors. He said it was neither proper nor acceptable for persons to operate the affairs of a company in such a way as to facilitate others to evade their tax obligations in Ireland, particularly when the objective was to enhance profitability. It was of special concern these activities occurred in the context of a licensed bank which had been afforded very great privileges by the State.

The court was at large to impose whatever sanctions it thought fit but the Director was seeking a ten-year disqualificaiton period.