In an urgent application to the High Court late yesterday, the Central Bank took the first steps to require an investment intermediary, Mr James McGuire, of Main Street Carrick-on-Shannon, Co Leitrim, to comply with directions it had issued to him.

The application will be heard in full in the High Court on Monday.

Counsel for the bank said certain concerns had arisen about investors' funds, which had led to an inspection of the business by the bank. The result was the issuing of a number of directives to Mr McGuire in December 1999.

The bank said these directives were not complied with and had to be renewed on a number of occasions.

On June 13th, at a meeting between the bank and Mr McGuire, documents were produced by Mr McGuire in purported compliance with the directives, the bank said.

The bank, in particular, was very concerned in relation to the date and authenticity of one of the letters furnished. The letter had been examined by experts and there were serious doubts about its authenticity, the judge was told.

On June 27th, Mr McGuire was issued with further directives and was asked to explain the difficulties with this particular letter. He was required to reply to this letter by 2 p.m. yesterday.

He was warned that if he failed to do so the Central Bank would make an application to the court to require compliance with its directives.

Last night, Mr McGuire, a well known auctioneer as well as an insurance agent in Co Leitrim, insisted that the Central Bank action was "an awful lot about nothing".

Mr McGuire (67) was a tied investment agent of the EBS for 22 years. He had resigned his agency on ill-health grounds in recent days, the society confirmed.

Mr McGuire said it was very unfair and damaging to him that he had received no warning that the bank was taking court action. He insisted that his business was run in accordance with the regulations.

Mr McGuire said he had placed some £4.5 million (€5.7 million) to £5 million in investment business with the EBS building society. He insisted that there was no problems with his investment business.

He suggested that the Central Bank action may relate to two client amounts of £20,000 and £10,000 which he had held in his own account some years ago pending decisions by the clients on what investments they wanted to make.

He had corrected errors when they were pointed out by his accountant, he said. He said money invested in the Isle of Man for the EBS, which was queried by the Central Bank, "was fully checked out".

Asked why he did not respond to the Central Bank directives, he said he was in hospital around that time. "My only mistake was not replying to those letters," he said.

At the High Court yesterday, Mr David Barniville, for the Central Bank, said he was seeking leave to apply to the court on Monday under the Investment Intermediaries Act 1995, seeking confirmation of certain directives given by the bank to Mr McGuire.

Counsel said the bank was the supervisory authority for investment intermediaries in the State. Mr Barniville said the bank had "very grave concern" about investment funds given to Mr McGuire and this had led to its application.

Under the Investment Intermediaries Act 1995 the Central Bank is the supervisor for brokers who take in investment funds from the public. Under section 21 of the Act, it is empowered to impose directives in situations where it is concerned that investors' funds need to be protected.

The decision to fast-track the application to the court in this case, rather than go through the normal legal process indicated that the bank considers the case is serious enough to warrant urgent attention.