The liquidator to Bula Resources, Mr Jim Stafford, is investigating the 2001 deal made by the company in Bahrain, according to his statement issued yesterday. The deal involved the payment of $1.5 million (€1.21 million).

Mr Stafford described the Bahrain deal as an "unusual transaction". The Office of the Director of Corporate Enforcement is also investigating the deal and Mr Stafford said he was co-operating with that office.

Mr Albert Reynolds, who was chairman of Bula at the time, told The Irish Times in March 2004 that he put up a significant part of the funds paid by Bula in the deal.

Mr Stafford said the agreement with the Al Thamer Establishment in Bahrain was signed in June 26th, 2001. He said the transaction should have been notified to the Stock Exchange at the time, but this did not occur "until February 6th, 2002, at which time it was stated that the investment was a 'refundable deposit'.

"The Al Thamer Establishment did not refund the money by June 27th, 2002. When contacted by the company subsequently, General Kamal of the Al Thamer Establishment said that the $1.5 million payment was not refundable. The company entered into negotiations with General Kamal on the matter and in February 2003 the company negotiated a settlement with Al Thamer and the company accepted a payment of $375,000 in full and final settlement. The book value of €937,500 shown on the statement of affairs represents the euro equivalent of the remaining monies." The amount has been given a realisable value of nil.