The High Court gave the go-ahead for the seventh external investigation of National Irish Bank when it appointed two inspectors to examine the affairs of National Irish Bank Financial Services Limited (NIBFSL) yesterday.
Accountant Mr Tom Grace and Mr John Blayney SC, the former Supreme Court judge, were appointed under Section 8 of the Companies Act 1990.
The court was using its powers to, on the application of the Minister, appoint an inspector to investigate the affairs of a company. To do so it must be satisfied there are "circumstances suggesting" the company's affairs have been run in such a way as to defraud creditors or otherwise operate for a fraudulent or unlawful purpose or in an unlawful manner.
The terms of reference for an inspector are a matter for the court and the court has given direction to the NIB inspectors. An inspector has extensive powers - more than an authorised officer - and may examine officers and agents of the company concerned on oath. An inspector can seek documents and require explanations of the contents of those documents. A refusal can lead to contempt of court proceedings.
The inspector reports to the High Court in the first instance and his or her report may be published irrespective of the wishes of the bank. The two NIB inspectors have been directed to furnish their interim report by August 5th. As well as the inspectors' investigation into its affairs, NIB is also subject to investigations by the Central Bank, the Gardai, Mr Cosgrove (as authorised officer under the Insurance Acts), the Revenue Commissioners and the Director of Consumer Affairs.
Aside from the two inspectors currently investigating charges of interest loading and overcharging at National Irish Bank - and now looking into the sale of offshore bonds by the bank - Section 8 inspectors have previously been appointed to Siucre Eireann in 1991 and CountyGlen in 1993. Both these appointments were preceded by investigations carried out by lesser officers.
The appointment of the inspectors to NIB was the first time inspectors had been appointed without a preliminary inquiry.
The Siucre Eireann investigation cost in excess of £1.2 million while the CountyGlen investigation cost more than £200,000.
