The decision of the Tanaiste, Ms Harney, to seek an extension of the remit of the two inspectors already inquiring into NIB, could lead to the naming of hundreds of the individuals who invested funds in offshore bonds.
The High Court has agreed to hear an application by Ms Harney on Monday that Mr Justice John Blayney and Mr Tom Grace, two inspectors already inquiring into matters concerned with NIB, should also inquire into the sale of £48 million worth of offshore bonds by the bank.
The inspectors were appointed on March 30th under section 8 of the 1990 Companies Act, to investigate allegations that the bank had been involved in interest loading and fee loading on customer accounts. Yesterday Ms Harney said an interim report she has received on the sale of offshore bonds by the bank, from an authorised officer, Mr Martin Cosgrove, has led her to believe the sale of the offshore bonds should also be investigated by the section 8 inspectors.
Section 8 is the most powerful of the sections covering investigations into matters of company law. Upon receiving a report from section 8 inspectors, the High Court can make a number of directions including causing the report to be published. However, the court may also, where it thinks it proper, direct that a particular part of the inspectors' report be omitted from the published version.
There was no comment on the latest development from an NIB spokesman last night, other than to say the bank was "considering the situation" following the Tanaiste's latest move.
The bank has consistently stated that there is no evidence that the sale of Clerical Medical International (CMI) offshore bonds by its financial services section, was "conceived and launched" in order to assist people evade tax.
The bank is conducting its own inquiry into the sale of £33 million worth of CMI "personal portfolio" bonds, involving 200 portfolios. Mr Cosgrove, the authorised officer appointed by Minister of State for Enterprise, Trade and Employment, Mr Noel Treacy, is inquiring into all offshore insurance products sold by the bank.
Products sold include other CMI products, as well as Scottish Provident International, (Isle of Man) and Old Mutual International (Guernsey) products. The total amount involved is £48 million and the total number of policies is 499. Of these 43 were sold to non-residents and 38 were sold as unit trusts. These latter do not come within the scope of the officer's remit.
Mr Justice Blayney and Mr Grace are due to supply the High Court with an interim report on June 22nd. They are not expected to produce a final report for some months.
Ms Harney said yesterday she was pleased the High Court had agreed to hear her application on Monday next. She said she wanted to make it clear that her decision to petition the court in no way demonstrated an unhappiness with the assistance given to Mr Cosgrove.
"On the contrary, he has acknowledged in his report that full co-operation had been given to him by the company, subject to any legal restrictions by which it was bound. My decision to petition the court merely reflects my view that this is the most effective means of completing the present investigation."
The Tanaiste stated that her legal advisers had previously warned against taking this course of action before the completion of the authorised officer's interim report into the NIB's offshore bond schemes.
She rejected an allegation by Mr Pat Rabbitte, of Democratic Left, that the original petition to the courts, for the appointment of the two inspectors, had omitted to include the NIB subsidiary which sold the offshore bonds.
Commenting on the impending hearing, Ms Harney said it now makes sense for the two inspectors to have the powers to talk to the people who invested in the scheme and the bank officials associated with it.
