Mr Kelly Martin, the chief executive of one of the Republic's biggest pharmaceutical companies, Elan, has said that he has no knowledge of an alleged $43 million (€37.97 million) embezzlement by a senior trader who worked in Mr Martin's division of the Merrill Lynch trading company three years ago, writes Sean O'Driscoll in Washington.

A special prosecutor's office in Edmonton, Canada, has confirmed to The Irish Times that it is assisting Canadian police with an ongoing investigation into an alleged $43 embezzlement by Mr Daniel Gordon, who headed Merrill Lynch's Global Energy Markets (GEM) section.

GEM was under the Merrill Lynch division controlled by Mr Kelly Martin, who was head of global debt markets.

Mr Martin left Merrill Lynch last December and is now chief executive of Elan.

The amount involved in the Gordon case makes it one of the largest cases of alleged employee embezzlement ever investigated by US government attorneys.

Mr Martin told The Irish Times that there were 3,000 people in his division and that Mr Gordon was not under his direct control.

"He didn't work for me directly but he did work for a short time in this energy trading and hedging business.

"So, I know of him but I don't know him directly or well. I was in several meetings with him but I don't know him intimately well," he said.

A spokesperson for the Canadian police confirmed that Mr Gordon has not been charged with any offence but said that the investigation was ongoing.

Although the money was allegedly moved from a Merrill Lynch account in New York, Canadian police are investigating because it was allegedly routed through Canada to an account in the Caribbean.

The US Attorney's Office in New York had also confirmed that it has collected statements from witnesses.

In court documents lodged in Canada, assistant US attorney Ms Jane Levine said that the proper safeguards did not appear to be in place in the trading section where Mr Gordon worked.

She alleged that Mr Gordon moved the money to the Caribbean by disguising it as an energy trade.

A Maryland firm that purchased GEM two years ago is now suing Merrill Lynch for $605 million. The firm, Alleghen Energies, has claimed that Merrill Lynch hid its knowledge of Mr Gordon's activities.

However, in court documents, Merrill Lynch has said that it was the only party that suffered a loss as a result of the alleged embezzlement.

Speaking from his New York office, Mr Martin said that another Merrill employee was supervising Mr Gordon's risk management.

"I was in charge of the division, but it's a division of 3,000 people. Daniel Gordon worked as part of Global Derivatives - that was one of the business units that reported to me," he added.

He described Mr Gordon as a talented trader but said that he could not have supervised his trades directly.

"The capital market business is pretty complex. I think that Merrill Lynch has always had good controls.

"If someone wants to do something wrong, it's hard to control it," he said.

"If someone is going to do something that is totally wrong, you can't put processes in place.

"You assume you don't hire dishonest people," he added.

"I think that Merrill Lynch and all these capital market firms are pretty well run from a risk management point of view," he added.

Mr Martin said that he was now out of the trading business for more than two-and-a-half years.