COMPLAINTS about the New York branch of Allied Irish Banks are being examined by the New York State banking department.

Last night, AIB played down the complaints made to the regulatory authority by investors who bought units in the Ashford and Dromoland Castle developments in Ireland.

Stating that the complaints were put to the bank at a regular meeting with the banking department recently, a spokesman described them as "devoid of merit".

It is the duty of the regulatory authority to examine any complaint made, he said. "All this means is that an investor has complained," he said. "We are not concerned."

The examination was confirmed to The Irish Times by the regulatory authority.

Some investors in the Ashford and Dromoland developments have taken legal action in the US against the AIB group and other defendants. AIB group chief executive Mr Tom Mulcahy has said the bank will vigorously defend the investors' claims. "We are happy to let it go to court. We have no interest in settling it at any price at all."

A spokeswoman for the authority said complaints "were received from individuals who had invested in several real estate ventures in Ireland. AIB New York branch was involved in the transactions and is a defendant in a lawsuit brought by the investors. Accordingly, our department is reviewing the investors' complaints".

The examination comes as more investors in the Ashford and Dromoland developments have sought to add their names and claims to the lawsuit being taken in New York. Some 15 names were added to the list of investors suing the bank in documents lodged at the US Federal District Court in the eastern district of Brooklyn on February 29th. The judge is expected to decide on April 1st if the additional plaintiffs can be added to the case, which started in 1994.

With the addition of these investors, including five members of the Dunfey Irish American hotel family, the total claims of the 45 investors have risen to $100 million (£63.6 million), according to the documents. The claims include punitive damages of $31 million.

Disputing these figures, AIB said its legal advice was that the maximum claim investors could make was "in the area of hundreds of thousands of dollars".

The case arises out of the conversion of Ashford and Dromoland castles into luxury hotels and the sale of units in the castles to individual investors.

The plaintiffs allege the schemes to sell the units to investors were fraudulent. They allege that the defendants used "stand in" investors, to make up the minimum number of investors required before the schemes could proceed. They allege AIB did not disclose its ownership of Ashford or its role as loan provider to investors. They allege "improper diversions" of the hotels' revenue to repay money put in by the stand in investors.