Former National Irish Bank (NIB) executive director Barry Seymour has agreed before the High Court that he had not considered how the Revenue Commissioners would be paid the potential liabilities resulting from Deposit Interest Retention Tax (Dirt) not being deducted from certain accounts in the bank when it should have been.
While he was de facto chief executive of NIB between April 1994 and July 1996, Mr Seymour said he had not considered the issue of how the Revenue should be paid such liabilities, and had not informed the NIB board that a possible liability to the Revenue was coming down the tracks.
The bank's auditors, KPMG, had not indicated to him or the bank that they had any belief that a Dirt audit report of early 1995 showed, as the inspectors who investigated the affairs of the bank later found, that there was a widespread problem with bogus non-resident accounts, he said. Had KPMG indicated there was such a problem, it was unlikely it would have been ignored, he said.
He acknowledged he did not try to establish how many non-resident accounts had been opened in NIB branches when they should not have been.
He was aware from the audit report of early 1995 of significant issues of non-compliance within the bank and of failure to deduct Dirt from accounts. Mr Seymour said he had put in place measures to tackle these and other problems, but these did not solve the problems "overnight".
If a circular which he caused to be issued following a Dirt audit report of early 1995 had been adhered to "to the letter", the tax problem would have been resolved, he said.
He also said that 1994, when he was "parachuted" into NIB after the departure of Jim Lacey as chief executive, was a difficult year. He had inherited several problems, resources were greatly stretched and a report noted difficulties in maintaining controls within the bank. Business plans and improving market share were being demanded of him and there was also the issue of the proposed merger with TSB.
This was all accompanied by indications that all was not well within the bank in relation to the quality of its business.
Given all of that, he was aware his appointment was not going to be "a piece of cake", Mr Seymour said. He added that when he was approached about taking over at NIB, it was in terms of being asked to look after the bank for a few weeks.
Mr Seymour (67), of Beaumond, Amersham, Buckinghamshire, England, was concluding his evidence in the continuing hearing of an application by the Director of Corporate Enforcement (ODCE) to restrain him from involvement in the management of any company. The ODCE's application is based on the July 2004 findings of the inspectors who investigated the affairs of NIB and National Irish Bank Financial Services (NIBFS) over a 10-year period to 1998.
The inspectors concluded both NIB and NIBFS were involved in a number of unlawful and improper practices, including the opening and maintaining of bogus non-resident accounts which enabled customers to evade tax. The inspectors found that responsibility for the improper practices that existed "rested with senior management" of the bank during the period of the inspectors' investigation.
Yesterday, Mr Seymour agreed with Brian Murray SC, for the ODCE, that the Dirt audit report suggested that non-resident accounts had been opened in NIB branches when they should not have been. He agreed he had not sought to establish how many such accounts there were. It had not occurred to him to do so, Mr Seymour added.
The case continues before Mr Justice Roderick Murphy.
