MMI Stockbrokers has been pushed into liquidation because of money owed by its clients understood to total several million pounds more than the firm's own liabilities of £14 million.

While initial indications are that client funds in MMI are safe, the hopes of the company's business creditors now depend on whether MMI clients will repay the money owed.

The provisional liquidator, Mr Tom Kavanagh of Kavanagh Accountants, said it was too early to comment last night.

The High Court was told that the company's main asset was its creditors and that its liabilities were £14 million. The sums owed to MMI by its 5,000 clients - and owed by the company - are much greater than thought when K&H, a London broking firm, took over the company last December and illustrate the high extent of dealing in which the firm was engaged on behalf of clients.

K&H, the court was told, is itself owed £8 million and other creditors are understood to include other London brokerage houses, with which MMI entered share purchase deals.

The sharp fall in oil price shares - particularly shares in Dana Petroleum - pushed MMI into difficulties late last year. The fall left many of MMI's clients who had ordered shares - but only paid a portion of the cost - out of pocket, and led to them refusing to pay the money they owned to MMI for the shares. In a statement yesterday, MMI said "the situation we inherited was worse than we had expected and led, eventually and unfortunately, to the director's decision to close". The Central Bank of Ireland was informed of the director's court application and directed the firm to cease trading. The bank said that as regulator, its priority is the protection, as far as possible, of client interests. According to the Central Bank, it has been actively monitoring the firm's operations since the K&H takeover in December and has been fully aware of the firm's lack of success in recovering outstanding debts.

The Central Bank said it will continue to oversee the situation in the interest of the firm's clients. It also pointed out that Money Markets International, which is a moneybroking firm, is a separate legal entity from MMI Stockbrokers and is not affected by the appointment of the provisional liquidator.

Clients who are owed money by MMI should not be affected by the provisional liquidation, once it is established that their funds are in order. If there is a problem any clients owed money will be entitled to recoup funds to the value of up to €20,000 (£15,751), under the investor compensation fund. However, sources said that the client accounts appeared to be in order and had been supported by the capital injection of £2.3 million from K&H.

MMI Stockbrokers has its headquarters on Lower Baggot Street in Dublin. It was founded by Mr Oisin Fanning, Mr John Curran and Mr Paul Boucher. These directors left the company last year and a week ago Mr Tim Murphy, who had taken over the managing director in the wake of the K&H move, resigned.