Ansbacher inspectors to publish letters from UK banks

The Ansbacher inspectors are to publish correspondence between themselves and two London banks that were criticised in their report.

The High Court yesterday ordered the correspondence between the inspectors and the two banks, Guinness Mahon and Co Ltd and its parent, Investec Bank (UK) Ltd, be published. Guinness Mahon is the former parent of Guinness & Mahon bank in Dublin.

It is understood the correspondence covers requests from the inspectors seeking co-operation from the London banks in relation to their inquiries, and the banks' responses to these requests.

The members of the boards of the two banks were cited in the inspectors' report.

The inspectors concluded that the directors "failed to co-operate as required under section 10 (2) of the Companies Act, 1990, and they issue a recommendation to the appropriate authorities that they consider whether an application should be made for a disqualification order, pursuant to section 160 (2)(e) of the Companies Act 1990".

The decision as to whether an application should be made for the disqualification of the directors from operating as directors in the Republic rests with the Director of Corporate Enforcement, Mr Paul Appleby.

It is not clear what the point of such an exercise might be, given that none of the directors is resident here.

The order made by the court yesterday is understood to have arisen following an application from the inspectors, who felt the correspondence should have been contained in their voluminous report, published two weeks ago. This could not be confirmed last night.

Both banks told the inspectors in correspondence that they had no wish to obstruct the work of the inspectors but were concerned not to breach any obligations they might have to customers or third parties.

The inspectors replied that what they wanted was not information about customers but about the organisation and governance of Ansbacher Cayman Ltd, the Cayman bank they were investigating.

The Cayman bank, formerly Guinness Mahon Cayman Trust, was formerly part of the Guinness Mahon group.

The inspectors were told during their inquiries that sterling lodgements made by Irish residents to their Ansbacher or Guinness Mahon Cayman Trust accounts were frequently made by way of the London bank.

An internal audit of Dublin bank Guinness & Mahon by Guinness Mahon in London in 1989 noted the existence of a "bureau system" on the Dublin bank's computer system that held details as to who owned what within the Cayman deposits in the Dublin bank.

"The Irish business of Ansbacher was conducted in or with the assistance of Guinness & Mahon, a subsidiary of Guinness Mahon London," the report noted. "The inspectors take the view that Guinness Mahon London cannot distance itself from its Irish subsidiary in such a way as to refuse to provide information relating to the way in which it conducted its business with Ansbacher.

"The inspectors are of the view that those who wish to take the benefit and protection of limited liability granted to companies by Irish law must respect the rules under which the limited liability system operates."

At the time, Investec said in a statement that: "The Directors of Investec Bank (UK) Limited have consistently acted in this matter within well-established banking practice and, in particular, within its obligation of banking confidentiality."