The official liquidator to MMI Stockbrokers, Mr Tom Kavanagh, has said people who lost money and are seeking compensation from the Investor Compensation Company Ltd (ICCL), will not have to wait until the liquidation process is completed.

Some 300 people are seeking compensation from the ICCL as a result of the collapse of MMI Stockbrokers Ltd. They have been waiting for more than a year for their money and still don't know when they will be paid.

The ICCL was set up to protect small investors and the collapse of MMI Stockbrokers Ltd is the first case being dealt with under the scheme. The Act which established the ICCL provides for the appointment of an administrator who must certify losses to the ICCL before it can make payments to claimants. In the case of MMI Stockbrokers Ltd the administrator is Mr Kavanagh.

The Investor Compensation Act provides that when a determination is made that a particular company falls within the scope of the investor compensation scheme, claims must be lodged within five months of that date. The claims then go to an administrator who must confirm the loss. When that is done the ICCL must pay out within 3 months.

What has happened with ICCL is that no confirmations have yet been issued by Mr Kavanagh. He

has been engaged in a court action which has recently been abandoned. "Things are moving now. There are complications but things are moving. I don't have to wait until the end of the liquidation before certifying the more straight forward cases," he told The Irish Times.

A spokesman for the ICCL said he did not believe the absence from the compensation scheme of a time period within which an administrator must certify a loss, is a flaw. "It is hard to know what the alternative could be. How could an administrator who is not the liquidator certify a loss if he is not familiar with the company's records?" In relation to MMI Stockbrokers the spokesman said the ICCL had been in contact with Mr Kavanagh and had been putting pressure on to have the matter dealt with. He believed Mr Kavanagh would now have more time to concentrate on the issue, given that the fraud case Mr Kavanagh had taken against former directors of MMI Stockbrokers, has been dropped.

One claimant who spoke to The Irish Times conducted one transaction with MMI Stockbrokers following which he was issued with a cheque for £7,000 which subsequently bounced. "The compensation scheme is not all it's cracked up to be," he said. "The scheme should ensure people are out of pocket for as short a time as possible, but it is just not working.

"When I made my claim I was told it would take two weeks but now it's a year. It's just dragged and dragged and dragged."

Under the scheme claimants can receive 90 per cent of their net loss or €20,000, (£15,751), whichever is the lesser. It is understood many of the 300 claims submitted in relation to MMI Stockbrokers are for less than the maximum. The closing date for claims was March 31st last year.

Once claims are verified they may be paid out by the ICCL, which can be later recompensed pro rata from funds allocated to the claimants by the liquidator once the liquidation is completed and if creditors are receiving a payment.