The rift in small firms lobby group ISME deepened yesterday when some directors of its holding company insisted they had called in the Garda Bureau of Fraud Investigation before they knew of a motion to remove them.

The directors of ISME Ltd said the bureau had been written to on March 5th, asking it to investigate a EU-backed training scheme. They said a report in Wednesday's Irish Times made it appear they had only called in the fraud squad following the no-confidence motions. The directors said no motion had been tabled to that effect until March 12th.

Mr Terry Hobdell, one of the directors, said the first he had heard of any motion calling for a no-confidence vote in the directors had been earlier this week. Both he and other directors said there was "absolutely no connection" between the two developments.

However, former chairman and ISME Ltd director Mr Don Curry was adamant yesterday that the directors - who include Ms Irene Bergin, Mr Hobdell, Mr Eoghan Hynes and Mr David Dixon - were informed at a meeting on March 4th - one day before the letter was sent to the bureau - that a motion would be tabled to the national council calling for their removal. The national council comprises 41 members.

Mr Curry's recollection of events was supported by Mr Sean Hannick, an ISME member who was elected by the national council to serve as a director earlier this year.

The directors' meeting on March 4th was due to include seven new directors of ISME. They had been elected by the national council at a meeting in February. However, at the March 4th meeting, the new directors were told by the other ISME directors that the board could not be expanded by that number because the constitution did not allow it.

According to the new directors, the current directors had already agreed to the expansion of the board at the previous council meeting. There was consternation on March 4th when they were informed that it could not be expanded to 14. Several sources said exchanges between the two sides "were very hot and heavy".

Earlier that day at an e.g.m., the existing directors had sacked Mr Curry, one of the founding members of ISME. The directors declined to specify why they took this action yesterday. It is understood Mr Curry has since initiated legal proceedings on the matter.

A meeting of the national council will be held next week. A motion calling for a vote of no confidence in the four directors has been tabled for that meeting.

The directors said yesterday they had been working on a new constitution and structure for the organisation which would increase the number of ISME Ltd directors to 10. Seven of these could be elected by the national council.

Yesterday, Ms Bergin dismissed speculation, reported in Wednesday's Irish Times, that she had resigned as a director. Ms Bergin, in common with her fellow directors, resigned last year, but re-elected each other to the board last January.