National Irish Bank (NIB) has taken a High Court challenge to another investigation into the company's affairs. It is challenging an investigation by the Comptroller and Auditor General, Mr John Purcell, into NIB's compliance with DIRT (Deposit Interest Retention Tax).
Mr Justice Peter Kelly yesterday fixed March 1st as the date for hearing of the application, taken by NIB and National Irish Bank Financial Services Limited (NIBFSC). The judge was earlier told by Mr Richard Law Nesbitt, for NIB and NIBFSC, that his clients were applying to be relieved of "certain investigations taking place".
It is understood counsel was referring to the investigation by the Comptroller and Auditor General into compliance with DIRT and that NIB takes the view that, as the issue it is already been investigated by court-appointed inspectors and others, this additional investigation is unnecessary.
On the application of Tanaiste and Minister for Enterprise and Employment, Ms Mary Harney, the High Court last year appointed two inspectors - accountant Mr Tom Grace and retired Supreme Court judge Mr John Blayney - to inquire into the affairs of NIB.
The appointments were made following the improper charging of interest and fees by the bank over a 10-year period to 1998. The inspectors are also investigating whether any unlawful or improper practices existed in the bank since 1998 which served to encourage the evasion by NIB of its obligations under the revenue laws.
The inspectors are seeking time to put in replying affidavits to the NIB application, Mr Nesbitt said. He said both sides were consenting to the application being adjourned for two weeks.
Mr Donal O'Donnell SC, for the inspectors, said the matter was of some urgency.
Mr Justice Kelly said he would fix the application for hearing on March 1st and said the papers should be lodged by the Thursday prior to that date.
Emmet Oliver adds: The Comptroller and Auditor General, Mr John Purcell, was empowered under the Comptroller and Auditor General and Committees of the Houses of the Oireachtas Act to investigate the collection of DIRT tax by the Revenue Commissioners.
The act was brought before the Dail by the Government after the Committee of Public Accounts, which undertook the initial investigation into the AIB DIRT affair, requested additional powers for Mr Purcell's office.
The AIB DIRT affair involved a claim, published in Magill magazine, that AIB paid £14 million (€15.93 million) in DIRT liabilities, when its actual liability was closer to £100 million. This claim was made on the basis of audit material written by the bank's former internal auditor, Mr Anthony Spollen in 1991.
Mr Purcell, under the act, has the right to examine records in AIB and other financial institutions, including NIB, and to take evidence from witnesses on oath. His investigation was expected originally to conclude about now, but this legal challenge may mean it is delayed for some time.
The claim by AIB that the problem of bogus non-resident accounts was an "industry wide problem" prompted the Government to give Mr Purcell powers examine all financial institutions.
Where it is necessary for Mr Purcell to access the accounts of private individuals held in financial institutions, he may, under the Act, appoint auditors for the task.
While individual account holders in these institutions may not be identified in Mr Purcell's report or otherwise, a section of the Act provides that details can be furnished to the Revenue Commissioners where he finds prima facie evidence of irregularities in income tax payments.
