A report on the National Irish Bank/Clerical Medical Insurance offshore insurance scheme has still not been received by the bank's board 18 months after the scandal broke, the bank's deputy chairman, Mr Alex Spain, revealed yesterday.
Mr Spain, who was chairman of the bank until last January, told the DIRT inquiry he could not comment on the scheme, which involved money being invested with the Isle of Man-based insurance company, because it continued to be under investigation.
The scandal is also being examined by High Court-appointed inspectors, the Revenue Commissioners and the Garda.
"I will only form a view on everything that happened in relation to CMI when a comprehensive report on the subject is presented to the board, and that has not happened," he said.
Mr Sean Ardagh TD asked Mr Spain about a series of phone calls from Department of Finance and Revenue officials in 1993. They were "clearly unhappy about the alleged actions of a number of bank officials".
Mr Ardagh was quoting from a 1993 internal memo from the head of finance, Mr Gerry Hunt, which noted the phone queries and that it was "difficult to explain" an increase in non-resident funds from £80 million to £110 million over 12 months. Mr Hunt was further quoted as saying that he was "now convinced that the Revenue will commence detailed audits of the major banks in 1994 with particular attention on non-resident accounts".
Mr Spain, who was also head of the bank's audit committee, was asked whether he knew about the phone calls. He replied that the committee "would never be drawn into what is happening on a day-today basis in the bank".
The commmittee, he added, was not made aware that there was a possibility of Revenue audits nor that, as the memo cited, the British Inland Revenue made claims for negligence based on inadequate documentation on NIB's sister bank, Northern Bank, in 1990. Both banks are owned by the National Australia Bank (NAG) group.
Mr Spain was also asked his opinion of a series of recommendations on non-resident accounts, one of which noted that other NAG group banks were sending "major non-resident accounts" offshore to reduce documentation risks.
"We should consider doing likewise for major non-resident accounts," the note stated, following a 1994 audit which found considerable documentation deficiencies.
Mr Spain said the matter had been investigated and Mr Don Price, chief executive, would provide an explanation. Mr Price is expected to be asked about the matter when the hearings resume on Tuesday.
Mr Spain added that the 1998 Theme Audit had not been prompted by a letter from Mr Padraig O Donghaile, a chief inspector of the Revenue Commissioners, who had written to the bank before February 1998, looking for a breakdown on deposits.