Former National Irish Bank chief executive Barry Seymour told inspectors who investigated the affairs of NIB that he believed non-compliance problems within the bank related to tax avoidance were "an industry wide problem" with other banks similarly affected, the High Court heard yesterday.
However, Mr Seymour disagreed with the inspectors' finding in their report of July 2004 that he should have been aware, when he was in charge of the bank from 1994 to 1996, that there were widespread problems with bogus non-resident accounts.
He said he would like to think that, at that time, NIB was "the one bank" which was attacking the non-compliance problem.
He said a November 1994 Dirt team audit report did not use the word "bogus" in relation to non-resident accounts and also did not state that the problem was widespread within the bank. If he had seen that word, his approach might have been different.
The word fictitious was referred to. He had put measures in place to tackle the problems of non-compliance.
Mr Seymour (67), of Beaumond, Amersham, Buckinghamshire, England, is opposing an application by the Director of Corporate Enforcement to restrain him from involvement in the management of any company arising from the findings of the inspectors' report. He said he was not aware there was a problem with non-compliance until the audit was carried out in November 1994.
He said he disputes opinions and inferences regarding his stewardship of the bank made by the inspectors. He told Brian Murray SC, for the director, Paul Appleby, that he "took issue" with and was "very sensitive" about any implication that he was involved in malpractice.
He accepted that, following his appointment in late April 1994, he knew at an early stage that in some branches there was a problem with documentary compliance with Dirt for non-resident accounts.
Mr Seymour said he did not know at that stage that the problem was widespread.
He had no detailed knowledge of what penalties the bank would incur due to its non-compliance, but accepted it would result in a liability to the bank.
Mr Seymour accepted that, in July 1994, he was aware that audits of six branches of NIB revealed that they had problems with Dirt compliance.
Two were deemed a five-star risk, while two others had a four-star risk. He said those branch audits were general in nature, and revealed a number of weaknesses. His concern at that stage was that procedures be put in place to deal with any problems, and the audits findings in relation to Dirt did not set off alarm bells.
He also agreed he had told the NIB inspectors, when they interviewed him in January 2003, that problems of non-compliance were "an industry wide problem" with other banks similarly affected. Another NIB official had described a desire to avoid tax as "an Irish problem".
The case continues today.
