An application to the High Court for direction, which could lead to the dropping of proceedings for alleged misappropriation of funds, is expected soon from the liquidator to MMI Stockbrokers.

Last month the High Court heard that an offshore company, Cater Allen, of Jersey in the Channel Islands, had written to liquidator Mr Tom Kavanagh informing him it would not give evidence of benefit to him should hearings taking place.

Mr Kavanagh last year told the High Court that £1.9 million (€2.4 million) had been taken from an MMI Stockbrokers' client account in the name of Cater Allen and that at least £1 million of this amount was lodged to accounts in the names of Mr Oisin Fanning, of Forenaughts House, Forenaughts, Naas, Co Kildare, and Mr John Curran, of Kingsley Mews, Raglan Road, Ballsbridge, Dublin, both directors of MMI Stockbrokers, or persons connected to them.

Mr Kavanagh made a successful application for the issuing of proceedings against all seven MMI directors for misappropriation of funds. The directors disputed the allegation and requested an early hearing.

But in January, Cater Allen, which initially told Mr Kavanagh it might sue MMI Stockbrokers for negligence, sent a letter stating it was satisfied there had been no misappropriation of funds and no fraud.

No explanation has yet been given in public for the company's stance in the matter. Cater Allen is part of the Abbey National group.