The International Financial Services Centre offices of German bank SachsenLB were raided yesterday by gardaí in an investigation into how it nearly collapsed on the back of investments made at its Irish operations.

Click here to read Emma McNamara's assessment of the situation at SachsenLB

The examination of Sachsen's businesses started last October, after the bank was bailed out of trouble and bought for €300m.

Sachsen was sold at a knock-down price after running into multi-billion euro liquidity problems. Some of its former board members are suspected improper accounting and breach of trust for exposing the bank to 'toxic' loans connected to the American sub-prime mortgage market.

When the credit crunch hit this time last year, the funds Sachsen based in Dublin's IFSC couldn't handle the debts being called in, so other German banks had to come to its aid with a €17 billion rescue package.

The whole bank ended up being sold to the Landesbank Baden-Württemberg or LBBW last December.

28 sites including houses and offices in six German states and in Dublin were searched yesterday by German police and gardaí, who collected computers, electronic data and documents as part of the probe.

Last night a spokesperson for the Financial Regulator said it was aware of the raids and was satisfied that Sachsen's Irish staff are co-operating fully with the ongoing investigation.

A Garda press spokesperson said: 'As part of a German fraud operation An Garda Siochana, acting at request of the German authorities, which is processed by the Mutual Assistance Procedure, undertook searches under warrant on a number of offices in Dublin City.

'German authorities have been advised of the result of these searches and are aware of any material which may be of evidential value.'