The High Court has appointed a liquidator to investment company Custom House Capital (CHC), after inspectors from the Central Bank found "unauthorised and improper transactions" involving €56m of client funds.

The court also ordered all the reports and exhibits gathered by the Central Bank investigators to be sent to the Director of Corporate enforcement, the DPP, the Garda Commissioner and Revenue.

Among the irregularities detected the inspectors found cases of client monies that were supposed to have been invested in cash-only funds that were instead used to invest in property.

The liquidator will attempt to recover as much of the €56m as possible, but investors will inevitably suffer losses. They have been invited to apply to the Investor Compensation Company Ltd (ICCL), an investor compensation fund that can make payments up to a maximum of €20,000.

Some 1,500 investors are affected by the liquidation of the company.

The Central Bank had sought the appointment of the court-appointed inspectors in July to investigate the affairs of the firm and to assess its financial position. There had been significant concerns about the company's operations.

The Central Bank had been actively engaged with the firm since 2009, which led to several restrictions being put on its operations. From July it has not been allowed to make any transactions or make payments to any clients in order to protect the interests of all its clients.

As of July this year, CHC had four directors: chief executive officer Harry Cassidy (who resigned on July 13), John Whyte, John Mulholland and Seán O'Dwyer. Mr Cassidy and Mr Whyte were executive directors.

The inspectors said that without the assistance of Mr O'Dwyer, their investigation would have been considerably more difficult.

The report said it is understood Mr Cassidy's annual salary before his resignation was €430,000.

95% of cash fund went to property

The inspectors found that there was a practice of CHC effecting transactions on behalf of clients "in a manner which could not have been envisaged by those clients and for which no mandate or authorisation had been given".

The report found that of €10.4m was held in one of the company's funds, the Destiny PRSA Cash Fund, more than 95% was transferred or otherwise made available to CHC-promoted property investments.

95% of the €3.86m in another fund, Destiny Select II Cash Fund, was also diverted into property. The inspectors found that the transactions concerned with this fund appeared to have taken place between October 2010 and February 2011.

They could not determine how much of this money could be recovered.

The inspectors concluded that both of these cash funds had stopped operating as originally intended, and could not meet requests from customers who wanted their money back.

The report said it was "beyond question" that the transfer of money from these funds to property investments was "contrary to the proper conduct of such funds and without justification".

The report also looked at two funds designed to invest in shares. It found that €6.8m of the €8.9m in the Destiny PRSA Equity Fund had been converted to cash and invested in property. €10m of €11.8m in the Destiny Equity Fund was also used in this way. The inspectors said they could not assess how much of this could be recovered because of a lack of information on the properties' value.

The inspectors' report quotes Mr Cassidy as saying that "there was a hope and an expectation that we would get ahead of the market and we would get the property sold. But that hasn't happened."

The report also looked at accounts held by individuals with CHC, which contained customers' cash and investments. The inspectors said it was clear that cash from one or more client accounts was improperly taken and used to fund property investments. The report said it would take considerable time to go through these accounts, but sworn testimony indicated that more than €11m may have been transferred in this way.