Liquidators of three failed investment funds have failed in their legal bid to question two former directors under oath.

The high court heard 3,000 investors had put in £171m into New Earth Recycling and Renewables (Infrastructure) plc and its feeder funds Premier Investment Opportunities Fund and Eclipse Investment Fund.

Last audited accounts in 2014 showed the companies had a net asset value of £200m. But they failed with no likelihood of any return to the investors.

The Manx taxpayer is currently funding the winding up of the group.

Liquidators wanted to summons former directors John Bourbon and Michael Richardson to be examined under oath after they declined to be interviewed.

But the application - the first of its kind made in the island - has now been rejected by Deemster Andrew Corlett.

The Deemster agreed with Chiva Samari, advocate for the three companies, that the order sought is in the nature of a ’carte blanche’.

He said the liquidators ought to have pursued with the respondents their offer made in April last year to provide further written information and answers to specific questions.

He said the liquidators’ approach was ’putting the cart before the horse’ and until the court sees the areas of questioning it is simply unable properly to evaluate whether the application was reasonable. The court heard that the liquidators had in excess of 200,000 documents relating to the companies’ failure.

But advocate for the liquidators Rob Long said his clients wanted to know the ’thought processes’ of the key individuals in relation to the companies’ promotions, affairs and dealings - and there was no other means of obtaining this information.

Deemster Corlett said the liquidators could make written requests to the two former directors for further written responses - or they may wish to consider a further application detailing specific areas of proposed questioning.

Isle of Man Newspapers had requested Deemster Corlett make a ruling on whether the examination be held in public - should it have been approved - arguing that this is in the public interest.