Report on tax evasion claims due later in year

THE findings of the final reports into how AIB overcharged customers for eight years and the allegations of tax evasion by former executives will not be known until later this year.

The Irish Financial Services Regulatory Authority (IFSRA) said it had concluded its report into how many customers were affected by overcharging, but was still investigating allegations that top executives engaged in tax evasion and benefited from improper deal allocations.

It confirmed the Revenue Commissioners and the Office of the Director of Corporate Enforcement were probing the allegation former executives benefited from investing in an offshore company called Faldor.

Faldor was made up of five former senior executives, including former bosses Gerry Scanlon and Roy Douglas. Mr Scanlon has said he did not know his funds with the bank had been moved offshore and Mr Douglas said he believed the account was a perk for management.

The bank found “unacceptable” practices at its AIB Investment Managers subsidiaries and tax issues relating to former senior executives.

A probe by AIB found there was a breach of tax law in relation to Faldor. It also found that the former AIB executives behind Faldor received a preferential allocation of investments amounting to €48,000.

Separately, that investigation found two former and three current officials at the bank had tax issues unconnected to Faldor.

IFSRA boss Liam O’Reilly said now that the overcharging issue had been dealt with, it would concentrate on the second stage of its investigation into tax issues.

“The problem with the second element of investigation is that once you starting looking about people they have rights under the Constitution and we must be very careful. The investigation is well-advanced and we are talking about making sure everyone has the right of reply.

“We hope to be able to come back late autumn with some report.”

According to stock market analysts, the bank’s reputation has suffered not from the overcharging but the improper dealing practices. However, the bank has gained €514 million in value since the scandals broke back in May.