Scandals wipe over €360m off value of AIB shares

OVER €360 million has been wiped off the value of shares in AIB as a result of recent scandals that have rocked the country's largest financial institution.

Shares in the bank fell by 3% yesterday as it came under increasing pressure to name the senior executives who are facing serious allegations of tax evasion.

Tánaiste Mary Harney said she was appalled by the admissions by AIB and that she was considering introducing "draconian" penalties on the bank.

AIB admitted on Thursday that five former senior executives had set up an offshore company to benefit from trading with the bank.

The bank made profits of €1.1 billion last year.

"I must say it is really shocking to hear that this could have gone on at that level after all we have gone through in recent years in relation to bogus non-resident accounts.

"Is it any wonder there were so many [given] that those at the top of an institution like AIB were so centrally involved, not just in tax evasion and the offshore dealing but in terms of preferential shares.

"I find it deeply disturbing that such as major player, a blue chip company like AIB could be involved at that level."

She called on the five to come forward and explain their actions.

Several former top executives, including ex-chief executive Tom Mulcahy, have said they are not involved in the scandal in any way.

Finance Minister Charlie McCreevy said he was disappointed with the latest scandal and said he expected more from Ireland's largest financial institution.

Larry Broderick, the head of the Irish Bank Officials Association, says he is seeking a meeting with AIB to discuss the crisis.

The chairman of the Dáil committee on finance and the public services, Sean Fleming, has written to AIB chairman Dermot Gleeson to ask him to come before his inquiry immediately.

A spokesperson for the Financial Services Regulator said last night that the office had ensured the five senior executives were removed from their positions with the bank.

In response to the Tánaiste's insistence that those involved be named, the spokesperson added that this was a matter for the Revenue Commissioners and not the Regulator as the case relates to taxation matters.