AIB set for lengthy cover-up probe

AIB’S on going scandal of overcharging customers over a period of years is destined to drag on.

Up to 10 senior managers face disciplinary action, RTÉ News announced last night.

They have replied to allegations that they failed to inform the Central Bank for the offence that resulted in up to €26 million being refunded to over-charged customers.

Investigations into the scandal were initiated by the consumer watchdog IFSRA after a whistle-blower brought the scandal to light.

Lauri McDonnell, a former Comptroller and Auditor General was put in charge of the investigation.

After the findings were made public Liam O’Reilly, chief executive, IFSRA said phase two of the investigation would determine where key staff had been involved in a cover-up.

When the initial investigation was announced in the early summer Mr O’Reilly said at the time “we believe there is evidence of a cover-up in the bank.”

Since then customers have been compensated as part of a long list of sandals that has dogged the bank in recent years.

As a result of the follow up inquiries it has emerged that up to 10 senior mangers face disciplinary action.

The issue is whether they knew that they failed to inform the Central Bank once the error was discovered.

It is understood they blamed computer error for the failure, but the continuing investigation seems to be suggesting that managers failed to inform the Central Bank when the mistake was discovered.

As a result the over-charging went undetected for several years.

When AIB stumbled on the issue earlier this year they tried to correct the matter without informing IFSRA.

The shock disclosure in May that this scandal had been covered up by the bank led to the investigation headed by Mr McDonnell. Phase two into who knew what and when was the subject of a second investigation.

That has been completed and the findings handed over to a sub-committee of the AIB board.

That was made known to the Finance Oireachtas Committee by the chairman of the bank, barrister Dermot Gleeson.

At the time Mr Gleeson said that executives who were identified as having a case to answer had been contacted.

Mr Gleeson said it could embroil the bank in a legal wrangle and that looks now to be the case.

The executives identified in the report were given until November 8 to respond to questions put to them arising from the second investigation carried out by the watch-dog.

Some have responded through their legal representatives and that development is expected to set back completion of the affair several months and still leaves a question mark hanging over the integrity of the bank.