Search for Aer Lingus chairman to begin

THE search for the next chairman of Aer Lingus begins this week following the surprise resignation of Tom Mulcahy over the weekend.

The former AIB chief executive left his high-profile position with the national airline after being identified as one of a group of former senior executives at the centre of the latest scandal to hit the bank.

Transport Minister Seamus Brennan said he will carefully consider the appointment of Mr Mulcahy's replacement over the coming weeks, although his successor is likely to be in place for the next scheduled meeting of the Aer Lingus board on July 26.

Mr Mulcahy was named last week among a group of past and present senior employees of the bank who are under investigation by the Irish Financial Services Regulatory Authority.

He was identified by an internal bank report as one of five former and current executives who had unspecified "tax issues". AIB has so far refused to elaborate on the nature of Mr Mulcahy's role in the controversy, although AIB chairman, Dermot Gleeson claimed the latest in a series of scandals affecting the group involved "completely unacceptable practices". Mr Mulcahy issued a statement on Saturday saying he was "tax compliant".

The issue arose from a separate AIB investigation into how other former top officials, including another past chief executive Gerry Scanlan, were beneficiaries of an offshore investment scheme which breached tax laws. Mr Scanlan as well as the current chairman of Irish Life & Permanent, Roy Douglas, who is due to retire from that position on his 60th birthday next Thursday, and three other former AIB executives, Patrick Dowling, Diarmuid Moore and David Cronin invested around €750,000 in a British Virgin Islands investment called Faldor between 1989 and 1996.

AIB claims the men benefited by €48,000 at the bank's own expense from "inappropriate deal transactions".

While Mr Mulcahy insisted he was tax compliant, he said he had announced his resignation as Aer Lingus chairman because the matter had drawn adverse publicity on the airline. In his letter of resignation to Minister Brennan, Mr Mulcahy said he had also resigned "in order to enjoy privacy for myself and my family in my retirement years."

The 63-year-old businessman, who is co-owner of The Queen's pub in Dalkey which he bought for €7m last year, was widely credited with turning around the fortunes of the national carrier following the crisis in the aviation industry after the 9/11 terrorist attacks three years ago.

Last year, Aer Lingus reported profits of €75m having incurred losses of over €52m just two years before.

Among the favourites to succeed Mr Mulcahy is Seán Fitzpatrick, who was appointed a director of the airline last March. Mr Fitzpatrick is the current chief executive of Anglo Irish Bank but has already announced his decision to step down from that position within the next 12 months.