AIB chairman snubs Parliamentary probe

The chairman of the embattled Allied Irish Bank Group refused today to appear before a Parliamentary Committee until investigations into the institution’s dealings are completed.

Dermot Gleeson said it would be inappropriate for management to answer questions from members of the Dáil while investigations into the operation of the state’s largest financial institution were ongoing.

Mr Gleeson said he supported the view of AIB chief executive Michael Buckley that a delegation from the company should meet the finance committee, but not until an independent investigation into foreign exchange charges was completed.

“I am certain that a proper consideration of such a response would be better conducted when all those concerned are in possession of the facts surrounding the events in question,” he said in a letter to committee chairman Sean Fleming.

“A legislative or public policy response based on less than full information is unlikely to be in the best interests of consumers, the industry or the wider public.”

A major investigation was launched into tax matters at the bank last night.

The company was thrown into turmoil at the weekend when former chief executive Tom Mulcahy quit his post as chairman of Aer Lingus over tax compliance during his time at the bank.

Mr Mulcahy, who also resigned as non executive director of building group Kingspan, was one of several former top officials said to have tax issues in a statement from AIB on offshore dealing last week.

His resignation was the latest in a line of crises to hit the bank.

Politicians called for a thorough investigation of the institution’s dealings after former executive and outgoing chairman of Irish Life and Permanent Roy Douglas admitted he benefited from the investment scheme.

Mr Douglas said he believed it was a legitimate management perk, while the bank said it was in breach of tax laws.

AIB admitted overcharging foreign exchange customers earlier this month, and in a second scandal it emerged more than 500 customers were paying for mortgage insurance without their consent.

It was estimated that AIB earned in the region of €20m over 10 years through overcharging at the foreign exchange desk.

The bank was also forced to refund around €3.5m to customers who were incorrectly charged for trusts they held.

Mr Gleeson said today he was reluctant to postpone compliance with any request to assist the Joint Finance Committee.

But he insisted the bank’s management was considering recent reports submitted to the Irish Financial Services Regulatory Authority, getting a full perspective on the Foreign Exchange charges issue, and considering how these matters should be addressed.

“In my judgment it would therefore run counter to good corporate governance if senior management were put in a position where they were obliged to share our consideration of these important topics, even with a Joint Committee of the Oireachtas, before the Board of AIB have an opportunity to consider them,” he said.

“The solution which Mr Buckley proposed and which I support seems to me to strike a fair balance between obligations to the Committee and the responsibilities that I have been entrusted with by 88,000 shareholders.

“This would hopefully allow the current investigation to run its course and the interaction to continue between IFSRA and AIB without the ventilation of these issues, in mid stream as it were, at another forum.”