Liquidator denies conflict of interest in decision not to sue KPMG

The special liquidator Kieran Wallace has strongly rejected any claims that there is a conflict of interest that has resulted in him not suing his ultimate employers, KPMG as part of the liquidation of IBRC.

The allegations were levelled in a court case where the former director of Irish Nationwide Building Society (INBS) is being sued over losses that now form part of the liquidation of IBRC.

In a letter that was produced in the commercial court solicitors for Terence J Cooney had written to the minister of finance telling him to sue INBS’s auditors KPMG.

During the course of the Joint Committee on Finance, Public Expenditure and Reform, Sinn Féin Finance spokesperson Pearse Doherty laid out the alphabet soup of connections between the firms at the heart of the issue.

“We have special liquidators of IBRC, who are employees of KPMG, who ask a question whether IBRC should sue KPMG as a result of the auditing of accounts that they did on Irish Nationwide. They seek independent advice from a legal firm, who gave advice on corporate governance. Do you not see that there could appear to be a conflict of interest?” he asked.

Mr Wallace said that the decision of who was to be sued happened well before they were appointed as special liquidators.

“Firstly, the litigation that you point to was litigation that was in being prior to our appointment as special liquidators and an assessment was made by an independent board at that stage about who should be joined into that litigation and who should not. It wasn’t our decision to put it on the record,” he said.

The past performance of accounting firms, in particular PricewaterhouseCoopers (PWC), who provide valuation and advice on the sale of the IBRC loan book came in for particular scrutiny.

Mr Wallace said that they now only deal with PWC in London as a means to avoid any conflict.

“The PWC team that we deal with is operated out of London. We were quite clear that any PWC people from Dublin could not have had a prior relationship with anything to do with IBRC,” he said.

Peter Mathews TD said that London-based accountants wouldn’t be able to value Irish properties.

“London people wouldn’t know how to value Irish loans. I know from experience,” he said.


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