AIB tax probe begins

A major investigation was launched tonight into tax matters at the crisis-stricken Allied Irish Bank group.

High ranking officials in Ireland’s biggest bank may face prosecution after officers from the investigations and prosecutions division began the probe.

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.

Mulcahy, who today 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.

A spokesman for the Revenue Commissioners said: “Revenue has commenced a full investigation of all tax matters arising from recent disclosures regarding the AIB group and related entities and individuals.”

The probe is being led by the revenue’s investigations and prosecutions division and also includes officers from the large cases division, he added.

Mulcahy’s resignation was the latest in a line of crises to hit the bank.

Politicians called for a thorough probe of the bank’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 euro 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.