Probes into AIB scandal drag on

THE inquiries into the AIB financial scandal could drag on until the end of the year, a spokesman for the financial watchdog, IFSRA, said last night.

IFSRA was handed the second report last week. It was carried out by Deloitte and overseen by former comptroller and auditor general Lauri McDonnell on behalf of the financial watchdog.

Further investigations are continuing in the bank and it was unclear last night whether those involved would be named as a result of this latest round of investigations.

How the bank’s investment wing set up illegal overseas accounts on behalf of former top executives is part of the continuing investigation.

Deloitte was hired by the bank on the instructions of IFSRA and Mr McDonnell was charged to oversee the process on IFSRA’s behalf. However, the watchdog is still continuing its own investigations into other aspects of the overcharging scandal as well as the tax evasion schemes on behalf of top executives.

When the IFSRA chief executive published the first report in June he said he suspected some form of cover-up within the bank, that was going to be followed up in the current investigation.

It emerged yesterday that those responsible for making the wrong submissions to the Central Bank on foreign exchanges may not be named in the keenly awaited second report, for legal reasons.

Those who covered up the mistake may also escape censure.

Instead, it is speculated the report will focus on the breakdown of internal communications and controls as the cause for the overcharging in the first instance.

Following publication of the initial IFSRA report into the foreign exchange scandal, AIB agreed to pay back €34.2 million.

The amount covered other scandals where customers of the bank were overcharged, including business clients and university students.

The bank insists it did no wrong, other than failing to inform the Central Bank of the proper rates it was charging for its foreign exchange transactions, and for the subsequent cover-up that was highlighted by a whistle-blower who brought the scandal to public attention.

Recent reports suggested legal constraints will prevent the report from naming names.

Such considerations were a key factor in delaying the report into NIB’s misconduct by more than a year.