The independent review commissioned by CRH to establish if its former chairman, the late Des Traynor, and other directors followed compliance and disclosure requirements should allay any misapprehension surrounding the group following the Ansbacher revelations.
It also represents a positive move after a period in which the company and its directors appeared slow to face the issues.
The review, however, will essentially be an internal inquiry; the findings of such inquiries are rarely published. Nevertheless, CRH should expedite the inquiry and publish a broad outline of the findings and recommendations. CRH was slow to respond adequately to the allegations in the affidavit presented to the High Court that a substantial number of CRH's directors in 1987 "knew an unlicensed bank - Ansbacher (Cayman) - was operating from its registered office" and that eight of the then 15 board members held Ansbacher deposits.
That slowness can probably be attributed to a conflict between corporate and individual responsibility. But corporations which represent so many shareholders must always have preeminence, even if it means sacrificing individuals.
CRH did have logistical problems. Meetings in the US, including presentations and a board meeting, had been prearranged, and cancellation of these could have posed greater problems. Its first statement was notable for the paucity of information, stating merely that it would not comment on the affidavit presented to the High Court and its contents. CRH was a little more forthright the following day, when it said its directors "never discussed or approved or knowingly permitted the carrying out of banking business by the late Mr Des Traynor".
With such question marks raised in the affidavit, it was inappropriate that none of the four serving CRH directors who were also board members in 1987 commented when asked, through a company spokesman, if they held money in the Ansbacher deposits.
It was only on the third day that they broke their silence. Three directors - Mr Don Godson, Mr Harry Sheridan, and Mr Jack Hayes - said they had no knowledge or connection with Ansbacher. And the current chairman, Mr Tony Barry, said he had transferred funds between 1989 and 1995 into an account with Ansbacher, or Hamilton Ross, but the money involved had been fully disclosed after-tax income.
It held a pre-arranged board meeting but that was not held for a week after the first revelations. It issued a fairly full statement, however, after that meeting. In it CRH noted Mr Traynor had been non-executive chairman from 1987 to 1994 and stressed it had "never knowingly permitted or facilitated any illegal activities to be conducted by any director, or employee, from any of its premises". It said any arrangement that Mr Traynor may have entered into "with an individual director is a matter for the director concerned and the company does not consider it appropriate to comment on any alleged arrangements or other allegations in the affidavit".
And Mr Barry went further: "If it is established that a bank or any illegal activity was operated from its non-executive chairman's office, CRH would deplore this as a most serious breach of trust by its former chairman," he said.
The revelations have blemished CRH's outstanding record (its shareholders have enjoyed a compound annual return of 21.8 per cent between 1970 and 1998, if their dividends were reinvested). Any CRH director named in the affidavit and others on the list should of course face the full rigours of the law if found guilty of breaches in exchange control, company legislation and/or tax laws.
But the revelations are not central to CRH's present operational activities. The market is also rightly taking that view; although the shares initially weakened from €18.60 to €17.95, they later recovered to €19.30. Also, the board's make-up of the board is mostly different to 1987's and its present executive directors who will lead the group forward into the next century are not connected with the Ansbacher accounts.
The CRH review should reinforce investors' confidence in the well-managed, expanding group. The separate inquiry by the three inspectors, appointed by the High Court to investigate the Ansbacher accounts, should not hinder its continued progress.
