SIX SENIOR AIB executives secretly and systematically colluded in preparing and executing a premeditated strategy to undermine and damage the bank’s international financial services business for their own gain, the High Court heard yesterday.
Michael McDowell SC, for AIB, told Mr Justice Barry White that following an internal investigation the bank had been shocked at the conduct of the six top managers.
The court ordered the six managers to preserve all documents and computer records pending the full trial of the proceedings.
The managers are Pat Diamond, Merlin, Elton Park, Sandycove, Dublin; Aidan Foley, formerly Grawn, Kilmacthomas, Wexford; Gerry McEvoy, formerly Shandon Park, Phibsboro, Dublin; Derek O’Reilly, Fernleigh Drive, Castleknock, Dublin; Andrew O’Shea, formerly Ashbrook House, Julianstown, Co Meath, and Joe Walsh, formerly Grosvenor Terrace, Monkstown, Co Dublin.
The six were behind a management buyout offer for AIB International Financial Services (IFS) but turned to their “Plan B” option to set up a rival business when AIB decided to sell the business to a firm called Capita in June.
The court was told they secretly schemed to take over clients, business and staff of IFS which the bank had put up for sale as part of the deleveraging of AIB after being deemed “non-core”.
Mr McDowell, who appeared with Declan McGrath, said the internal inquiry revealed that their actions had led to significant loss and damage being caused to AIB.
Capita had reduced its original offer for the business from €55 million to €33 million after 25 directors and employees left the business between June and August.
Ronan O’Neill, AIB’s head of corporate and commercial banking, said IFS had operations across Europe – Ireland, Luxembourg, The Netherlands, Switzerland, Hungary – and the US. He said in the run-up to the finalisation of the sale to Capita he heard rumours that senior directors and employees of IFS were setting up a rival company called Centralis and were encouraging others to join them.
Mr McDowell said the “covert plan” was known among the defendants as “Plan B” and allegedly involved complicity in the removal of highly confidential, commercially sensitive and proprietary data belonging to AIB.
It also involved head hunting key IFS staff and poaching clients as well as setting up competing entities in Switzerland and Hungary in conjunction with Centralis.
Mr O’Neill said Capita had offered €55 million for IFS on May 3rd. A week later the MBO team had offered €22 million.
Mr O’Neill said the unlawful conspiracy to take, divert and appropriate IFS business by downloading trade secrets and confidential information had caused very serious loss, shaving €22 million off the value of the offer by Capita.
Unless the defendants were restrained this may result in the transaction with Capita not proceeding or expose the bank, which is 99.8 per cent owned by the State, to claims by Capita, he said.
