The Irish Financial Services Regulatory Authority (IFSRA) will issue its report on foreign exchange overcharging at AIB and on the use of offshore investment vehicles by some of the bank's most senior former executives next week, reports Siobhán Creaton, Finance Correspondent
IFSRA, which regulates the bank, is not expected to name AIB executives who should be held accountable for the overcharging of foreign exchange customers over eight years.
AIB has established a sub-committee of its board of directors to consider the need for any appropriate disciplinary proceedings and up to 10 senior management have been contacted about aspects of this episode. It will report to AIB chairman Mr Dermot Gleeson and the bank will inform IFSRA of any disciplinary actions taken.
AIB is currently issuing refunds of €26.1 million to customers who were charged a rate of commission that was higher than that which had been notified to the regulator.
The overcharging was investigated for the bank by Deloitte and independently assured by former comptroller and auditor general Mr Lauri McDonnell.
At the same time, the regulator will also report on the use of an offshore vehicle, Faldor, by five of the bank's most senior former executives.
This vehicle was used in the 1990s by the executives who had an investment account with AIB Investment Managers by way of Faldor, a British Virgin Islands company.
Investors in Faldor included former AIB chief executive Mr Gerry Scanlan, former AIB deputy chief executive Mr Paddy Dowling, former AIB director of strategy Mr Diarmuid Moore, former treasurer at AIB's US bank Mr David Cronin and Mr Roy Douglas, a former senior AIB executive who recently retired as chairman of Irish Life & Permanent.
Five other AIB executives, including former chief executive Mr Tom Mulcahy, were also found to have had "tax issues" in unconnected accounts relating to periods ending in 1998. Three of the five still work at the bank and faced disciplinary action sanctioned by the board. AIB has refused to detail the nature of this action.
IFSRA has considered the findings of the Deloitte investigation and has said that it will be considering issues such as whether there was a cover-up about the charging of incorrect foreign exchange rates.
Meanwhile the Competition Authority is expected to issue recommendations in the next couple of weeks aimed at increasing competition in the banking sector. It has been focusing on personal current accounts and loans to small and medium-sized businesses.
