Extensive details of how senior staff at National Irish Bank colluded to facilitate tax evasion and engaged in systemic overcharging of customers will be outlined today in a major report on the Australian-owned institution's banking practices.
The report, by inspectors appointed by the High Court, follows the biggest-ever investigation into an Irish company, on foot of allegations that NIB executives overcharged customers and facilitated tax evasion through the sale of unauthorised offshore investments.
Former Fianna Fáil TD Ms Beverley Flynn, who worked as a financial adviser at NIB and who sold some of these policies, is known to have been the subject of adverse findings in an interim report from the inspectors. The High Court was told last week that a former chief executive, Mr Barry Seymour, and a former head of finance, Mr Patrick Byrne, are the subjects of adverse findings in the final report.
Other former senior figures are also expected to feature. The investigation, which began in March 1998, has weighed heavily on the bank during that period.
The controversy is estimated to have cost it €64 million.
In a letter to the court, the bank's chief operating officer said a fees and interest refund programme to customers had cost €1.9 million to date and that it had been estimated that a further €10.6 million had yet to be paid.
The bank had incurred legal and bank costs arising from the inspectors' investigation that totalled €28.7 million. A further €6.7 million had been paid for a Revenue audit.
An offshore investors' settlement programme was likely to cost €10.8 million before it was completed.
NIB is believed to have had a dedicated team of 40 employees working full time with the inspectors. They are said to have devoted 104 man years to dealing with the investigation. The High Court inspectors have been supplied with more than two million pages of documentation by the bank.
The bank has said it has examined every practice and process and reworked its way through all its systems and processes in order to ensure it is totally compliant.
The report will create greater uncertainty for the bank's 700 staff and will only serve to heighten speculation that its parent, National Australia Bank, will sell it. Some investors are expecting NAB to issue a statement declaring its intentions regarding the bank next month.
The six-year investigation into overcharging has weighed on NAB's share price in Australia, adding to the bank's woes. It has also recently issued a profits warning and its chief executive, Mr John Stewart, has been given the task of turning the accident-prone financial institution around.
This week, senior NIB executives told staff that these practices were in the the past, that the bank's systems had been substantially overhauled since, and that people who carried out this type of activity no longer worked there.
