" I was invited to join an investment fund that was managed by AIBIM on behalf of senior executives. I regarded this opportunity as a benefit attaching to my position"

1 In April 1989 I established a discretionary trust with Allied Irish Trust Company (Jersey) Ltd. The trust was set up when I was working and living abroad and therefore not resident in Ireland for tax purposes.

The trust was legitimate and tax-compliant.

2 In August 1991 I returned to Ireland and became a resident for tax purposes. In 1998 the Irish tax regulations changed with regard to offshore trusts held by Irish residents and the settlor of such a trust became liable for tax on the trust income. Regretfully, I overlooked this tax liability.

3 In 2003, on my own initiative, I set about regularising this tax issue. To that end in August 2003 I notified the Revenue Commissioners of my intention to make an unprompted, qualifying disclosure under the Code of Practice for revenue auditors.

4 In preparing the necessary information for this voluntary tax disclosure, I asked AIB Investment Managers (AIBIM) for full details of an amount of £81,769 sterling that it had credited to my trust in December 1995, representing the full proceeds of the funds which it had been managing on my behalf since 1989. I explained the reason for my request and, in response to its inquiry, I confirmed that the Revenue Commissioners had already been informed of this tax issue.

5 Given the discussions which I had with AIBIM at that time, it is my belief that it was as a result of this inquiry that the current senior management of AIBIM and the AIB Group became aware of Faldor, initiated their investigations and informed the regulator. I subsequently assisted AIB in relation to an investigation which it undertook in relation to this matter.

6 I made a payment to the Revenue in respect of the liability to tax, interest and penalties on October 16th, 2003.

7 With regard to my involvement in the above mentioned investment account, when I was appointed to the position of AIB group general manager (Britain) in April 1989 and left Ireland, I was invited to join an investment fund that was professionally managed by AIBIM on behalf of senior executives of AIB Group. I regarded this opportunity as a benefit attaching to my position as group general manager and it was my understanding that it had been in existence for some time.

8 I transferred for investment £33,000 from an account in AIB to AIBIM in the manner requested by them and this is the investment which accumulated to £81,769.

9 Since, at the time of the investment, I was not resident in Ireland, there were no tax issues arising on the transfer and investment of the £33,000.

10 The administration and methodology of managing the fund - such as the use of Faldor - and the investment management of the funds was at the sole discretion of AIBIM. Consequently, I had no knowledge of the investment practices being pursued, including the improper use of AIBIM inhouse accounts and deal allocation practices that have now been disclosed.

I always assumed that the fund was managed in a proper and professional manner as would be expected from a leading fund management company.

11 I am now shocked and dismayed to learn that AIBIM is suggesting that it was engaging in unacceptable practices in regard to the investment which it was managing on my behalf.

May 30th, 2004