Up to 10 senior AIB executives could be facing disciplinary proceedings following the findings of an investigation into the bank's overcharging of customers on certain foreign exchange transactions. Siobhán Creaton, Finance Correspondent, reports.
A sub-committee of the bank's board of directors, which has been empowered to consider the need for any appropriate disciplinary proceedings, has recently written to these individuals about the findings.
The executives, a number of whom are believed to be very senior, were given a number of weeks to respond to their letter and some are believed to have retained solicitors to advise them.
The committee members are AIB head of finance, Mr Gary Kennedy, and two non-executive directors, a former US ambassador to Ireland, Mr Mike Sullivan, and Ms Jenny Winter, chief executive of the Barretstown camp for seriously ill children.
This committee is to determine AIB's response to the inquiry into the overcharging of customers on certain foreign exchange transactions over an eight-year period. It will report to AIB chairman Mr Dermot Gleeson.
The investigation was undertaken for the bank by Deloitte and independently assured by former comptroller and auditor general Mr Lauri McDonnell.
Yesterday AIB refused to comment on the extent of any likely disciplinary action other than to state that the process was ongoing. AIB has said it will inform the Irish Financial Services Regulatory Authority (IFSRA) of the actions it will take on foot of the findings.
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. Mr Gleeson has said AIB has so far refunded €12.7 million of the €26.1 million to affected customers.
IFSRA has said that it will make public the findings of its investigations into AIB's foreign exchange overcharging practices by year end.
Separately, it will also issue its report on the use of an offshore investment vehicle, called Faldor, by a number of the bank's senior executives at the same time.
The bank discovered that in the early 1990s a number of senior AIB executives had an investment account with AIB Investment Managers by way of a British Virgin Islands company called Faldor. Investors in Faldor included former AIB chief executive Mr Gerry Scanlan and the former Irish Life and Permanent chairman, Mr Roy Douglas. Both men stated that they had no knowledge the investment had been made in the company on their behalf.
The other executives linked to Faldor were former deputy chief executive Mr Patrick Dowling, former director of strategy Mr Diarmuid Moore, and Mr David Cronin, former head of AIB's US treasury operations, which was embroiled in a trading fraud in 2002.
AIB's inquiries revealed that five other senior executives, including former chief executive, Mr Tom Mulcahy, also had tax issues relating to other offshore accounts. Mr Gleeson has said that AIB took disciplinary action against three executives who were still employed at the bank when the discovery was made but refused to detail the nature of the disciplinary action.
It is unclear whether IFSRA will identify any individuals at AIB who may have been found to be culpable in these events.
Last week IFSRA chief executive Mr Liam O'Reilly said he did not believe that naming individuals would necessarily help the regulator to prevent these activities from occurring again.