Four former top management figures in AIB, the State's largest bank, have made tax settlements with the Revenue for a total of €323,313 as a result of their dealings with an offshore investment scheme that breached tax law, writes Arthur Beesley, Senior Business Correspondent.
They include the bank's former chief executive and former Irish Stock Exchange chairman, Gerry Scanlan, who is a non-executivedirector of the fruit importer Fyffes.
Former Irish Life & Permanent chairman RoyDouglas made a settlement, as did Diarmuid Moore, former AIB director of strategy, and the estate of the late Patrick Dowling, former AIB deputy chief executive.
All were investors in Faldor Ltd, a British Virgin Islands company managed by AIB Investment Managers, whose affairs were made public by AIB in May 2004 soon after the bank became embroiled in a scandal about over-charging in its foreign exchange unit.
Later that year, the Irish Financial Services Regulatory Authority said Faldor was a beneficiary of "inappropriate favourable deal allocations, by way of artificial deals" worth some €48,000 from the funds of AIB Investment Managers. The regulator said then that it had "no evidence to indicate that the beneficiaries of Faldor influenced or were aware of these allocations".
AIB said yesterday that it could not comment, beyond saying that the settlements related to "followup action" by Revenue following the regulator's investigation. Revenue disclosed the Faldor settlements in its defaulters list for October-December last year, which included the names of 148 individuals and companies who paid a total of €28.11 million to settle their tax liabilities. Among those who made settlements was former Kerry GAA star Jack O'Shea, who paid €19,419 in respect of underdeclared income tax on foot of an offshore assets investigation. Unpublished settlements brought the total collected from defaulters to €125.26 million.
In relation to Faldor, Mr Scanlan paid €206,010, comprising €103,120 in underdeclared income tax and capital gains tax and €102,890 in interest and penalties.
The Irish Times was unable yesterday to contact Mr Scanlan and a spokesman for Fyffes declined to comment. Fyffes regarded the settlement as a "personal matter" for Mr Scanlan, he said.
In a statement issued in June 2004, Mr Scanlan said that £114,000 (€144,750) which he or his wife invested in AIB Investment Managers in 1989 and 1990 was transferred "without our knowledge" to Faldor.
The €53,259 settlement from Mr Douglas included €17,380 in underdeclared income tax and €35,879 in interest and penalties. An intermediary said Mr Douglas had no comment. In May 2004, Mr Douglas said he was "invited" to join the scheme when he became AIB group general manager for Britain in April 1989.
He regarded this opportunity as a "benefit" of his senior position at the bank and understood that it had been in existence for some time.
Mr Moore's settlement of €51,044 included underdeclared income tax of €17,363 and €33,681 in interest and penalties. The €13,000 settlement in respect of Mr Dowling's liability included €3,267 in underdeclared income tax and €9,733 in interest and penalties.
Revenue's scrutiny of Faldor finishes with such settlements.
Another former top-ranking AIB executive who had money in the company, David Cronin, is not resident here. Mr Cronin was in charge of the bank's US treasury operations, which were embroiled in a multimillion-dollar fraud in 2002.
The bank is understood to be continuing disciplinary proceedings against staff in relation to their alleged role in the foreign exchange scandal. "Details of any disciplinary proceedings undertaken will be given to the Financial Regulator and we won't comment apart from that," said a spokesman.