The Garda and Revenue Commissioners have been informed of concerns about possible money laundering and fraud at Firhouse Credit Union, Dublin, according to sources close to the Irish League of Credit Unions (ILCU), writes Colm Keena.
PricewaterhouseCoopers has been appointed to report on the affairs of the credit union and there is to be no annual general meeting for last year and no decision as to the size of any dividend until the accountants' report is completed.
The development comes as the credit union movement, one of the most successful voluntary organisations in the State, with combined assets of €10 billion, is in the process of developing a new regulatory regime under the Irish Financial Services Regulatory Authority.
The Irish Times has also learned of difficulties at Mitchelstown Credit Union, in Co Cork, where a report drafted by its supervisory committee has indicated that the administration of the credit union was compromised by the fact that the board was divided.
The accountants appointed to look at Firhouse Credit Union have been asked to look at the quality of the credit union's assets and in particular the loan book and investments. Bad debts incurred for the year ending September 30th, 2003, are estimated to be in the region of €2.2 million. They have also been asked to report on whether any wrongdoing has taken place at the credit union. The ILCU, the body to which most credit unions are affiliated, has pledged to support the liquidity of the credit union and has pledged €5 million.
In relation to Mitchelstown, it is understood the report shows that a majority on the board has controlled the credit union for a period and is having difficulty with problems currently facing the credit union. There are serious relationship difficulties between the manager and the staff and also severe difficulties with the credit union's new computer system.
The difficulties at Firhouse and Mitchelstown come in the wake of a four-year controversy at Gurranebraher Credit Union, in Cork. That credit union's AGM in March saw bottles and microphones being thrown and the Regulator of Credit Unions, Mr Brendan Logue, being surrounded and subjected to abuse.
A High Court case that followed the 2002 dismissal of the former manager and deputy manager of the credit union led to costs of €1.5 million being incurred before the case was settled. The controversy heard reports on bullying and the behaviour of members at board meetings, the question of directors' expenses going unreceipted, and the payment of €120,650 in consultancy fees to financial adviser Mr Damien Wallace, for investing €3.8 million on behalf of the credit union.
The first Consultative General Meeting of the ILCU took place this weekend in Limerick. The holding of such meetings was one of the recommendations of the Review Commission chaired by Mr Phil Flynn which recommended significant changes to the credit union movement.