Anglo tapes ‘not voices of people of Ireland’ – Higgins

PRESIDENT Michael D Higgins blasted ex-Anglo Irish Bank bankers in an impassioned speech at the annual Áras an Uachtaráin garden party today.

He said: ‘I have often spoken in the past of the terrible damage that has been inflicted on our society by the aggressive individualism and self interest of a speculative economy.

‘This week, voices from the past have been heard which serve to highlight behaviours and attitudes at the very root of that failed economic model.  They do not make for easy listening.

But let us be certain of one thing: these are not the voices of the people of Ireland; the attitudes they reveal are not shared by the people of Ireland; the behaviours they reflect are not characteristic of the people of Ireland.

‘The people of Ireland, who have borne the brunt of a financial crisis not of their making, are shocked and dismayed that a culture of greed and recklessness emerged in some of our institutions – a culture which was not in keeping with our core values as a nation.

‘The Irish people, who are rightly recognised for their fortitude, work ethic and courage, will take us out of this present crisis.

‘The authentic voice, spirit and values of Ireland will be restored and will lead us to what is important – a real economy that provides sustainable employment for all and a just and ethical society that allows all its citizens to fully participate and achieve their life potential.

‘Informed foreign opinion will recognise that the real story from Ireland is not the aberrant voices we heard this week but the heroism of its people who are determined, not only to get through this crisis, but to secure a future that is just, prosperous and sustainable.’

Richard Bruton’s delay over Paul Appleby retirement

RICHARD Bruton waited an astonishing four days to tell the Taoiseach that Paul Appleby was retiring.

Despite being told the Director of Corporate Enforcement’s shock decision last Friday, the Enterprise Minister waited until the Cabinet meeting at 10.30am Tuesday to break the news to his shocked colleagues.

Mr Appleby will stay in his €146,000-a-year job – and keep the €225,000 lump sum and €75,000-a-year pension he should have seen reduced.

After announcing on Tuesday morning that he was to retire this month, Mr Appleby backtracked on the bombshell decision following negotiations with ministers.

The same day was the deadline for the Government’s early-retirement scheme under which civil servants can claim pensions based on their salaries before recent rounds of public sector pay cuts.

Continuing beyond this date would have reduced Mr Appleby’s pension by around €4,000 a year and his lump sum by around €6,000, to €219,000.

But there were red faces as the Government had to make an exception for Mr Appleby – who is heading the investigation into Anglo Irish Bank – within hours of Tuesday’s deadline.

Last night, when asked for the time and date when Enda Kenny was first personally made aware of Mr Appleby’s decision to apply, a spokesman said: ‘It was at that Cabinet meeting.’

Public Expenditure and Reform Minister Brendan Howlin insisted on Tuesday that he, too, had just heard the news.

But it has been assumed that – at the very least – Mr Bruton might have phoned or even sent a message to the Taoiseach to tell him about the imminent retirement of the man heading up the largest investigation of its kind in the history of the State.

Indeed, it now appears that it was only after the Taoiseach was told of the matter that it was resolved and Mr Appleby was persuaded to stay on at the Office of the Director of Corporate Enforcement.

Fianna Fáil finance spokesman Michael McGrath warned that there were ‘more Paul Appleby’s’ waiting to happen.

He said: ‘The whole Paul Appleby story just undermines the ham-fisted way the Government has approached the retirement of public servants. People in senior positions, particularly in sensitive roles, should have been required to inform the Government several months in advance what exactly their intentions were.

‘Clearly that didn’t happen and now the Government is fire fighting.’

He added: ‘We will see more cases like Paul Appleby where the Government is just going to have to make this up as they go along.’ Mr Appleby was appointed to the role in 2001 to tackle the pervading culture of non-compliance with company law following banking scandals and tribunal disclosures.

His resignation had sparked fury, with one caller to RTÉ’s Liveline saying, ‘A man in such a high position should have the good of the nation as his top priority, like the captain of a ship should.

‘For God’s sake, see this investigation through.’ Last night, it was confirmed that a deal has been formally agreed and that he will be appointed as acting director of the ODCE.

A spokesman for Mr Bruton said last night: ‘The minister’s focus at all times has been on the investigation into Anglo, and the solution reached reflects the importance the Government places on this investigation.

‘It has been confirmed that Mr Appleby will be appointed as acting Director of Corporate Enforcement for a period of six months at his current salary level, subject to the normal abatement rules.

‘The minister is satisfied that it will now be possible to ensure a smooth transition to a successor for Mr Appleby and also to maintain the impetus in the investigation.’

And he added: ‘The minister is happy to confirm that he has received sanction for the recruitment of a successor to Mr Appleby.’

When asked why the minister had waited so long to tell the Taoiseach, the spokesman replied: ‘Mr Bruton met with Mr Appleby on Monday to discuss the matter and then raised it at Cabinet on Tuesday.’

Last night, the ODCE declined to make any comment. Mr Appleby’s resignation statement was still posted on the office’s website last night, without any reference to Tuesday’s U-turn.

Credit unions awarded €3.7m against members

CREDIT Unions have been awarded €3.7million by the courts against defaulting members in the past four months.

Figures for the last third of 2011 showed a steady increase in the number of judgments granted as credit unions across the country desperately try to balance their books.

Of 213 judgments between September and December awarded against members of credit unions in Ireland,  one credit union was forced to take an astonishing 30 cases against defaulters and at one branch alone, the court ordered a member to pay back more than €400,000.

In September, there were 40 judgments granted around the country against the worst cases of debt arrears. But by November this figure had leapt to 77.

The most prolific litigator was Derg Credit Union in Co. Clare, which had no fewer than 30 judgments granted.

The sums involved ranged from a mere €283 to as high as €37,000, although the amounts being sought were generally around €12,000. The total came to €372,257.

More than 30 credit unions were forced to take legal action, pointing to a growing debt problem. The figures come just days after the High Court granted a request by the Central Bank to have a special manager appointed to Newbridge Credit Union.

Ernst & Young’s Luke Charleton has been brought in to deal with growing concerns over what, with €190million assets, is the country’s third-largest credit union.

One of the most alarming judgments granted over the four months was for €405,014 against a member of the St Raphael’s Garda Credit Union Ltd, in Dublin.

Over two days in November, the same credit union was granted judgments totalling €563,376.

The next highest order, for €129,179, was granted to Portlaoise Credit Union against a spa manager in the town.

A spokesman for the Irish League of Credit Unions said last night: ‘All credit unions encourage members who are having difficulty in repaying loans to contact the credit union at the earliest possible stage to discuss how the issues can be resolved through agreement.

‘We must ensure that monies outstanding are paid back in full, as the money belongs to other members.’

Ex-tycoon Sean Quinn down to his last few thousand Euro

HE MAY once have been Ireland’s richest man, or certainly the country’s biggest lender.

But former insurance and construction tycoon Sean Quinn says he has just €11,169, drives a €4,670 04-reg Merc and has little or no assets left.

Control of all his businesses have long been handed over to his children and all his worldwide assets have now been placed under the control of the Official Receiver in Northern Ireland.

According to a list of income, expenditure and assets provided at his recent bankruptcy application in Belfast, he has to pay £1,200 each month in utility bills at his palatial Cavan mansion.

Unlike so many other people these days, he is – however – fortunate enough not to have to make any mortgage payments on the sprawling Ballyconnell property.

It was also stated that the house was built and paid for by his children, who own it.

He also says that other monthly bills include £100 for clothes, £80 for travel, and £150 for phone.

Housekeeping – which includes cleaning bills and food – comes to £850-a-month.

Although his house is not mentioned as an asset in the documents lodged at Belfast’s High Court, the recent sale for £100,000 of a site at the address to his children is.

Mr Quinn, who is being pursued for more than €2billion in disputed debts by former Anglo Irish Bank, now IBRC, has just €137 in his Ballyconnell Ulster Bank account.

A Sterling amount of £69.36 is lodged with Bank of Ireland in Lisnakea in County Fermanagh and €10,951 in another account with the bank at its Cavan town branch.

Last Friday, Mr Quinn’s solicitor John Gordon told The Irish Times that the Statement of Affairs filed with the High Court in Belfast listed his assets as being less than £50,000 and stated he had no income.

He also stated that he had a pension which will pay him less than £10,000-a-year when he starts drawing down on it.

Mr Quinn’s lawyers will be in court on Monday in Dublin to respond to IBRC’s application to have his Northern Ireland bankruptcy over-turned.

They had applied for this in The Commercial Court last Monday but the matter was adjourned to give Mr Quinn’s legal team a chance to respond.

During their application, an affidavit by the bank’s lawyers revealed the extent to which officials had tried to establish where exactly Mr Quinn was based.

This was needed, they argued, to contradict his claim to have his main centre of business in Northern Ireland.

As part of his bankruptcy petition, he had said in a statement: ‘I was born, reared and worked all my life in Co Fermanagh.

‘It is for this reason that my bankruptcy application was made in Northern Ireland.’

His successful application caught IBRC by surprise and lawyers immediately began the process of ‘examining the validity of this application for bankruptcy’.

In a statement, they said they were doing this because they believed Mr Quinn’s main residence is in Co Cavan and because he has ‘extensive business interests and liabilities within the State’.

As part of their bid to have last Friday’s High Court declaration over turned on Monday, they attacked his claim to have most of his business interests in the North.

They surveyed more than 147 companies – 52 of which were registered in the UK – and noted that for his companies based in the Republic of Ireland, all 95 of them show his home address as being in Ballyconnell, Co Cavan.

The same address is given for his UK company directorships.

The IBRC insisted on Monday that Mr Quinn no longer actually has any UK-based directorships, despite the bankruptcy order in his favour listing his business address as being in Co Fermanagh, Northern Ireland.

‘That information is seriously at odds with (IBRC’s) information and accordingly, there exists a basis for challenging the determination that the seat of the main insolvency proceedings for Sean Quinn is Northern Ireland,’ they said.

‘(IBRC’s) consistent understanding of the business of Sean Quinn is inconsistent with the contention that his centre of main interest is Northern Ireland.’

They added: ‘(Mr Quinn) has consistently indicated that his home is at Ballyconnell, County Cavan in the Republic of Ireland.

‘He has done so in the Form B1 Annual Return of all 95 companies registered in the Republic of Ireland in respect of which he is or was a director.’

The bank, in its affidavit, insisted that since it has started to take action against Mr Quinn, he has ‘to (IBRS’s) consistent knowledge, been residing in and operating out of his family home in Ballyconnell and in offices at a disused tyre factory in Belturbet, Co Cavan.

‘All of the Quinn family live in this jurisdiction, they instruct solicitors in this jurisdiction to manage their affairs, their bank accounts are with Irish banks.

‘(IBRC’s) consistent understanding is that Sean Quinn has been operating out of Cavan.

‘In terms of a business premises, it has been (IBRC’s) consistent understanding that Sean Quinn has been operating from the tyre plant in Belturbet, Co Cavan.’

However, a day after details of this affidavit were published. Mr Quinn’s statement about his income, expenditure and assets were leaked to a newspaper.

The details are now being examined by IBRC’s legal team and are likely to feature again when their bid to overturn the bankruptcy returns to court on Monday.

An IBRC spokeswoman said last night: ‘IBRC welcomes the decision of the Commercial Court to enter the proceedings served against Sean and Patricia Quinn on 3 November 2011 to its list so that it will benefit from the expedited procedures available in that court.

‘IBRC will continue to seek to enforce the security granted in favour of it by the Quinns.

‘IBRC will contest the validity of Sean Quinn’s application for bankruptcy in the Northern Ireland.

‘As a nationalised financial institution, IBRC is determined to recoup its costs and to maximise recovery for the taxpayer and the State.’

ends

Bank of Ireland refuse to pass on ECB interest rate cut despite tax payers’ bail out

BANK of Ireland bosses are still refusing to pass on the European Central Bank’s 0.25 per cent base rate cut.

Despite receiving a hefty bailout from taxpayers, the bank’s bosses are continuing to ignore a call by the Government to change its rates in line with the ECB’s surprise 1.25 per cent rate.

Last night, a BoI spokesman repeated the same statement given on Thursday after AIB’s belated decision to pass the cut on to variable mortgage holders.

He said: ‘All our rates are under constant review.’

Ulster Bank, which has not been bailed out by taxpayers, is also refusing to pass on the reduction.

A spokesman said: ‘We keep all our products and services under continual review, having regard to our cost of funds.

‘Therefore, if the cost of funds goes down we would pass on those rates.’

Because it is not one of the bailed-out banks, Ulster Bank has not attracted as much anger as Bank of Ireland and AIB.

AIB had initially refused to cut rates. But after attending Wednesday’s meeting of the Economic Management Council with Enda Kenny and Eamon Gilmore, its bosses finally gave in to mounting pressure.

However, there been no contact between officials from Bank of Ireland or Ulster Bank and the Taoiseach since then.

People Before Profit TD Richard Boyd Barrett said last night: ‘The arrogance of Bank of Ireland is extraordinary and utterly scandalous.

‘It is a complete outrage that a bank that was bailed out and would not be in existence if it wasn’t for public taxes should still refuse to give taxpayers’ relief.

‘They are only interested in the bottom line.’

Government press secretary Feargal Purcell said: ‘We’ve had the meeting with the banks and it’s down to them to consider it.

‘There has been a very clear message sent from the Government by the Taoiseach to the banks.’

Central Bank of Ireland investigation into ‘unfounded’ European Bank Authority stress test claims

THE Central Bank has received allegations from one of its own officials that Irish bank stress test data it processed was ‘doctored’ before being passed on to Europe.

The official claims the Central Bank did this to ensure Irish banks passed European Banking Authority stress tests in July.

The allegation, which the Central Bank has dismissed as unfounded, has been the subject of a secret internal investigation.

The investigation was launched about two months ago after the claim was made by the official, who had worked on stress test data prior to it being sent to the EBA.

The official claimed to have worked on data that was then deliberately ‘dressed-up’ to ensure AIB, Bank of Ireland and Irish Life & Permanent passed.

The whistleblower has also claimed to have repeatedly flagged problems with the data that was submitted to the EBA – which has yet to receive details of the Central Bank’s internal investigation.

A Central Bank spokesman said last night: ‘In response to an employee’s complaint expressing a concern over the way in which the EBA stress testing procedure was applied in Ireland, Central Bank management commissioned an investigation.

‘This investigation was conducted by the Bank’s Internal Audit Department under the Bank’s “Speak-Up” policy.

‘Based on the report of this investigation, which has been accepted by the employee, Central Bank management is satisfied that, while the complaint was made in good faith, there is no reason for concern with the figures provided to the EBA.’

Oireachtas Finance Committee member Stephen Donnelly said last night: ‘I would like the Finance Minister to come back into the Dail with sufficient information about these allegations so Dail members can see whether further information is warranted.

‘Then perhaps the Financial Committee could look into these allegations on behalf of the Dail.

‘In particular, it could see whether or not inappropriate pressure was applied and to see what impact this might have had on the final EBA stress test results.’

The Wicklow Independent TD added: ‘It is not appropriate for the Central Bank to be the only body investigating serious allegations against it by one of its own employees and especially on such a serious issue as the bank stress tests.’

A spokesman for the European Banking Authority said last night: ‘We are not aware of this at the moment.

‘We have not been informed by the Central Bank.

‘If the Central Bank of Ireland has information like this, we are waiting for them to inform us.

Economist Constantin Gurdgiev last night called for an independent investigation into the allegations.

‘The fact that allegations of this nature have been made is a very serious and worrying development,’ he said.

‘With all due respect to the Central Bank, they should not be the only organisation investigating these allegations.

‘It is fair enough for them to deal with them internally as a matter of course, but there needs to be an independent examination of the allegations.

‘If anybody at the Central Bank had any kind of pressure put on them to deliver a certain set of results then that puts the entire banking process into question.’

Of the 91 banks assessed, the EBA awarded stress test pass marks to all but eight of Europe’s major lenders.

Those who passed were deemed capable of sustaining theoretical drops in stocks, bonds and property prices during a two-year recession.

As far as Irish banks were concerned, AIB, Bank of Ireland and Irish Life & Permanent all passed.

Had any one of them failed, they would have had just two months to come up with a plan to deal with their short-comings.

They could have also ended up having to return cap-in-hand to the government for more bail-out money.

News that there has even been an investigation – not to mention allegations – related to Central Bank stress-testing data comes at a worrying time for banking across Europe.

Just last month, analysts at US firm Goldman Sachs warned that more than half of Europe’s biggest lenders are likely to fail the EU banking watchdog’s latest health checks.

The Wall Street giant has warned that the region’s weak banks could be facing a shortfall of as much as £260bn if the EBA forces lenders to raise their capital buffers to 9pc of their total loan book.

Under pressure from critics, the EBA is re-working its widely derided examination of the EU’s banking system that was conducted in July.

But so far, at least one of the European banks that passed –  Dexia – has run into trouble.

It had to be rescued a few months later by the German and French governments.

Indeed, the whole issue of stress-testing has already been undermined in Ireland because AIB ended up needing a bail out despite passing stress-testing in 2010.

Despite the EPA’s decision to publish 3,000 points of data about each bank in its last round of stress tests, there has been a feeling that there was little real clarity about dangerous banking exposures that may still be lurking in the system.

In Ireland’s case, this could well relate to bad residential mortgage debt.

As the Irish Daily Mail revealed last year, AIB staff – according to a staff whistleblower – alone account for around €3billion of the bank’s debts.

That figure emerged before AIB announced its intention to shed more than 2,000 staff.

There has also been criticism that the July 2011 stress tests did not take into account the chances of a Eurozone company collapsing and defaulting on its debt.

With Greek teetering on the brink of financial oblivion and Italy now becoming more of an issue, these scenarios look ever more plausible.

At the time, ratings agency Standard & Poor’s had suggested the tests could have been much more severe.

And Francis Fitzherbert-Brockholes, a banking and capital markets partner at law firm White and Case, added: ‘Although the tests are apparently more robust now, they still do not assume a sovereign debt default, only a sovereign debt downgrade.’

Have you got a whistle to blow about Irish banking? Call 087 919 9113 or email contact @ irishwhistleblower.com.

AIB bow to ECB interest rate cut pressure

AIB has bowed to political pressure over its decision not to pass on the European Central Bank’s 0.25 per cent rate cut.

Last night, the bank issued a brief statement announcing it would pass on the rate cut to its mortgage holders.

But Bank of Ireland refused to say if it would follow suit.

Just after 7.30pm, an AIB spokesman stated: ‘Following the meeting between AIB, members of the Government and the Economic Management Council, the board of AIB has decided to implement a 0.25% interest rate cut to its variable rate mortgages.’

The decision comes a day after the bank’s bosses were hauled in for a meeting with Enda Kenny and Michael Noonan to explain why the rate cut had not been passed on.

Bank of Ireland and Ulster Bank bosses were also summoned to the meeting of Wednesday’s Economic Management Council meeting.

But when the bank bosses emerged on Wednesday, they infuriated the Government by saying they would not be cutting their interest rates.

It was a major humiliation for the Taoiseach and Finance Minister. It led to calls yesterday for the boards and public interest directors of AIB and Bank of Ireland to be sacked.

But AIB’s move is said to follow a lengthy phone conversation between AIB officials and Kenny earlier in the day.

Eamon Gilmore was pilloried and branded ‘pathetic’ in the Dáil yesterday for taking a soft stance with the lenders, which have been propped-up with billions in taxpayers’ cash.

The Tánaiste insisted he had been ‘very clear’ with the banks when they were summoned before the Government’s Economic Management Council on Wednesday.

AIB’s decision to pass on the rate cut is likely to bring an end to the demands for sackings.

The focus will now shift to Bank of Ireland, which was still offering no commitment to cut its mortgage rates.

When asked last night if it was going to follow AIB’s move, a spokesman told the Irish Daily Mail: ‘All the bank’s rates of interest are under review.’

Of the Government’s Economic Management Council meeting, Mr Gilmore said: ‘The representatives of the three banks who attended the meeting yesterday told us it was not their intention to pass on the reduction to their borrowers.

‘We made the Government’s view very clear to them, namely, that the interest rate reduction made by the ECB should be passed on.

‘People with mortgages need the reduction.’ Fianna Fáil deputy leader Éamon Ó Cuív described the refusal to pass on the reduction to domestic and business borrowers as ‘absolutely scandalous’.

He asked: ‘Will emergency legislation be introduced in the House next week to give the Financial Regulator the power to force the banks to pass on the ECB interest rate reduction?

‘Will the Government replace forthwith all public interest directors who are now not acting in the public interest?

‘Will it seek an immediate emergency general meeting of the guaranteed banks to remove the remaining directors?’

‘It is time the Government walked the walk rather than just talked the talk.’ Sinn Féin TD Caoimhghín Ó Caoláin noted that Junior Minister Brian Hayes had described the response of bank executives as ‘pathetic’.

The Monaghan TD said the word would be better applied to the failure of the Government to take on the banks.

He said: ‘In response to their polite request that the banks pass on the recent interest rate reduction, they were told, no.

‘The Government will have to take the decision to stand up and confront the banks to protect the interests of ordinary mortgage holders.’

While brushing off calls to lower rates earlier this week, AIB’s executive chairman David Hodgkinson said: ‘We have cut rates in EBS [now a subsidiary of AIB], but we are the lowest in the market and we will remain that way.

‘Because we didn’t increase our rates, we’re not going to decrease them.’ Customers affected are those with standard variable rate mortgages. With tracker mortgages, any changes in the ECB rate must automatically be passed on to the customer.

However, with standard variable rate mortgages, the banks have discretion.