Coalition bows to pressure and announces IBRC probe
Noonan announces fresh review by a Commission of Investigation
The Government yesterday bowed to mounting political pressure and established a Commission of Investigation to review transactions and leading practices at Irish Bank Resolution Corporation (IBRC).
Finance Minister Michael Noonan brought the proposal to Cabinet on the back of allegations of inadequate corporate governance at the former Anglo Irish Bank raised by Independent TD Catherine Murphy.
The move sees Mr Noonan abandon the review of IBRC transactions by KPMG special liquidators Kieran Wallace and Eamonn Richardson, which he initiated last month.
Last night, Mr Noonan admitted his original review was now "insufficient" and an investigation led by a judge was the appropriate way to deal with the new allegations.
The minister said there were lots of allegations levelled at the bank but he has yet to see any evidence of wrongdoing. He said the IBRC board at the time were "very dedicated people".
"We can't have a belief going around that there were actions taken that were improper and that somehow or other the taxpayer lost out," Mr Noonan said.
The Irish Independent understands there were robust discussions between Fine Gael and Labour over the course of two Cabinet meetings dealing with the establishment of the investigation.
Ms Murphy cautiously welcomed the investigation, saying she hoped the inquiry will comprehensively deal with all the areas of concerns she raised.
"I absolutely welcome it but obviously I hope it will cover everything and we don't need a second bite at this," Ms Murphy told the Irish Independent.
The commission will investigate all transactions, activities and management decisions at IBRC which resulted in a loss of €10m to the taxpayer. It will also investigate any action where there is public concern, irrespective of taxpayer loss.
It will investigate governance controls and procedure, the performance of senior managers and allegations of unusual share trading. Interest rates and loan extensions which resulted in a concession of €4m will also be investigated.
The liquidators' review was established after concerns were raised by Ms Murphy over the sale of Siteserv to a company owned by businessman Denis O'Brien.
Ms Murphy, who has been personally investigating IBRC since last year, has been severely critical of Mr Noonan's proposed review of the failed lender.
During her controversial Dáil speech, which sparked claims of a constitutional crisis, Ms Murphy argued that Mr Wallace should not be involved in the investigation of IBRC deals because he was involved in the sale of Siteserv. She was also critical of the fact Mr Wallace, as the bank's liquidator, joined IBRC and Mr O'Brien in his injunction case against RTÉ.
The station planned to broadcast details of the businessman's personal banking affairs with IBRC.
Yesterday, Ms Murphy said Mr Noonan's first review would "not stand any sort of test" due to the conflict of interest with Mr Wallace.
"How could you stand over an investigation where a person a party to the transaction being investigated was actually part of the investigation himself?"
Under Dáil privilege, Ms Murphy claimed Mr O'Brien received "extremely favourable" interest rates from IBRC.
She said the telecoms billionaire was paying a rate 1.25pc on loans of around €500m when he "arguably" should have been charged around 7.5pc.
The Kildare North TD claimed this was arranged through a verbal agreement with IBRC's then-chief executive Mike Aynsley and not cleared by the bank's credit committee.
Mr O'Brien accused Ms Murphy of "peddling lies" and insisted the information she brought before the Dáil is full of inaccuracies.
The Commission of Investigation will review the interest rate Mr O'Brien received on his loan and those received by other IBRC customers.
In a statement last week, Mr Aynsley denied that Mr O'Brien, or any other borrower, had received any special treatment.
Mr Noonan said he hoped the commission will report to him by the end of the year.
Opposition leaders accused the Government of "U-turning" on its initial review.