TAOISEACH Enda Kenny has said it is up to the liquidator to decide what to do with up to €12m invested by credit unions in the former Anglo Irish Bank.
The Irish Independent revealed last week that up to 12 credit unions were at risk of losing millions of euro following the liquidation of the bank.
In the Dail, Mr Kenny said it was up to the liquidator of IBRC – formerly Anglo- to find out the facts of what is involved.
"The liquidator is entitled to analyse what exactly is the situation in the liquidated IBRC," he said.
But Fianna Fail leader Micheal Martin said it was incredible that Mr Kenny was not aware of what was going to happen.
“Bank bondholders - senior bondholders - were protected and now we find ourselves in the incredible position where credit unions have been burned essentially,” he said.
The IBRC liquidator, Kieran Wallace of KMPG, has told the credit unions that they rank as unsecured creditors, meaning there is very little chance of them getting back any of their money.
The credit unions were told two years ago that their money could not be moved from Anglo to AIB for safekeeping because they were in a special "structured deposit" bond scheme lasting eight years. And they were reassured that the money was protected by state banking guarantee. But the Department of Finance has confirmed that the credit union money was invested in an "equity-linked bond" with no guarantee that they would get their money back.
It is one of the unexpected consequences of the dramatic liquidation of Irish Bank Resolution Company (IBRC), formerly Anglo, which required an overnight sitting of the Dail and Seanad last week.
And it is another blow to the credit union movement, which has already been “burned” to the tune of €22.4m on junior bond investments in Anglo and €90m on junior bonds in AIB, Bank of Ireland and Permanent TSB.