Loans given to former ILCU director breached law
AMONG the problem loans at Berehaven Credit Union were those taken out by a former director of the Irish League of Credit Unions.
Limerick-based Matt Heffernan has loans from the credit union that are so large they are in breach of the law, an internal report alleges.
The Irish League of Credit Unions has notified gardai about the loans, as the Irish Independent first reported in April last year.
Loans of €350,000 for houses in Spain and Bulgaria are central to the league's concerns.
Mr Heffernan subsequently stepped down as a director of the league, the body that represents most credit unions in the State.
The loans drawn down breached the Credit Union Act because of their size, confidential documents uncovered by the Irish Independent show.
Gardai have been informed that application forms for loans for Mr Heffernan contained incorrect personal information, giving a different address and occupation to the ones he has.
Mr Heffernan is a former field officer with the league, a job that involved him monitoring the activities of a set number of credit unions in the south of the country, including Berehaven Credit Union.
One of the reasons for the collapse of Berehaven was the failure of the board of the credit union to report to the Central Bank loans to connected parties, including officers of the credit unions.
Documents seen by this newspaper show he obtained loans totalling €350,000 to buy foreign properties from Berehaven, which he had been charged with monitoring from 2001.
A probe into the Co Cork credit union by accountants KPMG points out that the loans were not being repaid. He took out the loans jointly in the name of other members of Berehaven Credit Union, the KPMG documents state. Some of these people may not have been aware their names were on loans.
According to the KPMG report the loans were reviewed, and it was "concluded that 100pc of the drawn-down loans associated with Mr Heffernan required provisioning".
This means the credit union was forced to put funds aside as it fears they will not be repaid.
Mr Heffernan had inspected the credit union in 2007 and 2009 in his role as a field officer for the league. His reports made no reference to his loans with the credit union he had inspected, according to the KPMG investigation.
He had an obligation to declare his interest in the loans at the Co Cork credit union to the league, but he did not, KPMG concluded.
Mr Heffernan was elected to the board of the League of Credit Unions in February. The league said directors are elected by affiliated credit unions.
He is also been involved with Caherdavin credit union in Limerick, despite credit union rules banning membership of more than one of the locally-owned lenders.
And he has been associated with Kilmallock Credit Union, Co Limerick.
Issues raised in the KPMG report are understood to have been reported to gardai in Cork and Dublin.
Mr Heffernan had no comment when he was contacted by this newspaper. He said he had not seen the KPMG report and insisted his loans were a private matter.
Gardai said last night that their inquiries are ongoing.
A file will then be sent to the Director of Public Prosecutions, who will determine what action will be taken.