One of the country's foremost property developers has called on the members of the Banking Inquiry to investigate claims that Anglo Irish Bank overcharged its clients on their loan repayments for years.
John Flynn, who developed large swathes of Dublin's Smithfield, wrote to the inquiry on December 26 last with the findings of an expert report he commissioned on the matter, as well as discussions he had with Anglo's former chief executive David Drumm.
In his letter, a copy of which has been seen by the Sunday Independent, Mr Flynn told the inquiry's chairman, Ciaran Lynch, that the loading of interest rates at Anglo had been "systemic within the [Anglo Irish] bank from the early 1990s". Mr Flynn said this had been confirmed to him by former Anglo chief David Drumm at a meeting in Boston in October 2010.
Since taking legal action on the matter in the United States, Mr Flynn said the bank's special liquidator, Kieran Wallace, had confirmed in the course of one set of proceedings that the IBRC "did realise that it had an overcharging issue", and that this had been the subject of a report ordered by its former CEO Mike Aynsley in 2010.
Mr Flynn said in his letter to the Banking Inquiry that the findings of this report had been submitted by the IBRC to the Central Bank and Financial Regulator but had never been published and as such, remained "unknown to the public".
Notwithstanding that fact, in November 2012, finance minister Michael Noonan informed the Dail that the IBRC was in the process of refunding in the region of €50m to customers of Anglo Irish Bank for overcharging that had occurred in the eight-year period leading up to 2004.
In its initial estimate in September 2010, the IBRC said it expected it would have to refund up to €100m to deal with the issue.
The IBRC review undertook an examination of historical interest rate-setting procedures applied by Anglo Irish Bank in the period between 1996 and 2004. It found that interest rates applied in some cases were inconsistent with the terms of the loan documentation.
Supporting that claim, Mr Flynn wrote: "In October 2014, Ms Justice Finlay Geoghegan in Anglo Irish Bank vs John Morrissey found that Anglo Irish Bank overcharged customers with an extra five days interest per annum."
Asked by the Sunday Independent if Mr Flynn would be called to discuss his claims in relation to Anglo's overcharging, a spokesman for the Banking Inquiry said: "The inquiry is not an appropriate vehicle to pursue individual complaints against financial authorities or services."
Commenting on the possibility of Mr Flynn being called as witness in his capacity as a major property developer whose loans were in Nama, the spokesman added: "Given the wide scope of the inquiry terms of reference and the final reporting date of 30 November, 2015 set by the Houses, it would not be possible or appropriate for the Inquiry to bring in every witness that has been suggested or requested."
While Nama's operations may not fall within the remit of the Banking Inquiry's investigations, Mr Flynn took the opportunity to inform its chairman Ciaran Lynch in his letter of his and his family's personal experience of the agency. This culminated in a High Court case taken by Mr Flynn's wife, Leona, after Nama attempted to call in €21.9m in loans which it claimed were in default.
Referring to the judgment of Mr Justice John Cregan in that case, Mr Flynn noted the judge had said that Nama's subsidiary, Nalm, "gave misleading reasons for calling in the loans" and had "acted unfairly and unlawfully and in breach of its statutory duty of transparency".
The judge further noted that: "If the real reasons [for calling in loans] are not set out, it creates a suspicion in the eyes of the affected person that he has not been told the real reasons for the decision.
"It is in this atmosphere of unspoken reasons that suspicion of government agencies thrives. This is not in the public interest. It is not conducive to public trust in a vital state body such as Nama," Mr Justice Cregan concluded.
While Mr Flynn said in his letter that he was on the point of exiting Nama, he did not believe this relieved him of the responsibility to highlight the IBRC interest-rate issue. "We are determined that the duty of transparency to which Mr Justice Cregan referred as required of state bodies will be upheld and that the rule of law will prevail..." he wrote.