Saturday 18 November 2017

Minister 'abused position' in debt talks with AIB

Perry faces demands to resign

Minister of State John Perry pictured outside Leinster House
Minister of State John Perry pictured outside Leinster House
Minister of State John Perry pictured outside Leinster House
Michael Brennan

Michael Brennan

EMBATTLED TD John Perry is accused of abusing his ministerial position after a series of revelations about his contact with senior bankers over his debts.

It has emerged that the Junior Minister for Small Business contacted the head of state-owned AIB about his financial difficulties as he faced demands to repay almost €2.5m to Danske Bank. The Fine Gael TD had "discussions" with AIB chief David Duffy as pressure built over his debts.

It has also emerged that Mr Perry said he "knew" Bank of Ireland chief executive Richie Boucher.

The new revelations about Mr Perry's contact with the boss at AIB, which is 99pc state-owned, raise further concerns about conflict of interest.

Court documents also show Mr Perry sent a letter to a bank official about his financial difficulties using his title of "Minister for Small Business".

He declined, however, to say whether it had been appropriate for him to use his position while writing to National Irish Bank, which was later taken over by Danske Bank.

Mr Perry also declined to answer questions about his meeting with Mr Duffy. It is understood AIB ultimately did not provide him with any loan.

He is still seeking a way to repay Danske Bank the €2.47m it is demanding after he and his wife, Marie, consented to a High Court judgment earlier this week.

He has six weeks to come up with a means of paying the money, and calls are mounting for him to resign.

FG Longford councillor Colm Murray became the first in his party to call on Mr Perry to quit as a result of the court judgment.

"I think as the Minister for Small Business he may have to resign. He's not setting a great example, going in over his head that much. In my opinion, I think his position is untenable," he said.

Sinn Fein finance spokesman Pearse Doherty called on Mr Perry to go if he could not allay the growing public concerns over his financial affairs.

"I don't think this can go on much longer, that information continues to seep out which continues to damage not only the minister but also the position that he holds," he said.

Mr Doherty said there was now a perception that Mr Perry had tried to use his office to benefit himself by contacting senior bankers about his own financial difficulties.

"That is access that only a senior minister has. It's influence he has gained as a result of his position. That is against the code of ethics," he said.

The controversy began in October 2011 when Danske Bank loaned Mr Perry and his wife €2.47m to restructure existing loans and an overdraft account and provide €25,000 towards tax affairs. It was due to be repaid last November.

The loans were secured by first legal mortgages over their property including Perry's Hardware store and the Stone Park restaurant in Mr Perry's home town of Ballymote, Co Sligo.

Mr Perry has been given until September 2 to deal with the judgment against him. If he is unable to repay the €2.47m and is declared bankrupt at the behest of Danske Bank, he will have to give up his Dail seat.

As recently as April, he was being encouraged by Danske Bank to contact whatever banks he had relationships with "to get an offer to take us out".

Around the same time, due to his role as chairman of the Government's Advisory Group for Small Businesses, he was calling senior officials from the banks to ask them questions about lending to small businesses.

In April, Mr Perry sent a letter to AIB's David Duffy and Bank of Ireland's Richie Boucher, inviting them to attend a meeting of his group to discuss how they were dealing with lending and debt problems.

FAILURE

"Access to finance can mean the difference between survival, or failure, for many viable new start-ups and existing small businesses," he said then.

Two days later, he mentioned his contacts with Mr Duffy and his knowledge of Mr Boucher in his meeting with Dankse Bank about his outstanding €2.47m loan.

In the Dail later that month, he told TDs he had met representatives of banks in recent weeks. "They are very much determined to support small companies," he said.

Court documents also show Mr Perry sent a letter to a bank official about his own financial difficulties on notepaper containing his title as "Minister for Small Business".

Communications Minister Pat Rabbitte said he believed there were thousands of people who would sympathise with Mr Perry's current difficulties.

A spokeswoman for AIB said Mr Duffy played no role in sanctioning loans, regardless of who was applying for them.

 

The chain of events

* October 2011 Danske makes a loan of €2.47m to Mr Perry and his wife Marie to restructure existing loans and an overdraft account, and provide €25,000 towards tax affairs.

It was due to be repaid in November 2012. The loans were secured by first legal mortgages over properties including Perry's Hardware store and the Stone Park restaurant at Main Street, Ballymote, Co Sligo.

* December 2011 Mr Perry phoned Danske Bank saying rent payments from the supermarket in Ballymote would not start until January 2012, due to agreed rent deductions. He later missed the first scheduled loan repayment.

* January 18, 2012 Mr Perry told the bank he had to spend €20,000 installing a firewall between the supermarket in Ballymote and an adjoining premises. Mr Perry said he had to pay miscellaneous creditors arising from his previous trading in the supermarket.

He said AIB had agreed to provide an 11-year facility to fund a €125,000 settlement with these creditors. He also told the bank that Bank of Ireland had agreed to give him a 10-year loan to help him address tax arrears of €125,000.

* November 2012 With the entire €2.47m loan due for repayment, Danske Bank said it wanted a response from Mr Perry within two weeks. It said total repayments amounted to just €57,134.

* January 31 2013 Danske Bank told Mr Perry it was now "end game" after supporting him for the past two years while he was in a default position. Mr Perry expressed shock at Danske Bank's "aggressive approach".

He indicated that this was a "form of bullying" and asked if the bank was dealing with all its customers in a similar way.

* March 2013 Danske Bank demanded immediate payment from Mr Perry of the €2.47m.

* April 17 2013 Mr Perry tells Danske Bank that he has been in discussions with AIB chief executive David Duffy and that he knows Bank of Ireland chief executive Richie Boucher. The bank told him the next step was a court judgment against him.

* May 2013 Danske Bank demanded repayment within seven days from Mr Perry and noted interest was still accruing on the sum owed. Mr Perry said that AIB was still considering his request for financing.

* July 2013 Danske Bank secured judgment for €2.47m against Mr Perry and his wife. Mr Justice Peter Kelly stayed the judgment to September 2 to allow them time to try to restructure loans.

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News