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Criminality fears are highlighted in probe on AIB, EBS, Dáil told

Building society facing case over 'pressure to promote investments'


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Alleged criminality at the heart of the banking sector has been highlighted in a report by a former senior garda, the Dáil has been told.

The report relates to claims made about certain management members at AIB and its subsidiary EBS, according to Independent TD Michael Healy-Rae.

The Irish Independent understands the document is set to feature in a High Court civil action being taken against EBS by a tied agent of the building society.

The dispute centres on claims by Betty Martin Financial Services Ltd (BMFS), a firm with offices in Lucan, Athlone and Longford, about the alleged mis-selling of investment products.

It is claimed agents were pressured to get customers to invest in higher-risk products not suitable for their circumstances.

It is understood an internal audit by AIB, completed in December 2017, found allegations made against one particular EBS official were not substantiated.

In May 2017, an EBS official issued notice that BMFS's tied-agent agreement was to be terminated. This was lifted the following month.

However, in February last year, EBS again informed the company of its intention to terminate the agreement, a decision due to take effect next month. BMFS is opposing the move.

The case had been due to be heard yesterday, but has been put back to next week.

Mr Healy-Rae did not refer to the legal action during his contribution in the Dáil.

However, he highlighted the role of "former EBS agents" in commissioning a report "into the behaviour of EBS/AIB management" from a former detective chief superintendent previous attached to the National Bureau of Criminal Investigation.

"It alleges criminality," said Mr Healy-Rae.

"These agents all have a common denominator. They all follow the Central Bank code of conduct. These agents acted with honesty. They put their customers first.

"And for their troubles many of them had their service terminated on a no fault basis."

Mr Healy-Rae asked Taoiseach Leo Varadkar what action he and the Government were "going to take on foot of this very important report, which as I say alleges criminality at the heart of our banking sector". The TD said he believed it had to be investigated and that there needed to be "follow-up" from Justice Minister Charlie Flanagan.

Mr Varadkar said he could not comment on the report as he hadn't seen it. A spokesman for Finance Minister Paschal Donohoe said it would not be appropriate for him to comment either as the matter was before the courts.

AIB declined to comment. In a statement, the bank said: "We have no comment to make on this as it relates to an ongoing legal case."

BMFS issued proceedings against EBS on December 18.

Since then, 15 affidavits have been filed by people involved in the action. These include Declan Martin, a director of BMFS, Shane Kavanagh, who previously operated an EBS branch as a tied agent in Citywest, Co Dublin, and Gerry Owens, who previously operated an EBS branch in Cork as a tied agent.

Irish Independent