Vol. 193 No. 7
asked the Minister for Finance if he is aware that Members of the House have been sent circulars by a former manager and secretary of a company (name supplied) requesting that an enquiry be held in regard to various allegations stated in the circular; and if, in the public interest, he will make a statement to the House.
14.
asked the Minister for Finance whether he received a request to enquire into the alleged causes of losses amounting to almost £1,000,000 suffered by a company (name supplied); and, if so, if he will make a statement on the matter having regard to the fact that the company concerned is wholly owned by the Irish Life Assurance Company Limited in which he holds about 90 per cent. of the shares.
15.
asked the Minister for Finance if he has seen a copy of a circular letter dated 23rd February, 1962 sent to many Members in reference to a certain company in which he has a 90 per cent. holding; whether it was sent to him; what action he proposes to take in respect thereof; in particular if he obtained reports from the persons therein named; and, if so, if he will make them available for inspection by Members.
16.
andMr. McQuillan asked the Minister for Finance whether he has received representations requesting him to have conducted a sworn inquiry into the affairs of the Irish Life Assurance Company Limited, in particular in relation to its subsidiary, Irish Estates Limited; and, if so, in view of the seriousness of the charges made, if he proposes to set up the inquiry without delay.
I propose, with the permission of the Ceann Comhairle, to take Questions Nos. 13, 14, 15 and 16 together.
I have seen a copy of a circular letter dated 23rd February, 1962, which, I understand, has been received by a number of Deputies.
The allegations contained in the letter had already been conveyed to me by the writer in June last. I made appropriate inquiries, and was satisfied that the matter did not call for any further action by me.
The allegations refer to the acquisition and development by the Irish Life Assurance Company, Limited, through a wholly-owned subsidiary company, Irish Estates, Limited, of various properties pursuant to a policy of property investment initiated in 1946 and discontinued in 1956. I am assured by the Directors of the parent company that all the relevant decisions in relation to these matters were properly taken. No irregularity emerged in course of any of the annual audits of the accounts and the auditors have indicated that no official at any time brought to their notice any irregularity which would in their opinion have called for a report to the Shareholders or to the Board.
Furthermore, the solicitors to both companies have indicated that they do not recall that any employee of the subsidiary company brought to their notice, and that they are not aware of, any irregularity which would in their view justify their seeking special instructions from the Board.
The investments in property development were made at a time when interest rates were much lower than at present. These investments are yielding the return then expected of them which is, of course, lower than would be acceptable on new money invested at the present time.
The profits or losses on any investment can only be known if and when the investment is realised. I am informed by the Board of the Irish Life Assurance Company that it is not the intention to realise the investments in question apart from certain undeveloped properties which have been or are being disposed of. The losses on these will not be a serious embarrassment to the Company, as they are small in relation to total resources and to the reserves available.
The audited published accounts of the Irish Life Assurance Company show that it is in a sound financial position and that its assets have been increasing at the rate of around £2,000,000 a year. At 31st December, 1960, they stood at £31.8 millions. Since 1954 distributable valuation surpluses have emerged at each valuation. Following the most recent valuation at the end of 1959 some £325,000 was made available for bonuses for policy holders and some £50,000 for dividends to shareholders. A further valuation is now due.
I do not propose to make available to Deputies the confidential information I received in my examination of the allegations.
In view of the publicity now given to the allegations, the Board of the parent company have informed me that they have asked the Minister for Industry and Commerce to appoint an inspector to hold an investigation into the affairs of Irish Estates, Limited, under Section 109 of the Companies Act, 1908.
Would the Minister say on what date was the Minister for Industry and Commerce asked to appoint an inspector to conduct an inquiry?
He was never asked to appoint an inspector.
On what date?
On what date was the Minister asked to appoint an inspector to hold an inquiry?
I do not know. The Deputy will have to ask the question again.
In view of the fact that a reputable chartered accountant certified losses of £675,000, which he believes were incurred because of the inflated prices paid for certain properties in the absence of the advice, and sometimes against the advice of the architect, the manager, and the surveyor to the firm in question how can the Minister feel justified in saying he is not now called upon to take drastic action?
I want to make it clear that the company have asked for an investigation. If the Deputy is seriously anxious that an investigation should be held, is it not very unfair and unwise for him to make the allegation that £675,000 represents losses?
The investigation should not have awaited the dismissal of this unfortunate man; he was dismissed because he reported the matter to the Minister seven months ago to enable him to bring it to the notice of Dáil Éireann.
That will all be investigated in the inquiry.
In view of the fact that there will be an inquiry, I do not propose to comment, but may I inquire from the Minister whether, when he received representations last June, he asked the auditor to the company for a report as well as asking the Board?
I asked the Board for a report.
Did the Minister asked the auditor to the company for a report?
No.
Does the Minister not consider that should have been the normal course of action for him to take?
It would be a normal course, if I had any reason to doubt the report which the Board themselves gave me.
Is it not a fact that last June the Minister was asked to have an inquiry held under the Companies Act of 1908, an inquiry by an inspector on the very same lines as he now suggests he is prepared to hold? Will he tell the House why he failed last June, when he was asked to have an inquiry, to set up the inquiry? Why is it that within the past fortnight, his colleague, the Minister for Industry and Commerce, said in reply to a question that he was satisfied the affairs of the Board were in order and there was no need for an inquiry?
I was not involved in it at all.
Would the Minister say what has happened in the past fortnight to make him change his mind?
I have not changed my mind at all. My investigations satisfied me that nothing irregular had been done. I want to emphasise this: there may have been losses, but there was nothing irregular. I was, therefore, satisfied that I had no further function. The Board have now applied to the Minister for Industry and Commerce for an investigation.
As a result of the inquiries here—is that not right?
Oh, sure. If the Deputy wants to take credit for it, he can have it.
Would the Minister say whether it is intended to publish the report of the inspector?
I do not know what the practice is. I could not tell the Deputy really.
In view of the fact that the matter has been raised here and has assumed some importance, would the Minister arrange that the inspector's report will be published?
From now on, it is a matter for the Minister for Industry and Commerce.
Would the Minister say if, in future, a manager of a State or semi-State body reports an irregularity to him, he will stand over a board dismissing a man for doing what it is his conscientious duty to do?
That is a different question altogether.
Does the Minister stand over dismissing the manager peremptorily because he brought to the notice of the Minister what he believed to be an irregularity?
If the Deputy wants to be a champion of justice, that is all right, but he ought not to put me in the position of being a champion of injustice.
That is what the Minister was until we informed him on the matter.
The Minister is the main shareholder in the company. In view of the allegations now made, will he ensure that the inspector's report is published so that he can be satisfied, and the public can be satisfied, that his nominees in the company safe-guarded as far as possible the investments of the company?
That, of course, is a matter for the Minister for Industry and Commerce. I do not know what the practice is.
In view of the fact that the Minister concedes very disquieting charges have been made and published, would he not take power, if he has not already got power, to hold a public inquiry into this apparently serious scandal in the management of the affairs of this company?
I might say that the request from the company reached me only this morning. There is no significance whatever attached to these questions.
