Ceisteanna—Questions. Oral Answers. - Irish Trust Bank. – Dáil Éireann (21st Dáil) – Wednesday, 12 Oct 1977

Ceisteanna—Questions. Oral Answers. - Irish Trust Bank.

26.

Mr. B. Desmond

asked the Minister for Finance the total amount of disbursements to date from State funds in respect of ex-gratia payments to (a) directors, (b) shareholders, (c) depositors and (d) other creditors, of the Irish Trust Bank; whether any investigations were undertaken to ensure that these disbursements were justified in each case, and, if so, the results of such investigations; the number of cases where payments of (a) up to £10,000 and (b) in excess of £10,000 were made; and the names and addresses of recipients in each case; why the Government refused to accept the advice of the Central Bank proposing a ceiling on any refund of deposits; and the cost of the limited refund scheme proposed by the Central Bank if it had been implemented.

27.

Mr. Keating

asked the Minister for Finance if he will furnish a full list of depositors with the Irish Trust Bank who are expected to benefit from the Government's policy of refunding their losses; and the percentage of the total which is to be refunded to sources abroad.

Mr. Colley

With the permission of the Ceann Comhairle, I will take Questions Nos. 26 and 27 together.

No disbursements have been made to date from State funds in respect of ex gratia payments to directors, share-holders, depositors or other creditors of Irish Trust Bank Ltd.

While the Government welcomed the Central Bank's proposal to make limited advance payments totalling approximately £1 million to depositors, they decided, for the reasons outlined in my statement of 10th August, that, as an exceptional measure, full payments should be made and requested the bank to arrange for this to be done. In accordance with this arrangement the Central Bank has made available approximately £2.9 million to the official liquidator to enable him to repay to depositors, with the approval of the High Court, the outstanding balance of their claims as admitted by the court examiner. Connected depositors, such as directors and major shareholders, and trade creditors will not benefit. The Central Bank will rank as a creditor in respect of its outlay and will share in any further distributions that may be made by the liquidator.

The Government agreed that the additional cost of £1.9 million approximately, to the extent not recovered from the liquidation, would be recouped to the bank from the Exchequer, subject to the voting of the necessary moneys. I shall be asking the House to agree to a Supplementary Estimate for this purpose in due course.

While investigations into individual cases were not made by my Department, I have no information that would imply that the payments were not justified in each case. In this regard I would point out that the liquidation is being carried out under the supervision of the High Court and moneys received by the liquidator may be distributed only to persons whose claims have been admitted by the court examiner. In addition, specific arrangements were made to exclude from benefit directors and major shareholders.

The names and addresses of depositors are not available to my Department. I am informed that 1,045 depositors received payments not exceeding £10,000 and 48 were paid sums in excess of £10,000.

Approximately 58 per cent of the total was due to depositors with addresses outside the State.

Mr. Keating

Would the Minister agree that it is most unacceptable to this House to have a situation in which it is proposed to seek approval of payment of public moneys to people, and presumably organisations and trusts, about whom this House cannot be assured, or about whom they have no information? Would the Minister share my extreme concern that in such a procedure there is no guarantee in regard to the integrity of associations or individuals and whatever connections they might have? With respect, the Minister has not answered my question. Would the Minister agree it is important that we know to whom these moneys are being paid?

Mr. Colley

I have in fact answered the Deputy's question by telling him that the names and addresses of the shareholders are not available to me. I have also given him, as he requested, the percentage of the total which is to be refunded to sources abroad. However, I would reiterate that the payments can be made only after the claims have been examined and passed by the examiner acting under the authority of the High Court. Since I do not know the people concerned I can act only on the basis of those admitted by the examiner. I have no reason whatever to believe that there is any reason that the recipients of such money should not receive it.

Mr. Keating

Would the Minister agree that, on his part, that is giving a blank cheque in such a situation, that there is no assurance there that the individuals or organisations concerned, for example, may not be associated with organisations that might be engaged in activities which would not be helpful to the State? I am merely posing a hypothetical situation. In other words, could the Minister give his personal assurance, on his honour, that anybody who benefits from public funds is of the highest integrity and that there is no illegal or unlawful connection with such payments?

Mr. Colley

As regards persons in receipt of public funds being of the highest integrity, I am afraid there are many recipients of public funds who could not fall into that category. Perhaps I might summarise what the Deputy has in mind by saying I am satisfied that no benefit is accruing from these payments to subversive organisations, directly or indirectly, if that is what he is worried about.

Mr. P. Barry

How can the Minister be sure of that if he has not the list of people who are getting money? He said the list was not available to him. How can he be sure of that if he has not got the total list?

Mr. Colley

That is a matter on which I do not wish to enter into too great detail.

Mr. B. Desmond

Very wisely.

Mr. Colley

I suggest to the Deputy, if he is worried about it, that he might consult with one or two of his former colleagues in Government who know what I am talking about.

(Interruptions.)

Mr. R. Ryan

Accepting that Deputy Colley and his colleagues prior to the election might in good faith have given this undertaking, would the Minister consider it was right to discharge that undertaking in the light of the information which I know is in his Department, and which is also available to the Department of Justice, which certainly indicates that a number of the depositors are not above the taint of suspicion in relation to illegal activities?

My second question is this: how can the Minister justify this decision in the light of the fact that people are encouraged to put money, at a lower rate of interest than that offered by the Irish Trust Bank, in various deposits in this country because they carry a State guarantee? Would the Minister not agree that the real effect of his decision now is to indicate to people that they may as well put their money where there is the highest rate and greatest risk because the Fianna Fáil Party, at any time, will buy their votes by using the taxpayers' money instead of doing what they ought, that is, ensuring the safety, sanctity and respect of all deposits in this State which carry a State guarantee?

Mr. Colley

To deal with the first point raised by Deputy Ryan, I was giving himself and his former colleagues in Government credit for the fact that they had taken some steps to ascertain the position in regard to what I might term briefly the danger of subversive interest in these moneys. Perhaps the results of those inquiries had not accrued before Deputy Ryan left office.

Mr. R. Ryan

They had.

Mr. Colley

But they did accrue before any money was paid out and they were quite categorical.

On the second point, the Deputy of course is misrepresenting the position. It was made perfectly clear that this decision was made as an exceptional matter because this was the first case in which a bank which had been licensed by the Central Bank had got into this kind of difficulty. As a result we were satisfied from the evidence available to us that many people at home and abroad had invested money in this bank in the bona fide belief that it had the backing of the State when in fact it had not. As I have already announced that as a consequence, we are taking steps to deal with that matter and to strengthen the legislation. But it would be very wrong for anybody to assume that they may, without any risk, invest in other forms of investment yielding a high interest and expect to be covered by the State. I have made it perfectly clear that anybody who does that in future and who expects to be covered will be sadly disappointed.

Mr. R. Ryan

With the permission of the Ceann Comhairle, I should like to raise this on the adjournment.

An Ceann Comhairle

I will communicate with the Deputy.

Mr. B. Desmond

May I ask the Minister when we may have an opportunity of debating in a more elaborate manner their pre-election guarantees to certain individuals? When will we have a Supplementary Estimate circulated?

Mr. Colley

I am afraid I am not in a position to indicate that at present.

Mr. B. Desmond

Moneys are being paid out which have not been passed by this House.

Mr. Colley

I have informed the House about that. The Deputy is adding nothing to our store of knowledge by that statement. The fact is I do not have available at my fingertips the date on which this would come in. It depends on some factors outside my control but the Deputy can rest assured that as soon as it is possible for me to bring before the House proposals for the Supplementary Estimate that will be done.

Mr. Enright

Would the Minister not consider it advisable that all banks who have licences from the Central Bank should in the future be obliged to have some kind of fund available and that in the event of a bank getting into difficulty this fund would be there to meet losses incurred by people? I am sure the Minister is aware that a number of professional bodies, including insurance companies, have such an arrangement.

Mr. Colley

Part of the proposals we have in mind and which we will be bringing before the House in the form of legislation involve the provision of funds or the setting up of a fund to give at least partial recompense to people in such circumstances in the future.

Dáil Éireann debate -
Wednesday, 12 Oct 1977