asked the Minister for Finance the money which would be needed to recoup the Exchequer and/or the Central Bank for refunds made to depositors of the Irish Trust Bank; and if, in view of the steps taken to recoup in full all the shareholders of the Irish Trust Bank, the Dáil is entitled to know what losses, if any, will arise as a result of such refunds to shareholders.
Ceisteanna—Questions. Oral Answers. - Irish Trust Bank.
12.
(Clare): As I indicated in my reply of Wednesday, 9 June 1982, the total outlay by the Exchequer and the Central Bank in respect of repayment of depositors in Irish Trust Bank Limited was £2,863,984. It is expected that the Central Bank's outlay of £988,705 will be recovered in full from the proceeds of the winding-up. It is not possible to say yet what the total repayment to the Exchequer will be. As I pointed out in my reply of 9 June, £142,864 has been paid over to date to the Exchequer.
As the liquidator has claimed £1 million for his services in the winding up of this company, is it not extraordinary that the Minister can reply to a question from me asking what his fees will be by simply stating that it was not his responsibility, particularly in view of the fact that the House is responsible for making payments to people who lost money in the Irish Trust Bank? Is the Minister not responsible for the money that is being paid out by the liquidator or is being claimed by him for his services?
(Clare): When a liquidator goes into any firm he is in sole charge of it. The purpose in going in is to liquidate the assets in order to try to redeem some of the debts which are outstanding, and whether it is 5p or 10p at the end of the day he must deduct all costs involved in the liquidation procedures.
The point I am making is that the liquidator is being paid £1 million for winding up a company with assets of £4 million and liabilities of £6½ million. It seems extroardinary that the House in the past decided to make up the losses of people who speculated on high interest rates and that now the Minister, in the course of a reply to a question tabled by me on 30 June, states that the matter of the cost of the liquidation process is for the liquidator only and that the Minister does not have any official responsibility to the Dáil in relation to that. If the Dáil is responsible for paying money out for losses by the Irish Trust Bank I cannot see why the Minister does not have responsibility to the Dáil for the £1 million which the liquidator is claiming for his work in relation to the disposal of the assets.
(Clare): The Minister does not have any responsibility for a liquidator who goes into any firm. A liquidator is put in by creditors and accepted by them. He is in charge of the operation from that time until he winds up the firm and satisfies as many creditors as he can to the extent he can. The figure of £1 million has been mentioned as being the liquidator's fees but that may cover many people because of the type of firm that was involved. I do not know, but in my view the investigation required by the liquidator involved checking all the activities of the firm and that could eat into a lot of that fee. I have the figures but I do not have any breakdown of them.
Since the question refers to steps taken to recoup in full all the shareholders of the Irish Trust Bank, can the Minister tell the House who has taken such steps and what are they?
(Clare): Steps with regard to what?
To recoup shareholders in full.
(Clare): This was done through the Exchequer and the Central Bank.
No, it was the depositors; but the question refers to the recoupment in full to the shareholders and I asked the Minister who has taken such steps and the steps that are being taken.
(Clare): I do not have that information.
Is it possible that any such steps have been taken?
(Clare): I have no record of any steps having been taken.
I suggest no such steps had been taken and, furthermore, I should like to ask if it is a fact that so far it is clear that in excess of £1 million is being recouped to the Exchequer and the Central Bank and that a considerably larger amount will be recouped in due course?
(Clare): It is expected, but the figure of the recoupment is not available yet. Already £142,000 has gone to the Exchequer and £988,000 to the Central Bank. There will be a further recoupment for the Exchequer but the extent of the figure is not available.
Is it also a fact that the decision to recoup depositors of the Irish Trust Bank was based primarily on the fact that there was a misrepresentation to the effect that for many of these depositors, especially those abroad, it had the backing of the Central Bank and that the credit of the State and the banking system of the State was at stake?
(Clare): It is an undeniable fact that the credit of the State was at stake when that decision was made. There were misrepresentations at that time.
Is it not also the case that it was a promise made during a general election campaign?
That does not make it wrong.
It does not make it right.
(Clare): It was still correct.
(Cavan-Monaghan): Is it correct to say that the promise was a paragraph in what has become known as the infamous manifesto of 1977 which was issued by Fianna Fáil?
(Clare): To say that it was a paragraph is correct, but there was ample information available with regard to this firm and what happened to it prior to the 1977 General Election. There was information about the misrepresentation to depositors and the effect it would have on the credibility of our banking system. That was available to our party prior to the 1977 General Election. We did not make an idle promise. It was made in the knowledge of the facts that were before us.
I put it to the Minister that he is wrong in suggesting that such knowledge was available. Even if it was available I fail to see how a person who had not access to such knowledge could make a promise to refund to depositors.
(Clare): It was on the basis of the information that was available and that information proved to be correct afterwards.