IBRC Legal Cases

Tuesday, 16 July 2013

Questions (247)

Pearse Doherty

Question:

247. Deputy Pearse Doherty asked the Minister for Finance the person who is responsible for assessing whether there is merit in the continuing legal corporate entity of Irish Bank Resolution Corporation suing the former auditors of Irish Nationwide Building Society and current special liquidators of IBRC, KPMG; if he will confirm that IBRC is suing Ernst and Young for its role in auditing Anglo Irish Bank; if he will further confirm that he is considering instructing the special liquidator to sue his own company as special liquidator for the role his company played in auditing Irish Nationwide Building society; if KPMG is not going to be sued by IBRC for the role it played as auditor of Irish Nationwide Building Society, the reason this is the case; and if he will make a statement on the matter. [34646/13]

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Written answers

Minister for Finance

In November 2012, the then Board of IBRC, after taking legal advice, decided to institute proceedings against Ernst and Young the former auditors of Anglo, for their role in the audit of the Anglo accounts. I am advised that these proceedings have been continued by the Special Liquidators following their appointment in February 2013. In respect of INBS, I am advised by the Special Liquidators that following the reconstitution of the Board of INBS in late 2009, the new Board conducted (over 2010-2011) a wide ranging investigation into historic lending practices and corporate governance issues in INBS. This included an investigation into the role played by the former auditors of INBS, KPMG. Following these investigations, the then Board of INBS, on foot of legal advice, made a decision not to institute proceedings against KPMG the former auditors of INBS. This decision was taken before the Special Liquidators were appointed in February 2013. It is understood that the decision was taken on the basis of legal advice to the effect that there was no legal liability on the part of the auditors. The Department of Finance was informed of the decision taken at the time.