Written Answers Nos. 205-227
205. Deputy Pearse Doherty asked the Minister for Finance if any bank in which the State has shares avails of the use of the public auctions auctioneering service provided by a company (details supplied) which specialises in bank repossessed and bank receivership properties. [34253/13]
View answerI can inform the Deputy that the banks in which the State has shares have provided me with the following information in relation to whether they avail of public auctions auctioneering service provided by the company whose details are supplied.
Permanent TSB - I am informed by Permanent TSB that it does not currently avail of the use of public auctions auctioneering service provided by the company whose details are supplied.
AIB - AIB has informed me that it uses sales agents to market its repossessed properties, and in certain instances appoints receivers. In these instances, both the sales agent and the receiver has an obligation to seek the best price for the asset being disposed of. On occasion, the sales agent will recommend, or the receiver will decide on public auction as offering the best route to sale, including auctions by the company whose details are supplied. In relation to repossessed properties AIB may also on occasion use public auction as a method for sale.
Bank of Ireland - I am informed by Bank of Ireland that it engages various external service providers where it is deemed necessary to support the business of the group. As a commercially quoted public company Bank of Ireland respects the commercial rights of any such parties and as such avoids commenting on whether or not such arrangements exist with specific suppliers or on the specifics of any such arrangements where they exist.
206. Deputy Pearse Doherty asked the Minister for Finance if the National Asset Management Agency avails of the use of public auctions auctioneering services provided by a company (details supplied). [34254/13]
View answer208. Deputy Pearse Doherty asked the Minister for Finance the position on a connected personal relationship between any director of a company (details supplied) and any property developer whose development and investment properties are under the control of the National Asset Management Agency. [34257/13]
View answerI propose to take Questions Nos. 206 and 208 together.
As the Deputy is aware NAMA has acquired loans from the five participating institutions and is not the owner of properties. The Agency’s role is that of a secured lender. The Agency does not directly manage or sell properties securing its loans. In line with NAMA Board guidelines, NAMA requires that the sale of property assets by debtors and receivers is conducted by suitably qualified professional sales agents and that all such sales are openly marketed. I am advised by NAMA that the appropriate sales and marketing strategy for all asset disposals is determined by a range of factors, including asset class, location and the value of the property, and having regard to NAMA’s objectives as set out in section 10 of the NAMA Act. NAMA advises that, by reference to these considerations, its debtors and receivers draw from a large number of suitably qualified sales professionals in the sale of their properties.
As the Deputy is aware, NAMA is prohibited under Sections 99 and 202 of the NAMA Act from disclosing confidential information, including the identity of its debtors and details relating to their properties.
207. Deputy Pearse Doherty asked the Minister for Finance if Irish Bank Resolution Corporation avails of the use of public auctions auctioneering services provided by a company (details supplied). [34255/13]
View answerThe Special Liquidators have advised that in relation to connections where there are receivers appointed over assets, those receivers assess and recommend which method and agent to use for the sale of assets. The Special Liquidators have confirmed that there are instances where receivers, acting as agent for the borrower and-or borrowers, appoint the company mentioned to sell assets.
209. Deputy Pearse Doherty asked the Minister for Finance the necessary protections in place to ensure no National Asset Management Agency or State controlled bank property sales take place between connected or conflicted parties. [34258/13]
View answerI am advised by NAMA that where it approves the sale of any loan or approves the sale of any secured property by a debtor, it requires a confirmation that the purchaser is not connected to the debtor or other obligors. In line with this, NAMA Board guidelines require that sales agents prepare a final report and recommendation, which includes, inter alia, confirmation that the sales agent has reviewed the purchaser’s declaration relating to connected party sales and a statement disclosing any commercial relationship between the agent, debtor, purchaser or purchaser’s ultimate beneficial owners in the past five years and how any actual or perceived conflict of interest was managed during the sales process. I am further advised that AIB ensures that an appropriate market value is achieved for each asset sale. AIB uses various processes to achieve this on a case by case basis, as well as having a robust and externally validated property valuation policy and a Conflicts of Interest policy. Other controls range from external valuations, the use of auctions, the utilisation of an auctioneer unconnected to the borrower and solicitor confirmation that the transaction is at arm’s length. The exact method used depends very much on the circumstances of each case.
PTSB’s policy is that offers on all property sales are considered on a case by case basis and against two independent valuations.
210. Deputy Pearse Doherty asked the Minister for Finance the position on any Securities and Exchange Commission filing irregularities by Allied Irish Banks in the United States. [34259/13]
View answer211. Deputy Pearse Doherty asked the Minister for Finance the nature of any Securities and Exchange Commission filing irregularity by Allied Irish Banks in the United States. [34260/13]
View answer212. Deputy Pearse Doherty asked the Minister for Finance if there is any connection between the resignation in April of a person (details supplied) from the Irish Central Bank and any issue that arose regarding Securities and Exchange Commission filing irregularities by Allied Irish Banks in the United States. [34261/13]
View answerI propose to take Questions Nos. 210 to 212, inclusive, together.
I have been informed by AIB that there have been no SEC filing irregularities by AIB. I have also been informed by AIB that in light of the reforms introduced in the United States by the Sarbanes-Oxley Act, the SEC is actually “required” to periodically review the filings of all reporting companies, including AIB. This review process typically results in one or more comment letters from the SEC staff requesting information that helps them better understand the disclosures made and/or requiring or suggesting ways to improve disclosures in the future.
Correspondence between AIB and the SEC staff in regard to the filing of AIB’s Annual Report on Form 20-F for the year ended 2011 can be located on the SEC website (see link below). AIB have informed me that, although enhanced disclosures and further information were requested and agreed to by AIB, a review of correspondence that the SEC has published in relation to companies would highlight that the comments made in relation to AIB have not been materially more or less detailed or burdensome than those made by the staff in relation to most other European banks which have filed reports with the SEC in recent years. Furthermore, there has been no suggestion of any filing irregularities in the correspondence between AIB and the SEC. http://www.sec.gov/cgi-bin/browseedgar?action=getcompany&CIK=0000850364&owner=exclude&count=40&hidefilings=0.
I have also been informed by the Central Bank that there is no connection between the events outlined by the Deputy.
213. Deputy Pearse Doherty asked the Minister for Finance if he will confirm that in June 2013 AIB was unable to repay a €3.5 billion loan owed to the National Treasury Management Agency. [34262/13]
View answer214. Deputy Pearse Doherty asked the Minister for Finance if he will confirm any bond default by AIB and provide full details of same. [34263/13]
View answer215. Deputy Pearse Doherty asked the Minister for Finance if he has authorised the acceptance of AIB shares instead of cash repayments for bonds repayments due by AIB. [34264/13]
View answer216. Deputy Pearse Doherty asked the Minister for Finance if he will provide details of all instances where AIB bank shares have been accepted to meet bond payment dates. [34265/13]
View answer217. Deputy Pearse Doherty asked the Minister for Finance the value that was put on AIB shares taken in as payment in meeting any bond application. [34266/13]
View answerI propose to take Questions Nos. 213 to 217, inclusive, together.
I have been informed by AIB that with regard to the €3.5 billion 2009 Preference Shares held by the NPRFC, AIB has not paid any cash dividend to date (coupon rate of 8% amounting to €280 million). In settlement of this non-payment, AIB shares were issued to the NPRFC as follows: Year of Settlement No of Shares Issued: 2010 - 198,089,847; 2011 - 1,247,273,565; 2012 - 3,623,969,972; 2013 - 4,144,055,254.
The process for determining the number of shares paid was determined in line with the 2009 Preference Share Subscription Agreement.
2009 Preference Shares do not have a repayment date and were not due for repayment in 2013. The coupon on the 2009 Preference Shares was paid in shares in May of 2013 as per AIB’s stock exchange announcement, a link to which is provided as follows:http://www.aib.ie/servlet/ContentServer?pagename=AIB_Investor_Relations/AIB_Press_Releas/aib_d_press_releases&cid=1367253399001&c=AIB_Press_Releas&channel=IRHP&position=notfirst.
I have also been informed by AIB that with regards to the 2009 Preference Share Agreement AIB has never defaulted on the dividend payment owed on these preference shares. As per the terms of the agreement the dividend can be paid in either cash or shares.
The AIB Preference Shares were issued to the National Pensions Reserve Fund Commission (NPRFC) on 13 May 2009. Under the terms of the Preference Shares, a non-cumulative discretionary cash dividend at 8 per cent per annum may be paid on the anniversary of the issue of those shares if the Board of Directors of AIB decides to pay the dividend. It was necessary for the cash dividend to be discretionary in order to comply with the regulatory capital requirements in place at the time of the issue of the Preference Shares. However, if the discretionary cash dividend is not paid, AIB must issue bonus AIB ordinary shares to the NPRFC equal in value to the cash dividend. As the bonus AIB ordinary shares are issued to the NPRFC under the terms of the 2009 Preference Shares, no additional direction or authorisation from the Minister for Finance is required for the issue of such shares.
The value of the AIB shares held by the NPRF at 31 March 2013 and pending completion of an independent valuation review, comprised:- Ordinary shares, provisionally valued at €0.0079 per share;- Preference shares, provisionally valued at end 2012 valuations of 66% of par.
The final year end valuation will be reflected in the Fund’s audited financial statements for 2012 which will be published in July 2013.
218. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the percentage of shares now held by the State in AIB. [34267/13]
View answerThe Annual Report and Financial Statements 2011 of the National Pensions Reserve Fund Commission showed that the Fund’s ownership of Allied Irish Bank was 99.8% at 31 December 2011. In May 2012 the National Pensions Reserve Fund (NPRF) received a dividend of ordinary shares in lieu of a cash dividend on its preference shares. The NPRF has advised that that due to the dilution effect, the ownership was very marginally increased as shown in the following table:
|
- |
NPRF Holdings |
Total Shares |
% Ownership |
|
Before Dividend |
516,237,363,722 |
517,117,096,249 |
99.830% |
|
Dividend |
4,144,055,254 |
4,144,055,254 |
- |
|
After Dividend |
520,381,418,976 |
521,261,151,503 |
99.831% |
219. Deputy Pearse Doherty asked the Minister for Finance if AIB is in full compliance with its banking licence requirements with the Central Bank and European Central Bank. [34268/13]
View answerCompliance with the banking licence is a matter for the Central Bank and I have been informed by the Central Bank that Allied Irish Banks plc holds a banking licence under Section 9 of the Central Bank Act, 1971. This licence allows the bank to conduct banking business. As defined in the Act, “banking business” means business which consists of—(a) the business of accepting deposits payable on demand or on notice or at a fixed or determinable future date, but excluding deposits with a trader from persons employed by him in his trading business or from his customers in the normal course of his trading business and deposits or instalments in respect of the letting or selling of goods under a hire-purchase agreement or a credit-sale agreement, or (b) the business aforesaid and any other business normally carried on by a bank.
220. Deputy Pearse Doherty asked the Minister for Finance if he will list the consultant fees accumulated by AIB in 2011 and 2012; if the bulk of these fees were paid to a company (details supplied); and if he is satisfied with the tendering process which was run by the bank. [34298/13]
View answerI have been informed by AIB that in line with normal practice and for reasons of commercial sensitivity, the bank does not publicly disclose the details of contracts with individual external service providers. AIB utilises the expertise of a number of different third party firms on a case by case basis, subject to an evaluation of the bank’s requirements, costs and the relevant external parties. AIB is focused on a significant cost reduction programme and, as part of this process, has policies and procedures in place in respect of the appointment of external third parties. All external service provider contracts entered into by the bank comply with AIB’s policy in relation to engaging external service providers.
221. Deputy Pearse Doherty asked the Minister for Finance further to the statement made by former public interest director at Anglo Irish Bank, Mr. Alan Dukes, that decisions about evidence to be given to investigations into the banks were made at board meetings and that minutes from those meetings were made available to his Department and the Central Bank, if he will state, categorically, that those minutes did not contain references to recorded telephone conversations of bank employees; if he will also confirm whether members of his Department read the minutes of the bank's meetings; and if he is satisfied to stand by his statement that his Department was unaware of the tapes made at Anglo Irish Bank. [34299/13]
View answer225. Deputy Pearse Doherty asked the Minister for Finance if the minutes of all board meetings held at Anglo Irish Bank following its nationalisation, and subsequently the minutes of Irish Bank Resolution Corporation board meetings are a matter of public record; if these minutes will be laid before the Houses of the Oireachtas; or if these minutes have been seized as part of the ongoing criminal investigation into events at Anglo Irish Bank. [34303/13]
View answer272. Deputy Pearse Doherty asked the Minister for Finance the papers relating to and furnished to directors at Anglo Irish Bank board meetings provided for the Department of Finance or the Central Bank following the bank guarantee in September 2008; if these papers referenced the existence or content of recordings made at Anglo Irish Bank on employees' telephone lines; if the papers make reference to the Garda requesting these tapes; and the dates the papers were received. [34943/13]
View answerI propose to take Questions Nos. 221, 225 and 272 together.
As the Deputy will appreciate a vast quantity of information in relation to IBRC was provided to and held by the Department of Finance on a monthly basis as part of its normal engagement with the bank; these included monthly management reports, financial and other presentations, internal and external auditor reports, external adviser reports and monthly Board papers which frequently extended to hundreds of pages. In relation to the Board packs, specifically these were provided to the Department on a monthly basis since August 2011. Officials from the Department of Finance monitored this information extensively and relied on it as part of their on-going engagement with the bank.
The Board papers would have contained many references to the efforts being made by the bank in dealing with the legacy issues relating to Anglo Irish Bank and INBS and also the ongoing compliance with all investigations into the bank. These would have included the various documentation and other requests received by the ODCE, GBFI, CARB etc. in the context of their investigations. As indicated in my response to Parliamentary Question No. 220 on 2 July last, IBRC provided the Garda Bureau of Fraud Investigation audio recordings in respect of 18 employees of the bank whose lines were recorded in 2010.
Neither I nor my Department have any role in the ongoing Garda or other regulatory investigations into Anglo Irish Bank or any other Irish Bank. It would be completely inappropriate for the Department of Finance to act outside its legal powers and interfere with any investigation that could compromise potential future criminal or civil investigations by the bodies responsible under statute.
As the Deputy will be aware all debts owing to IBRC remain due and enforceable following the liquidation of the bank; in that context I am advised that the minutes of the board meetings of IBRC are not a matter of public record as they contain a large amount of material which could be considered legally privileged or commercially sensitive, even following the liquidation of the bank.
However this documentation will obviously be available to any banking inquiry which may be set in the future. The Government is determined to ensure the public is informed about what happened in Irish Banks and has published the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Bill which, once enacted, will provide the legal framework for such a banking inquiry to be held within the current constitutional parameters.
222. Deputy Pearse Doherty asked the Minister for Finance if he is satisfied with the admission from the former public interest director at Anglo Irish Bank, Mr. Alan Dukes, that he was aware of the existence of the Anglo tapes, that he had been briefed on the content of the tapes and that he did not see fit to inform the ongoing investigations into Anglo, the Central Bank or the Government of the tapes. [34300/13]
View answer224. Deputy Pearse Doherty asked the Minister for Finance if he is satisfied that after admitting he was aware of the content of the Anglo tapes, the former public interest director at Anglo Irish Bank, Mr. Alan Dukes, did not see fit to suspend and investigate the employees recorded on the tapes following his appointment as chair of Irish Bank Resolution Corporation in 2010. [34302/13]
View answer226. Deputy Pearse Doherty asked the Minister for Finance his views that, in his role as public interest director at Anglo Irish Bank, Mr. Alan Dukes should have informed the Nyberg banking commission of the existence of recorded telephone conversations in Anglo Irish Bank and made those tapes available to it. [34327/13]
View answerI propose to take Questions Nos. 222, 224 and 226 together.
I am satisfied that Mr Dukes in his position as public interest director from December 2008 and later as Chairman of IBRC has co-operated fully and openly with all ongoing investigations into the bank. As the Deputy is aware there are a number of investigations progressing into Anglo Irish Bank which the Board and senior management of Anglo/IBRC have fully co-operated with to date. During his time with the bank they have provided a vast amount of information to the Chartered Accountants Regulatory Body (CARB), Garda Bureau of Fraud Investigation (GBFI), Office of Director of Corporate Enforcement (ODCE), the then Financial Regulator (FR) and the Nyberg Banking Commission to assist with each of those investigations this included the provision of certain recordings to the GBFI.
The role of a public interest director is not to interfere or direct the investigations that are being conducted by the appropriate authorities into Anglo Irish Bank or any other Irish Bank. It would be completely inappropriate for a public interest director to act outside of his or her legal powers and interfere with any investigation that could compromise potential future criminal or civil investigations by the bodies responsible under statute. Mr Dukes in his roles with Anglo-IBRC has facilitated the investigations to the maximum possible extent and that all material required by the authorities was supplied. It was important during the course of the investigations that staff rights were protected and that due process was followed whilst ensuring the authorities got the information they required.
223. Deputy Pearse Doherty asked the Minister for Finance if he is now aware of which telephone lines were recorded in Anglo Irish Bank; and if he knows, if he will list who the other persons recorded on the tapes are, outside of the three we have heard to date. [34301/13]
View answer274. Deputy Pearse Doherty asked the Minister for Finance when his Department first learned of the existence of, as distinct from the content of, the Anglo Irish tapes. [34945/13]
View answerI propose to take Questions Nos. 223 and 274 together.
All Banks record phone calls for a variety of reasons in the normal course of business and this was known to the Department. I can confirm that the recordings of 18 staff were provided to the Garda Bureau of Fraud Investigations in 2010. Due to ongoing litigation it would not be appropriate for me to provide a list of the persons recorded as it could prejudice those proceedings.
227. Deputy Pearse Doherty asked the Minister for Finance if he will set out the responsibilities he believes the role of public interest director in a State owned or partially State owned bank entails. [34328/13]
View answerAs I have stated many times before, the primary duty and responsibility of the public interest directors as well as all the other directors is to ensure that the institution on whose board they serve is run properly and appropriately. They serve on many Bank committees as well as the Boards themselves and their breath of experience brings a deeper and wider knowledge base and understanding to all the Banks which they serve. Our stated policy is get the Banks fully functioning and run on a commercial, cost effective and independent basis to ensure their value as an asset to the State. The public interest directors have an essential role to play in assisting our aims.
Of course, the legal position is that any director appointed to the board of the covered institutions whether under the Credit Institutions (Financial Support) Scheme 2008 or otherwise is subject to the requirements of company law in relation to the discharge of their responsibilities as a company director. As such, the director is legally bound to act in what he or she believes are the interests of the separate legal entity that is the institution itself. These are the directors so-called fiduciary responsibilities. To address the scope for actual and perceived conflicts between the fiduciary duties of the directors of financial institutions under company law and the wider public interest in circumstances where those institutions have received huge financial support from the State, legal clarity, not just to the role of the public interest director but to that of the entire boards of those institutions, was provided under Section 48 of the Credit Institutions (Stabilisation) Act 2010. It provides that the overriding duty of directors of the covered institutions relates to the public interest as set out in the Act. This recognises the fundamental role that all public interest directors serve.
