On 25 July 2012, I along with officials from my Department, met with IBRC's Chairman and CEO to discuss a number of concerns raised by Department of Finance officials, which included concerns regarding this transaction which were raised to me following engagement with IBRC management.
During this meeting, I sought assurances around the concerns regarding the transaction. The Chairman provided me with strong assurances that the transaction, including those aspects of the transaction with which Department officials had concerns, had been thoroughly assessed by the IBRC Board and that the Board of IBRC were satisfied that the transaction was managed in the best manner possible to achieve the best result for the State. It should be noted that the IBRC Board had a fiduciary responsibility to the bank's stakeholders and so, in light of this legal responsibility, the Chairman and the Board would have considered and provided such assurances following serious and careful consideration. It is important to note that this transaction had completed at that stage and there was no legal possibility of reversing the transaction. In light of the level of assurances I received from the Chairman that this transaction had been properly considered by the IBRC Board, assurances which I accepted, an independent review into the transaction did not take place.
However, as announced last Thursday, due to the recent public concerns and questions raised regarding this transaction, I am directing the Special Liquidators of IBRC to review and report on all transactions, activities and management decisions which occurred between the date of nationalisation and the date that IBRC entered into liquidation that resulted in a capital loss to IBRC of at least €10 million. I have also directed the Special Liquidators to include in their review and report any transactions which give rise or would likely give rise to public concerns in respect of the ultimate returns to the taxpayer. The Special Liquidators are also obliged to ensure that any conflicts of interest which may arise in relation to this review are properly managed.
The review and report will evaluate whether there is any evidence of material deficiencies in the performance of their functions by those acting on behalf of IBRC, including the board, directors, management and agents of IBRC and whether it can be concluded that any of the transactions were not commercially sound.
Directing that a review be conducted by the Special liquidators has the advantage of enabling work on the review to commence very quickly. The review will be completed by the 31st of August and I intend to make this report available to relevant committees of the Oireachtas as requested.
