Wednesday, 19 June 2019

Questions (27)

Catherine Murphy


27. Deputy Catherine Murphy asked the Minister for Finance his plans to establish a committee of inspection in respect of IBRC; his plans to include on that committee independent non-departmental officials and external persons with the appropriate expertise; if he envisages a role for the Comptroller and Auditor General in this process; and if he will make a statement on the matter. [25813/19]

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Oral answers (6 contributions) (Question to Finance)

This question relates to the Irish Bank Resolution Corporation, IBRC, the combination of Anglo Irish Bank and Irish Nationwide Building Society, and how the special liquidation is supervised. It is supervised in the Department of Finance and I am seeking the Minister's views on establishing a committee of inspection into IBRC to increase transparency and accountability.

It is important for me to set out the role of a committee of inspection in an ordinary liquidation and the legislative and factual context of the special liquidation of IBRC. The Irish Bank Resolution Corporation Act of 2013 specifically disapplied a number of provisions in the Companies Act 1963 insofar as they applied to the liquidation of IBRC, including those relating to committees of inspection. In the liquidation of IBRC, the Act conferred supervision of the liquidation to the Minister for Finance and provided the Minister with special powers in overseeing the liquidation of IBRC. In an ordinary liquidation, a committee of inspection grants the creditors of the company oversight of the liquidation as well as a say in the decisions of a liquidator regarding the liquidation. Under the Companies Act, there is no role for non-creditors of a company to participate in a committee of inspection. In the case of IBRC, at the point of liquidation the make-up of a committee of inspection would likely have included representatives of the National Treasury Management Agency, NTMA, the National Asset Management Agency, NAMA, and other unsecured creditors of the bank, potentially including employees and subordinated bondholders. It is important to note that the special liquidators have recently announced that all outstanding subordinated unsecured creditor claims and unsecured creditor interest claims will be paid in full. As such, the expectation is that the only remaining creditor in the liquidation of IBRC will be the State, as the sole shareholder of the entity. Furthermore, the option remains open to any creditor of IBRC to apply to the High Court to determine any question arising in the winding up of IBRC, including the manner in which liquidations have occurred. I have been advised that no such determinations have been made.

I remember the night in February 2013, as will the Minister, when we were presented with a Bill at 10 o'clock or 11 o'clock at night. We hardly had time to read it and it passed all Stages by 5 o'clock the following morning. Clearly, this issue and other issues were not afforded the kind of scrutiny they would otherwise have been given because the legislation had to be enacted before the markets opened the following morning.

This did not receive the attention it needed to receive. Given that it is the State - the people - that is carrying this, we are really talking about the limits on public services and about extra taxation. The Minister probably knows this better than anybody else. People have every right to see how assets are disposed of. I find it unsatisfactory that there is not more transparency associated with the disposal of the assets and that the supervision is within the Department. The Minister is clearly saying he is not minded to change or establish a committee of inspection.

The Deputy is correct on that. I take her point that the legislation was passed at great speed. I remember the night very well and the circumstances. I do not have any plans to establish a committee of inspection in regard to the liquidation. I am satisfied it has happened in an entirely appropriate way, in accordance with the law and the legislation passed. As the Deputy is aware, a report is issued to provide the House with an update on the liquidation status of IBRC. The special liquidators have now published their sixth report on this to try to provide as much transparency as possible on what is a very significant issue. If the Deputy outlines the areas where she believes there is no transparency, it might give me an opportunity to respond on them.

In many ways, it is a matter of how it is interrogated. For example, there is a fundamental difference between this and the handling of NAMA, where the Comptroller and Auditor General has a role. There are staff from the Office of the Comptroller and Auditor General embedded in NAMA. There is a degree of transparency regarding asset disposal owing to interrogation by a committee of the Dáil. The process is not as satisfactory in regard to IBRC and the detail required. This is not to say the assets are not disposed of entirely appropriately and are resulting in the best possible yield but the transparency is missing. This represents an error in how the legislation was framed.

Where I differ from the Deputy is in my belief that the progress reports issued by the liquidator have tried to get the balance right in terms of providing transparency and information to the House and also in terms of completing a liquidation that was and is immensely important to the financial progress of our State.

As the Deputy knows, the various progress reports published have, at different times, provided an update on the liquidation and provided information on the sale of loans, the cashflow associated with the sales of loans, the fees incurred as part of the liquidation, and the kind of work that still remains to be done. As the liquidation stands, there are approximately 93 legal cases outstanding. The reports published have provided an update to the House on work under way. Through the Committee of Public Accounts, for example, officials in my Department have been subjected to scrutiny over the status of the liquidation.