Vol. 377 No. 1
asked the Minister for Industry and Commerce the present position, developments and prospects in the matter of the Insurance Corporation of Ireland and Allied Irish Banks, indicating the present involvement of the Cental Bank; and if he will make a statement on the matter.
61.
asked the Minister for Industry and Commerce the total estimated cost of the collapse of the Insurance Corporation of Ireland at the latest date for which figures are available; the total estimated profits made last year by ICI; if his permission or that of the Government has been sought to sell off ICI; and if he will make a statement on the matter.
I propose to take Questions Nos. 19 and 61 together.
The position in relation to the financial arrangements involving Allied Irish Banks and the Central Bank is set out in the statement made by the Central Bank on 4 October 1985. There has been no change in these arrangements nor is any foreseen. The latest audited accounts of the company published by the administrator showed a net balance sheet deficiency of £120 million at 31 December 1986 after the £100 million advance from the banking sector is taken into account.
The administrator intends to publish the 1987 audited accounts of the company in March 1988. The accounts are likely to confirm the continuing profitability of its ongoing business.
While permission has not been sought from either myself or the Government for the sale of ICI, the question of disposal is, of course, being kept under continuous review.
Can the Minister indicate to the House what exactly is the position in regard to the £18 million or so which was, I understand, put up by the Central Bank for the benefit of Allied Irish Banks arising out of this matter? Is there any prospect of that money being refunded or what arrangements are in place to have the taxpayers' funds recouped from the AIB?
Let me remind the Deputy that of the £100 million advanced, £70 million was advanced by Allied Irish Banks with the remaining £30 million coming from Central Bank funds. That was the arrangement entered into by the previous Government and it is one we are standing over.
I accept that they may be standing over it but what is the position regarding the money in the Central Bank? Is this gone forever or does this agreement hold out any prospect of recoupment to the Central Bank of the money owed to it? What exactly is the position in the light of the improved trading position of ICI?
Let me remind the Deputy that the arrangements involve the advancement of £100 million for a period of 15 years. This money was lent to the Minister for Finance for onlending to the Insurance Corporation fund which, as the Deputy is aware, subsequently went to the ICI administrator under the supervision of the High Court. Therefore, I do not foresee any great change in the situation. The present position is that a 15 year loan has been advanced. This loan was negotiated by the previous Government, it is in place and it is holding its course.
Will it be repaid with interest?
This is now a State company and I understand it is making a profit. Is a return coming back to the State from the new profitability of this company and this is apart from the loan which, as the Minister of State has said, was advanced?
Of course we are pleased to see the company making a profit on its ongoing business and those profits in so far as they are available will accumulate on the balance sheet. As I said in my reply, the balance sheet still shows a deficiency. Therefore, those funds will obviously improve the quality of the balance sheet and, as the Deputy has rightly said, the shareholder is the State. Therefore, at the end of the day the State is responsible and owns those funds.
Finally——
Perhaps, a final supplementary, Deputy Mac Giolla.
In regard to the question on the sale of the company, has the Minister received a request from the company to privatise the company?
Neither the Government for I have received any such request.
