Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Investor Compensation Company Limited

Dáil Éireann Debate, Tuesday - 28 January 2014

Tuesday, 28 January 2014

Ceisteanna (202)

Eoghan Murphy

Ceist:

202. Deputy Eoghan Murphy asked the Minister for Finance the position regarding investigations into the directors of Custom House Capital; the likelihood of investors in CHC receiving any return or compensation for their investments; if he will provide details as to the Destiny Property 118 Fund and whether it made any investments; if it invested in the purchase of a building in Glasgow; who now owns this building; the role the Central Bank has at present in denying the release of information to those who invested with CHC; the reason the appointed receivers are not allowed to release information to claimants in this matter; the status of the investor compensation company; and the reason investors who made appropriate claims have not heard from them to date. [3937/14]

Amharc ar fhreagra

Freagraí scríofa

The Deputy will be aware that the Central Bank maintains a page on its website where it provides up to date information on Custom House Capital ("CHC"). This can be accessed at https://www.centralbank.ie/press-area/press-releases/Pages/UpdateonCustomHouseCapital.aspx.

The Deputy will also be aware that the  Investor Compensation Company Limited (ICCL), established under the 1998 Investor Compensation Act, also maintains a page on its website with relevant updates for investors in CHC who may be eligible to claim compensation from the investor compensation fund. This can be accessed at  http://www.investorcompensation.ie/current_cases_004.php. This page is reviewed and updated on a weekly basis and all claimants have been advised that they should consult the ICCL's website for relevant updates.  

In relation to the compensation which investors in Custom House Capital may receive, I would like the Deputy to note the following:

- As of 23rd January, 2014, the ICCL had received certified statements from the Administrator in respect of 428 claims and has paid compensation to those claimants amounting to €6,624,280.  All compensation payments were made by the ICCL within 2 weeks of having received the relevant certified statement.

- The ICCL has received 1,969 claims from former clients of CHC.  All claimants received an acknowledgement from the ICCL following receipt of their claim.  All claimants would subsequently have received a confirmation that their claim had been passed to the Administrator, Kieran Wallace, who would verify and certify their claim in due course.  The legislation provides that it is the Administrator, not the ICCL, who checks the validity of each claim and determines the level of compensatable loss to be paid.  I understand the Administrator had indicated that this will be a protracted process given the complexity of the reconciliation process.

In relation to the release of information regarding the case and the respective roles of the Central Bank and the Liquidator, I would like the Deputy to note the following:

- Upon presentation of the Final Inspectors Report to the High Court Justice Hogan ordered that CHC be wound up immediately.  Copies of the Final Report have been provided to the Minister for Justice and Equality, to the Director of Public Prosecutions, to the Director of Corporate Enforcement, to the Revenue Commissioners and to the Garda Commissioner.  At the time the High Court outlined that the only solution in the CHC case was an immediate court sanctioned liquidation where the Liquidator would take steps to conserve the assets of the company and to ensure that payments out were made to creditors in a manner authorised by law.  The High Court reviewed the position of Mr Kieran Wallace for this role and confirmed his appointment as Liquidator with immediate effect.

- The Central Bank s investigation into Custom House Capital Ltd (in Liquidation) and persons concerned in its management has been on-going since the publication of the Final Report to the High Court by Court Appointed Inspectors dated 19 October 2011.  Following consultation with An Garda Síochána, the Central Bank's investigation has been deferred pending completion of investigations by An Garda Síochána.

- As identified in the Final Inspectors Report, there was large scale misuse of client holdings and systematic deception by CHC that caused uncertainty surrounding the legitimate ownership of all client holdings.  As a result, this is not a routine liquidation and, in the interests of all clients, the legitimate ownership of holdings must be established before any payment or return of holdings can be made to any client.  The situation is further complicated by the fact that in many cases these holdings form part of various pension arrangements (e.g. ARFs, PRSAs) which are subject to additional legislation.  Directions imposed on CHC by the Central Bank are in place to ensure that misleading information is not issued to clients about individual client holdings pending completion of reconciliation work by the Official Liquidator.

- As also set out in the Final Report of the High Court Inspectors, the sub-management arrangements entered into between CHC and Horwath Bastow Charleton Wealth Management Ltd. sought to protect against a diminution in the value of remaining client holdings and provide a mechanism for (a) maximising a recovery of funds for clients and (b) providing transparency and ensuring fairness in the return of assets to clients.  The Liquidator remains responsible for all reconciliation work carried out in respect of CHC related client holdings.

- In light of the above I cannot comment on details pertaining to any particular fund held by CHC, whether relating to any investments made by the fund, assets held by the fund, etc.

- The process of establishing legitimate ownership of all investments involves a significant and lengthy reconciliation of client holdings that takes time to fully complete.  As mentioned above, Mr. Kieran Wallace of KPMG was appointed Official Liquidator by and is accountable to the Court for the conduct and completion of the liquidation of CHC.

Barr
Roinn