Executives' accounts not linked to AIBIM

The five AIB executives who had "tax issues" unrelated to the Faldor investment account had offshore bank accounts that were not linked to AIB Investment Managers Ltd (AIBIM), it has emerged.

The five, comprising two former and three current executives in the bank, were discovered to have the offshore bank accounts after a bank-wide inquiry was initiated following the discovery of the investment account in AIBIM held in the name of the British Virgin Islands company Faldor.

The beneficiaries of the Faldor investment account included the former chief executive of the bank, Mr Gerry Scanlon.

The five executives who were subsequently discovered to have unrelated offshore bank accounts included another former chief executive of the bank, Mr Tom Mulcahy. Mr Mulcahy resigned as chairman of Aer Lingus following the disclosure that he had one of the bank accounts in relation to which "tax issues" existed.

It is understood that Mr Mulcahy told the Department of Transport that he opened an account in the UK when he was working there for AIB, and did not close it when he returned to work in the Republic.

When contacted yesterday by The Irish Times, Mr Mulcahy said he would not be discussing the matter.

The names of the other executives who had offshore bank accounts have not yet emerged. The bank would not comment yesterday when asked if they were still at their desks.

The chairman of the Oireachtas Joint Committee on Finance and Public Services, Mr Seán Fleming TD, is expected to write to the chairman of AIB, Mr Dermot Gleeson SC, again next week.

This week Mr Gleeson responded to a letter from Mr Fleming and agreed with the AIB chief executive, Mr Michael Buckley, that bank executives should not appear before the committee until all the facts surrounding the controversies at the bank are ascertained.

Mr Fleming is expected to point out to Mr Gleeson that the governor of the Central Bank, Mr John Hurley, has said he sees no impediment to representatives of the bank appearing before the committee, as long it did not interfere with the investigations that were under way.

Mr Fleming is also expected to refer to a passage in Mr Gleeson's letter that some members of the committee believe indicates an admission there is something wrong with the culture within AIB. It reads: "One of the key objectives which Michael Buckley has been working on since he became chief executive in mid-2001 has been to make whatever changes are needed in the culture and organisation practices of AIB."

The bank is currently the subject of a number of investigations. The Irish Financial Services Regulatory Authority is hoping to publish two reports concerning AIB by the end of July. One will be concerned with overcharging on foreign exchange transactions while the other will be concerned with the Faldor account, certain practices which existed within AIBIM in the period up to 1997, and the offshore bank accounts held by the five executives.

The Office of the Director of Corporate Enforcement is conducting an investigation into AIBIM and has sought certain documents from the company.

The Revenue Commissioners is also conducting an inquiry, which is being headed by its investigations and prosecutions division and includes members of the large-cases unit. A Revenue scheme, whereby the owners of offshore accounts could come forward to make voluntary disclosures, closed some weeks ago.