Ireland ministers launch inquiry into Anglo Irish Bank transactions

Denis O’Brien has come under scrutiny by a campaigner over his relationship with the Anglo Irish Bank. Photograph: Bloomberg via Getty Image

The Irish government is set to launch a formal investigation into a number of transactions at the bailed-out Anglo Irish bank.

Finance minister Michael Noonan proposed a formal commission of investigation at a cabinet meeting on Wednesday to address growing public concern about the bank’s dealings with certain business figures including Denis O’Brien, Ireland’s second-richest man.

The move comes less than a week after an independent member of parliament, Catherine Murphy, used parliamentary privilege to suggest that O’Brien had received preferential treatment from Anglo Irish Bank, which is being wound down under the rebranded name of the Irish Bank Resolution Corporation.

Murphy told the Dáil she understood O’Brien took out loans from IBRC worth €500m (£367m) with an interest rate of “around 1.25% when IBRC could, and arguably should, have been charging 7.5%”.

Murphy told Irish broadcaster RTÉ that she would welcome an independent inquiry. “It is important that we know what happened the people’s money and what happened every penny in this distressed bank that we poured more than €30bn into,” she said.

Earlier this week O’Brien accused Murphy of using stolen information and of repeatedly making “erroneous and untruthful statements” about his relationship with Anglo Irish Bank.

Murphy has been campaigning for months for an independent inquiry into IBRC and has expressed particular concern over O’Brien’s acquisition of construction company Siteserv from the bank.

Earlier this week O’Brien said he had “nothing to hide” about the transaction and that he would welcome an early review.

In March 2012, construction firm Siteserv was bought for €45m by Millington, a company controlled by O’Brien, after more than €105m of its debts to Anglo Irish Bank were written off.

In April this year Noonan announced a commission of inquiry into 40 transactions at the bank. Each transaction resulted in a capital loss of €10m or more to the taxpayer, including the sale of Siteserv.

Details of the Siteserv sale were brought to light by Murphy who has tabled questions and submitted freedom of information requests on the subject over the past six months.

However, the government review was criticised by opposition politicians and Murphy for not going far enough. Murphy told RTÉ she has “serious concerns” about the sale of Siteserv process and that she has information that trade buyers were excluded from sale process.

“IRBC instead of putting the company into receivership and selling it, they asked the company to sell itself. There was always going to be losses incurred because this was a distressed asset, but did the taxpayers get the best deal?” she said.

Anglo Irish Bank’s troubles helped trigger the country’s financial collapse in 2008 and the subsequent €67.5bn bailout by the International Monetary Fund, the EU and the European Central Bank in 2010.

 

“A credible review has to happen if people are going to believe the findings of it,” said Murphy.

The final terms of reference of the inquiry are due to be published shortly.