Directors’ silence on trackers

NOT one of the six Stateappointed public interest directors in the main banks raised the issue of the trackers scandal with the Department of Finance since it first emerged in 2009.

A Fianna Fáil TD has said he is ‘dumbfounded’ that none of the directors – including former tánaistí Dick Spring and Ray MacSharry – ever came forward to the Department with concerns.

John Lahart told the Irish Daily Mail: ‘I assumed that the public interest directors were appointed to reflect the interest of the public... but clearly this does not appear to have been the case. So you have to ask: what was it all about?’

NONE of the public interest directors put on the boards of the main banks came forward to the Government over the tracker mortgage scandal, the Irish Daily Mail can reveal.

Fianna Fáil has said it is ‘dumbfounded’ that none of the six directors ever came forward to the Department of Finance with concerns despite the fact that the scandal first emerged as far back as 2009.

Minister for Finance Paschal Donohoe has said he is now looking at a new system for the appointment of board directors on banks who would represent the public interest. More than 100 people have lost their homes and almost 30,000 have been affected to date as the cost of the controversy heads towards €1billion.

In correspondence to Fianna Fáil TD John Lahart, Mr Donohoe said that ‘over the years’ there have been ‘contacts between these directors and my department but I am not aware of any particular approaches in relation to the tracker mortgage issue’.

Mr Lahart told the Mail: ‘I assumed that the public interest directors were appointed to reflect the interest of the public – which was an overwhelmingly majority shareholder in the case of AIB – but clearly this does not appear to have been the case. So you have to ask: what was it all about?

‘Secondly, over the years, there have been contacts in relation to other issues, the Minister suggests. I am dumbfounded that none of the appointees approached the department concerning tracker mortgages.

‘The Minister needs to explain what difference or added value State appointees have made since they were put on these boards.’

Public interest directors were first appointed to the major banks following the financial crash.

There is only one left, Tom Considine in Bank of Ireland. Mr Considine earned €98,000 as director for the bank in 2015, the company’s annual accounts show.

There is also a ‘government appointee’ – Michael Somers – in AIB. His term on the bank is due to come to an end next month if it is not extended. The total remuneration paid to Mr Somers was €111,000 last year. Previous public interest directors include Dick Spring and Declan Collier for AIB, Joe Walsh for Bank of Ireland, and Margaret Hayes and Ray MacSharry for Permanent TSB.

Most retired between 2012 and 2014, and Mr Walsh and Ms Hayes both passed away in 2014.

Ray MacSharry told the Irish Daily Mail last week that during his time as public interest director, he was not aware of the fact that customers were being put on incorrect tracker mortgages.

He also said he believes that in his role he did what was appropriate to protect the interest of the taxpayers and to restore confidence in the banking sector.

Mr Collier did not respond to several requests for comment from the Irish Daily Mail made over the past two weeks.

Mr Spring was contacted but declined to give a response.

Bank of Ireland, which Tom Considine remains on the board of, said it has set out a ‘clear path for the resolution of the tracker mortgage issue’ for those impacted. It said the institution is ‘now working to ensure compensation payments are made as swiftly as possible to all impacted customers’.

In his response to Mr Lahart, Minister Donohoe said that company directors, regardless of whether they are appointed by the State or not, are required to abide by company law which dictates that they must act in the interests of the company itself. However, under legislation, there is a provision which allows those directors to ‘have regard for the interests of their appointer’. Mr Donohoe added: ‘My officials are working on a new procedure for any future appointments to bank boards, that will... reform the procedures for the appointment of bank directors by the State, with a view to increasing transparency’.

The Central Bank said last week it will hold individual members of banks’ boards and executives to account for the overcharging of tracker mortgage customers. Comment – Page 12 jennifer.bray@dailymail.ie