Commission of Investigation into the Irish Bank Resolution Corporation (IBRC)

The government has established a commission to investigate into matters in respect of the Irish Bank Resolution Corporation Limited (IBRC) and to make any reports required under the Commissions of Investigation Act 2004 in relation to its investigation.

The commission is required to investigate certain transactions, activities and management decisions at the IBRC which occurred between 21 January 2009 (the date of the nationalisation of IBRC), and 7 February 2013 (the date of the appointment of the special liquidators to IBRC).

Justice Brian Cregan of the High Court was appointed sole member of the commission on 9 July 2015.

The commission has a number of legal and administrative staff appointed to assist the sole member in his investigation.

The order establishing the commission provides that, “The commission shall, subject to section 6(6) of the Act, submit to the Taoiseach its final report in relation to its investigation no later than 31 December, 2015”.

Section 33(3) of the Commissions of Investigation Act 2004 requires the commission to submit an interim report to the specified minister with each request for an extension of the timeframe for the submission of its final report.

The commission submitted a request for an extension of time to the Taoiseach together with its first interim report on 13 November 2015. By letter dated 22 December 2015, the Taoiseach revised the timeframe for the submission of the commission’s final report until the end of April 2016.

The commission submitted a request for an extension of time to the Taoiseach together with its second interim report on 15 April 2016. By letter dated 26 April 2016, the Taoiseach revised the timeframe for the submission of the commission’s final report until the end of June 2016.

The commission submitted a request for an extension of time to the Taoiseach together with its third interim report on 27 June 2016. By letter dated 27 June 2016, the Taoiseach revised the timeframe for the submission of the commission’s final report until the end of October 2016.

In light of the commission’s interim reports, the Oireachtas passed the Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016 in July 2016. The Bill was signed by the President on 27 July 2016.

A copy of the Act is available.

The Minister for Justice signed the commencement order on 30 July, 2016, and the Commission of Investigation (Irish Bank Resolution Corporation) Act 2016 commenced in its entirety from 1 August 2016.

The government also made an order on 27 July 2016, amending the commission’s terms of reference.

A copy of that order is available.

The commission’s amended terms of reference provide that in the first module of its work, the commission shall investigate the transaction in relation to Siteserv Plc which has been identified as a matter of significant public concern in Dáil Éireann.

Following the amendment of the commission’s terms of reference the government published in Iris Oifigiúil the amended terms of reference and a statement of the estimated costs to be incurred by the commission in conducting its investigation and the timeframe for the submission of the commission’s final report on its first module.

A copy of the publication in Iris Oifigiúil is available.

The revised timeframe for the submission of the commission’s final report on its first module is by the end of 2017.

A copy of the order establishing the commission is available.

**The commission was established pursuant to the Commissions of Investigation Act 2004. A copy of the Act is available.

1.The commission shall investigate all transactions, activities and management decisions (‘transactions’), other than those relating solely to the acquisition of assets by the National Asset Management Agency, which occurred between 21 January 2009 (being the date of the nationalisation of IBRC) and 7 February 2013 (being the date of the appointment of the special liquidators to IBRC) (the 'relevant period'); and which either:

• resulted in a capital loss to IBRC of at least €10,000,000 during the relevant period, whether in consequence of a single transaction or of a series of transactions relating to the same borrower or entities controlled by the same borrower ('relevant write-offs'); or
• are specifically identified by the commission as giving rise or likely to give rise to potential public concern, in respect of the ultimate returns to the taxpayer
• in this regard, in the first module of its work, the commission shall investigate the transaction in relation to Siteserv PLC which has been identified as a matter of significant public concern in Dáil Éireann
• the commission shall also, in the first module of its work, review and report on the principles and policies within IBRC in respect of the setting of interest rates generally during the relevant period

2.The purposes for which each such transaction referred to above are to be investigated are the following (and accordingly the commission’s terms of reference extend to investigating):

• the processes, procedures and controls which were operated by IBRC in relation to those transactions to ascertain whether the appropriate internal IBRC governance procedures and controls were adhered to in respect of the transactions under review and whether the said procedures and controls were fit for purpose
• whether there is prima facie evidence of material deficiencies in the performance of their functions by those acting on behalf of IBRC, including the IBRC board, directors, management, the staff of the wealth management unit and agents, in respect of any transactions identified above
• whether it can be concluded from the information available within the IBRC and relevant evidence and witness testimony as appropriate that the transactions were not commercially sound in respect of the manner in which they were conducted, the decisions made and the outcomes achieved
• whether, in respect of any transaction under investigation, any unusual share trading occurred which would give rise to an inference that inside information was improperly provided to or used by any persons, and in the event that such an inference does arise whether any such information was actually improperly provided or used
• in relation to each transaction under investigation, whether the Minister for Finance or his department was kept informed where appropriate in respect of the transactions concerned, and whether he, or officials on his behalf, took appropriate steps in respect of the information provided to them

3.The report to be made by the commission in relation to the foregoing investigations shall:

• set out the scope and findings of the investigations in fulfilment of the purposes set out in 2. above
• respect obligations of confidentiality and commercial sensitivity where those are not incompatible with the public interest; and
• set out such recommendations as the commission sees fit

4.The commission shall report on any other matters of concern arising from its investigation of the above matters and make any further recommendations as the commission sees fit.

5.The commission shall exercise discretion in relation to the scope and intensity of the investigation as it considers necessary and appropriate, having regard to the general objectives of the investigation.

6.In these terms of reference:

• 'IBRC' means Irish Bank Resolution Corporation Limited;
• where a contractual obligation was agreed during the relevant period but not executed until after the relevant period then the contract and any resulting loss shall be regarded as having been made during the relevant period
• references to IBRC shall be construed as including references to Irish Nationwide Building Society and any subsidiary of Irish Nationwide Building Society from the date of the merger between Anglo Irish Bank and Irish Nationwide Building Society to 7 February, 2013; and as including references to Anglo Irish Bank, any subsidiary of Anglo Irish Bank and any subsidiary of IBRC for the relevant period
• for the avoidance of doubt, references to transactions, activities and management decisions shall be construed as including references to amendments made to the terms and conditions of loans

The commission has adopted rules and procedures for the receiving and recording of evidence and the receiving of submissions.

The commission has prepared the following notice for all persons who give evidence to the commission:

The commission made a Determination on 5 November 2015 in respect of an asserted duty of confidentiality and a claim of legal advice privilege over documents furnished to the commission by the joint special liquidators of IBRC.

The commission made a determination on 6 November 2015, in respect of an asserted duty of confidentiality and a claim of legal advice privilege over documents furnished to the commission by the Department of Finance.

The commission made a determination on 16 December 2015, in respect of an asserted duty of confidentiality over documents furnished to the commission by the Irish Stock Exchange.

IBRC Interim Reports of the Commission

Contact

The IBRC Commission is an independent statutory commission established under the Commissions of Investigation Act 2004 and any queries in relation to its work should be directed to the commission (see above).