ICAI appoints Purcell to inquire into Anglo's director loans

John Purcell, the former comptroller and auditor general, has been appointed by the accountancy regulator to investigate the directors’ loans at Anglo Irish Bank and the performance of the bank’s auditors Ernst & Young.

Mr Purcell was appointed a special investigator by the Chartered Accountants Regulatory Board, a regulatory body set up by the Institute of Chartered Accountants in Ireland (ICAI), to investigate possible breaches of its rules of professional conduct in relation to Anglo Irish.

The ICAI said Mr Purcell would enquire into Mr FitzPatrick’s loans, which on occasion exceeded €100 million and were not disclosed to shareholders or the bank’s auditors Ernst & Young over a period of eight years.

Separately, the complaints committee is examining the involvement of ICAI members in relation to transactions between Anglo Irish and Irish Life and Permanent.

A spokesman for the ICAI declined to say whether other individuals had declined a request to act as a special investigator.

Should Mr Purcell’s report identify matters of concern the ICAI will convene a disciplinary tribunal. This can impose a range of sanctions, ranging from a reprimand to exclusion from the institute and a maximum fine of €30,000 per partner.

As special investigator Mr Purcell has the power to compel people to give evidence and to request access to documentary information.

The ICAI has been in contact with other statutory agencies involved in a series of investigations into issues arising from Anglo Irish, including the Office of the Director of Corporate Enforcement.

It is not yet clear whether Mr Purcell will have access to documentary evidence held at other statutory agencies, or the Department of Finance.

Minister for Finance Brian Lenihan and Tánaiste Mary Coughlan have been informed of the investigation.

“The role of the Special Investigator is to determine whether or not a prima facie case exists against a member or member firm rendering the individual member or member firm liable to disciplinary action”, the ICAI said in a statement this morning.

Mr Purcell is entitled to seek an extension of his terms of reference suggesting that he will have the capacity to follow a chain of evidence. To assist his inquiry he will have access to a range of accounting and legal supports.

There is no deadline for Mr Purcell to complete his investigation, with a spokesman for the ICAI suggesting it will require "a number of months".

The ICAI has 17,000 members and established the Chartered Accountants Regulatory Board to regulate the industry.