Bank manager sacked over loans linked to Galway United

An AIB bank manager was sacked for “gross misconduct” after he facilitated loans that ultimately benefited Galway United FC, the Employment Appeals Tribunal has been told.

Seán McHugh, from Barna, Co Galway, has asked the tribunal to declare he was unfairly dismissed by AIB, after an internal inquiry and disciplinary process found he was guilty of gross misconduct in 2013.

Yesterday senior AIB bank official Brendan O’Brien said he had conducted the disciplinary hearing and had recommended Mr McHugh be summarily dismissed without notice and without pay in lieu.

He said Mr McHugh had had authority from the bank to facilitate loans for Galway United up to a limit of €75,000. However, Mr O’Brien said that at a time when the club needed money, Mr McHugh had facilitated a number of personal loans to individuals associated with Galway United, the repayment of which was linked to the club’s fortunes, in a move that effectively exceeded Mr McHugh’s limit.

Mr O’Brien told the tribunal Mr McHugh was an official of the club and had a “blatant conflict of interest” in relation to its dealings with AIB. AIB had also alleged there was a breach of discretion on the part of Mr McHugh in the handling of a number of customer accounts.

Conflict of interest

Mr O’Brien, who was the final decision-maker in the bank’s internal disciplinary process, said he found Mr McHugh “did not stand to, and did not make” any personal financial benefit from the transactions. But he said the absence of personal financial benefit to Mr McHugh did not mean there was no conflict of interest in the case.

He said Mr McHugh had created a doubt as to who would repay the loans. Mr O’Brien said he considered Mr McHugh’s lending practice “flawed” and could “expose the bank to considerable difficulties”.

However, senior counsel Ercus Stewart, for Mr McHugh, said the former bank manager had been a licensing contact for the Football Association of Ireland on the club’s behalf, and never had any day-to-day involvement with the running of the football club.

Mr McHugh said the personal loans were ultimately the responsibility of the person who borrowed them, and who would have to repay them, so there was no doubt involved.

Mr Stewart also took issue with the bank’s disciplinary process.

He said a group of well- known Galway businessmen had put up various levels of surety for the club and none had ever had to be called in.

He also said a number of people had sworn affidavits or given written reports to the bank’s disciplinary inquiry. But he said Mr O’Brien had not sought to contact these people.

Counsel for AIB Brian O’Moore objected to the naming of individuals associated with the case, pointing out that a coded naming system had been agreed. Mr Stewart and the tribunal chairman asked the media present to disregard the names. The case continues.