Michael Noonan agrees to change IBRC inquiry terms

Minister for Finance Michael Noonan will agree to changes to the terms of reference for the commission of investigation into the Irish Bank Resolution Corporation (IBRC) when he meets senior Opposition representatives tonight.

However, senior Government figures have said Mr Noonan is unwilling to budge on some key Opposition demands, including bringing forward the deadline to October; to investigate write- downs of less than the proposed €10 million threshold; and to examine the role played by the Department of Finance.

Mr Noonan will separately meet Fianna Fáil leader Micheál Martin, Sinn Féin deputy leader Mary Lou McDonald, and Independent TD Catherine Murphy this evening. The terms of reference will be finalised tomorrow before a two-day debate in the Dáil.

It is likely the commission will be chaired by retired High Court judge Iarfhlaith O'Neill.

The inquiry will examine the sale of Siteserv by IBRC to a company controlled by businessman Denis O'Brien, which involved a write-down of €119 million, as well as other similar large disposals where substantial write-downs were involved.

Investigate allegations

The commission will also investigate allegations raised by

Ms Murphy

in the Dáil that preferential interest rates were given to some large borrowers, including Mr O’Brien.

A Government spokesman said last night that Mr Noonan considered some of the Opposition suggestions to be reasonable and is open to incorporating them before finalising the terms of reference. This approach was portrayed by the Coalition as an unprecedented effort to make the inquiry non-partisan and consensual. Specifically, the Minister will likely accede to a Fianna Fáil request to look into IBRC’s wealth management unit.

Conflict of interest

The unit had a separate legal entity to IBRC, and Fianna Fáil has suggested a report was prepared by William Fry Solicitors on a possible conflict of interest between the two entities.

While some concessions are likely, in other areas there remain large gaps between the draft terms and the terms sought by the Opposition.

A senior Government source said Mr Noonan would need to hear convincing arguments to justify lowering the write-down threshold from €10 to €5 million (as Fianna Fáil has requested) or to €1 million (as Sinn Féin has sought).

The source said a raft of demands to expand the inquiry had been made by the Opposition while wanting the report completed two months earlier, in October.

“They are asking for an early report and then they add a load of bells and whistles,” the official said. “That is an impossible demand.

“Mandating the commission to look at every transaction of €1 million is burdensome and time-consuming. The judge has discretion to look at smaller sums than €10 million if there is a need, and that should address those concerns.”

The source added: “I think it’s fair to say we are open to an element of the Department of Finance being looked at, but there are limits,”

Former IBRC chairman Alan Dukes said the lower the threshold, the more cases would be involved and the longer the inquiry would take.

He also suggested that if the commission delved deeply into the detail of IBRC, then a benchmarking exercise against other banks would have to come into play.