A senior executive with AIB who believes he has done nothing wrong and is being "scapegoated" by the bank for its overcharging of customers yesterday secured an interim High Court order restraining his dismissal as general manager of the bank's strategic development unit.
Séamus Sheerin says he was told this week that he should be dismissed. In an affidavit to the High Court, he said he believed he would suffer irreparable harm because of the bank's decision unless the courts intervened to protect him. He said the banking community was an extremely small one and he operated at a management level where very few roles were available.
Mr Justice Iarfhlaith O'Neill was told Mr Sheerin had been invited only late last year to apply for the position of chief executive with AIB.
Mr Sheerin said AIB had indicated to him on Thursday that he had a right of appeal against its decision to dismiss him.
In his affidavit, Mr Sheerin said none of the matters in which he had been involved was of such a nature as to merit the sanction now being visited on him.
"The very finding of wrongdoing against me is sufficient to give rise to a damage to my reputation in the banking community which would result in the most irreparable harm imaginable to somebody in my position," Mr Sheerin said.
On the application of Roddy Horan SC, with Ben Ó Floinn BL, for Mr Sheerin, the judge granted a temporary injunction returnable to Monday restraining Mr Sheerin's dismissal. The injunction application was made on an ex parte basis (in the absence of the other side).
Mr Horan said his client had done absolutely no wrong and was a loyal employee. He had been "scapegoated" and did not believe he had been guilty of any wrongdoing.
In his affidavit, Mr Sheerin said AIB had directed that Mr Aidan Mc Keon, a director of AIB (now managing director AIB Group UK), should inquire into the alleged wrongdoing charged against Mr Sheerin and it was Mr McKeon who decided that Mr Sheerin should be dismissed. Mr Sheerin said this occurred in circumstances where Mr McKeon himself was the subject of unresolved issues regarding foreign exchange transactions.
Mr Sheerin said he was appointed to his present position in April 2002. At that stage, the foreign exchange issue had existed for seven years. He first became aware of the foreign exchange issue in September 2002 and he thereafter endeavoured to manage it.
On September 26th, 2002, he informed a superior that the issue had been brought to his attention and that the problem appeared to have arisen due to an apparent error in notifying the correct rate and that the matter was being inquired into.
Mr Sheerin said he had inherited a problem which had arisen as far back as 1995. He was charged with managing the problem but he did so in tandem with ensuring that others interested in the matter were informed of the problem. He informed his superiors of the approach that he thought was appropriate and at no stage did anyone suggest an alternative or criticise his approach.
As far as he was aware the approach he adopted was approved by his superiors and was entirely consistent with the prior approach adopted by the bank when dealing with the Director of Consumer Affairs. The problem with the notified rate was well known within various departments and various levels at the bank.
For example, the only area of revenue generation which was not increased since 1996 was the level of charges on foreign exchange transactions. That was because others in senior management (even before he became aware of a problem with the notified rate), long before he was appointed to his position, knew there was a problem, he said.
Mr Sheerin said that, in the week commencing May 10th, 2004, he was forced to take leave from the bank. By the following week, the media were reporting that a senior bank official had been suspended as a consequences of the problem with the notified rate. Journalists were ringing and calling to his house seeking comment.
In short, "the complete untruth" in the media about the alleged suspension had been identified with him. His family and he had endured the most appalling treatment and harassment from the media. He had been publicly identified by the media as the senior member of management who was alleged to have been suspended.
Mr Sheerin said he became increasingly concerned about the bank's failure to issue a press release or contact the media involved and correct untrue reporting about his position.
He said no steps were ever taken by AIB to correct the untrue reporting about his position. The only suggested press release was in a letter last May which was completely unacceptable to him. He had sought an immediate return to work.
Mr Sheerin said that there was no disciplinary inquiry into his conduct or the way he managed the strategic development unit. He had an exemplary record. At no time had the bank ever indicated that it had any problem with his work or with him; that remained the case.
He believed he was being excluded from employment to ensure that he was being scapegoated and held responsible for the problem.
Very tortured correspondence was engaged in with AIB in relation to his suspension, he said. The bank persisted in saying he was on agreed leave at that time and was not on suspension. While it was correct he took agreed leave in certain circumstances, it was not correct that he had consented to the continuation of that leave.
Mr Sheerin said he had fully and comprehensively co-operated in the investigation by Deloitte & Touche.
Later, he was told that Mr McKeon was to carry out a disciplinary inquiry in relation to him (Mr Sheerin). At the time Mr Keon was asked to investigate Mr Sheerin's alleged misconduct, he himself was the subject of unresolved issues in relation to the matter. On Wednesday last, he was told by letter that a conclusion had been reached that he should be dismissed. He was "absolutely flabbergasted".
No suggestion had ever been made that his work had been other than the highest standard, he said. No charges had been made against him and no disciplinary inquiry requiring his absence from work existed. The bank would suffer no irreparable harm by his going back to work while he would suffer the most grievous harm by being out of work.
Timeline of events in overcharging debacle
1995: AIB inputs 1 per cent margin into its system for non-cash foreign exchange transactions of more than £500.
1996: Bank asks Office of the Director of Consumer Affairs (ODCA) for permission to charge a 0.5 per cent margin on the same transactions. Bank has said this application was an error.
2002: Difference between rates is noticed by AIB's strategic development division. Donal Forde, managing director of AIB, Republic of Ireland, has said executive management was not informed.
March/April 2004: AIB prepares a submission to the ODCA for a new range of margins (prices). According to Mr Forde, the importance of the margin error was now recognised.
Mid-April: The margin is reduced.
Late April: Ifsra gets anonymous call informing it that AIB had been involved in overcharging. Ifsra meets AIB's compliance officers who pledge to investigate.
May 6th: Overcharging is publicly disclosed. Ifsra starts inquiry.
May 11th: AIB chairman Dermot Gleeson appoints Deloitte & Touche to assist with inquiry.
Mid-May: It emerges that level of overcharging was higher than was initially thought in some cases. Séamus Sheerin's departure on unpaid leave comes to light.
July 23rd: Ifsra issues progress report and evidence of more overcharging emerges. Estimates of necessary repayments rise to €50 million. AIB says it will take any disciplinary action needed.
November: Up to 10 executives could face disciplinary action.
December: Final Ifsra report is released. It says at least seven opportunities arose for the bank to disclose the discrepancy to the regulator but it did not. AIB's internal disciplinary procedure continues. A number of those involved have taken legal advice.
