AIB shareholders criticise board at acrimonious a.g.m.

A MOTION to remove Allied Irish Banks chief executive, Mr Tom Mulcahy, from the board, was overwhelmingly rejected by shareholders at the bank's annual general meeting yesterday.

A move by a few dissident shareholders - represented at the meeting by Mr Niall Murphy - to remove Mr Mulcahy as a director were strongly resisted, with only a handful of shareholders believed to have voted for the motion.

Addressing acrimonious the meeting, AIB chairman, Mr Jim Culliton, said suggestions that Mr Mulcahy should be removed were "ludicrous" and "without merit". The board, he said, considered that there was "no justification" for any such resolution.

At the outset of what turned into a three hour meeting. Mr Culliton drew sharp criticism from some shareholders for insisting that they should speak for no more than five minutes on each proposal.

One shareholder, Ms Geraldine O'Boyle, said that in imposing a five minute rule, the bank showed "scant respect" for its shareholders, who take up but a couple of hours of the board's time every year.

Another shareholder Ms Maura O Shea, stressed that the annual general meeting was the only opportunity that shareholders had to find out "what is happening" at AIB, saying she believed the imposed time limit was a "very bad" one.

But Mr Culliton said the rule had been adopted in the interest of having a good annual general meeting, and to encourage many shareholders to contribute.

Other issues raised during the meeting include the bank's donations to political parties, which according to its annual report, amounted to £199,000 in 1995.

Mr Culliton told shareholders that AIB had contributed monies to the various political parties on a "one off" basis, in response to representations from them.

Funds were donated "in the context of new Exchequer funding for political parties", he said, and AIB "didn't expect" to make any further contributions.

Mr Culliton said the bank feels that political parties should be adequately funded to undertake research to the benefit of the wider community, and to this end had donated £76,000 to Fianna Fail, £68,000 to Fine Gael, £36,000 to the Labour Party, £12,000 to the Progressive Democrats and £7,000 to Democratic Left. The amount of money contributed to each party, he said was based on their relative strength in the Dail. He stressed that AIB will not benefit from tax relief on these payments.

The bank also donated a further £750,000 to charities and various voluntary organisations in 1995, including a contribution of £200,000 towards AIB's Better Ireland Awards.

The bank's sponsorship of local events, arts and community, projects and education, he said, exceeded £1 million in 1995.

Other shareholders questioned the board on loans to directors of £4.6 million, as shown in the group's annual report. Mr Culliton said the loans related to the group's executive and non executive directors, but refused to identify individual loans, on the ground of "confidentiality".

Loans to executive directors, he said, were provided according to normal staff terms, while non executive directors paid full commercial lending rates on their loans.

Shareholders approved a 5 per cent increase in basic fees to non executive directors from £19,000 to £20,000 this year, which hem said was a "very tiny" emolument in relation to the irresponsibilities. Last year, its non executive directors earned total fees of £401,000, which apart from the basic £19,000 fee included additional payments to them as directors of AIB's subsidiary companies, fees paid for committee work and the chairman's fee.