Oireachtas committee chair calls for independent inquiry

The chair of the Oireachtas finance committee, Fianna Fáil TD John McGuinness, has called for an independent inquiry into the Davy bond controversy.

There had been enough secrecy, he said. It was not “a private matter” as he said had been claimed by Davy chairman John Corrigan.

Mr McGuinness told RTÉ Radio's Today with Claire Byrne show that the culture of entitlement within the sector needed to be rooted out. There had to be a full inquiry to see if there were other similar transactions. The committee had an obligation to find out the truth of what had happened, he said.

Members of the Oireachtas finance committee will be asking questions of Central Bank representatives this afternoon about the fine imposed on Davy stockbrokers last week.

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Fianna Fáil's justice spokesperson Jim O'Callaghan has said he will be asking why the regulator did not apply to the High Court to appoint inspectors to investigate if there were other similar transactions.

"I'll be asking them why it hasn't invoked the powers the Oireachtas gave it for the protection of investors, to apply to the High Court for the appointment of inspectors to investigate whether there were similar types of transactions," he said on RTÉ radio's Morning Ireland.

“I’ll be asking why it never instituted proceedings against individuals or the corporate entity for what were serious breaches or regulations. I’ll be asking what sanctions the Central Bank imposed on the person in Davy who misled Davy compliance.

“In fact, I’d like to know what sanctions the Davy board imposed on that person when it first became aware of it, and finally, I’ll be asking how a regulated entity can deliberately provide misleading information to the Central Bank during an investigation and the Central Bank views that merely as an aggravating factor.”

The Dublin Bay South TD said the broker “obviously plays an important part in Irish financial services, it needs to get its house in order and the Central Bank also needs to answer questions”.

Davy said on Monday evening that it had closed its bond desk, resulting in four redundancies, as it raced to contain the growing crisis triggered by last week's €4.1 million Central Bank fine and rebuke over breaches of market rules in relation to a 2014 bond deal.

The brokerage said that, following the move, none of the 16 individuals involved in the controversial trade was working for the firm.

‘An example for the entire industry’

On the same programme, Fine Gael TD Neale Richmond asked how many more people were involved in the scandal.

“How much money was made on the deal and has it been returned to employers? From the Central Bank, I want to know what actions can they take, what actions will they take because this is an issue that is an example for the entire industry and we need to show we have full transparency and full clarity.”

“It has a massive knock-on effect for the Irish economy, indeed our entire system when it comes to bonds and treasury management. What’s very important is what are the medium and long term effects of this ruling.”

Sinn Féin TD Maireád Farrell said that cultural change (within the banking sector) would not happen unless there was personal accountability. “What I will be raising with the Central Bank is, what investigation will be taking place in terms of the 16 individuals. Have they sent files to the gardaí?

“I want to know are the Central Bank going to do a wider investigation to find out if this is a once-off or if this is indeed a wider issue. I’d like to know if the other 13 individuals have remained in leadership positions? If they have potentially moved to other positions in other bodies, potentially in public bodies. We need to have these kind of answers from the Central Bank.”

People Before Profit TD Mick Barry warned that it would be naïve to think that the culture of entitlement within the sector, "this feeling that we are untouchable, is confined to a couple of corners of the world of high finance."