20,000 failed to claim free shares

Irish Permanent had some 20,000 account holders who did not claim their free shares when the building society floated on the stock market, the DIRT inquiry was told.

Mr Roy Douglas, chairman of Irish Life and Permanent and former chief executive of Irish Permanent, told the inquiry the account holders did not claim their shares within three years.

The building society floated in 1994. Of that 20,000, just over 2,000, or 10 per cent, had non-resident addresses, he said.

The chairman of the inquiry, Mr Jim Mitchell, called on the company to supply the Public Accounts Committee with the number of those accounts which had an address for correspondence within the jurisdiction.

Mr David Kelly, head of the internal audit for Irish Life and Permanent, said a recent "exercise" identified almost 1,000 accounts which were non-resident but which had Irish addresses.

He said this was due to a clerical error and because of that, the payment of DIRT was calculated and paid to the Revenue Commissioners. It arose last year but may have gone back to 1997 and amounted to about £70,000 in DIRT. Customers had written to them and they had changed the addresses to resident but did not change the DIRT code.

Mr Mitchell said that during the flotation process, the building society would have written to its depositors and he wanted to know what that "showed up in relation to the truthfulness or accuracy of the addresses". He called on Mr Douglas to supply the information by the end of the week.

The chairman of the committee referred to the Comptroller and Auditor General's report, which showed the bank had 6,423 non-resident accounts for which it could not find declaration forms. He asked what had been done about the tax and arrears due on those accounts.

Mr Kelly said attempts were made to locate the declaration forms and they were now down to about 2,000 accounts for which declarations could not be located. Although the forms could not be located, in many of them there was a note on the file recording receipt of the declaration "but we simply can't find it".

Mr Mitchell put it that it was a breach of the law that thousands of accounts had no declaration forms. Mr David Went, chief executive of Irish Life and Permanent, said the law was that a deposit taker had to receive a declaration. He said it was their experience, by and large, that they could find the declaration forms.