Aer Lingus chairman resigns over AIB controversy

The chairman of Aer Lingus, Mr Tom Mulcahy, who is a former AIB chief executive, has resigned from  the airline following revelations…

The chairman of Aer Lingus, Mr Tom Mulcahy, who is a former AIB chief executive, has resigned from  the airline following revelations this morning that an internal bank report had found he had "tax issues".

Mr Mulcahy was one of five executives who had "tax issues" due to arrangements unconnected to a controversial offshore investment scheme.

Mr Mulcahy's resignation has been accepted by the Minister for Transport, Mr Brennan. The Minister said Mr Mulcahy had made an "outstanding contribution" to Aer Lingus and "faced up to the very difficult and challenging task of crafting and agreeing with management and the workforce a survival plan to initially prevent the airline from collapse".

Mr Mulcahy joined Aer Lingus in August 2001.

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Mr Mulcahy said today in a statement that "not withstanding that my statement to the media in response to AIB's press release of May 27th, clearly states that I am tax compliant and that I have had no knowledge whatsoever or involvement in Faldor Ltd, nevertheless I am of the view that this whole issue draws adverse publicity on Aer Lingus as a State company by association."

Today it was reported that former AIB chief executive Mr Gerry Scanlan and the outgoing chairman of Irish Life & Permanent, Mr Roy Douglas, were two of the beneficiaries of the offshore investment scheme which involved a breach of tax law.

AIB has refused to name the individuals involved in what its chairman, Mr Dermot Gleeson, has described as "completely unacceptable" practices. It said it was not possible to name them for legal reasons.

However, The Irish Timeshas learned that Mr Scanlan and Mr Douglas were investors in Faldor Ltd, a company based in the British Virgin Islands and managed by AIB Investment Managers.

The other individuals who put money into this company were AIB's former deputy chief executive, Mr Patrick Dowling, the bank's former director of strategy, Mr Diarmuid Moore, and Mr David Cronin, the former AIB executive who was in charge of the bank's US treasury operations which was embroiled in a foreign currency fraud in 2002.