Former AIB chief denies knowledge of tax debt

AIB's former chief executive told the Public Accounts Committee inquiry yesterday that he knew nothing about the bank's £100 million potential DIRT liability.

Mr Gerry Scanlan, chief executive from 1985 until 1993, claimed the £100 million estimate had been calculated in an "infantile" and "childish" way. It was a "back-of-beyonds calculation", he said.

He also described as a "conspiracy theory" suggestions that "everyone had organised" to move Mr Tony Spollen, former group internal auditor "aside".

Mr Scanlan said he had been informed in 1991 that Mr Spollen was considering legal action against the bank.

The former chief executive said that when he discussed Mr Spollen's transfer with him, he had said that attributing a "motivation" to it was a serious allegation.

Mr Scanlan had insisted that Mr Spollen's allegations be examined and disposed of.

Mr Spollen's transfer would not proceed until the situation was resolved by the audit committee, Mr Scanlan said. His relationship with Mr Spollen had reached that "kind of final line" where until those allegations were dealt with and examined, he was not getting involved.

"It was in a sense, deputy, his job or my job," he told Mr Sean Doherty TD.

Mr Scanlan said he had no recollection in any "formal sense" of the figure being brought to his attention. He later said he had "no recollection of any sort in regard to a £100 million".

Mr Scanlan also told the inquiry he had no basis for speculating on a "reasonable DIRT liability figure" at the time because, even though he knew of negotiations between the bank and the Revenue Commissioners, "I wouldn't have been involved in the detail of them, nor would I have known the parameters of the figures".

Mr Doherty put it to him that as chief executive it would be "highly important" to AIB for him to know about it. Mr Scanlan said he understood the discussions with the Revenue were coming to a satisfactory conclusion and, if that was the case, "there was no payment as such involved being brought to my notice".

Outlining a sequence of events relating to moves to transfer Mr Spollen, Mr Scanlan said a new position had been discussed in the summer of 1990.

He said his recollection of a meeting with Mr Spollen in summer of that year was that he wished to be sent to Harvard Business School. It was accepted that Mr Spollen would not stay in internal audit forever.

Mr Scanlan said that after a number of executives spoke to Mr Spollen about a transfer in January 1990, he himself had a brief meeting with him to allow him to make representations about why his proposed transfer should take place.

Mr Scanlan said there was "motivation ascribed for the transfer but no specific validation, and that is the beginning of the conspiracy theory that everybody had organised to put Tony aside".