Irish Bank Controversy Rages as Government Sets Up Inquiry

Ireland’s government will appoint a judge to investigate some of the dealings of a state-owned bank, as it seeks to quell a controversy that has dominated the political agenda over the past month.

A Commission of Inquiry will examine transactions at the Irish Bank Resolution Corp. between 2009 and 2013 resulting in a capital loss of at least 10 million euros ($11 million), the government said late on Wednesday in Dublin. IBRC was created to wind down the former Anglo Irish Bank Corp., the bailed-out lender which brought the state to the edge of bankruptcy.

The probe will examine whether “every action taken by IBRC management was in the interest of the taxpayer,” said Simon Harris, junior finance minister, in an RTE interview in Dublin on Thursday. “There has been no evidence of wrongdoing, but it is certain to say that there is significant public concern.”

The government has faced calls for a full inquiry from political opponents since April, when independent lawmaker Catherine Murphy raised questions around IBRC’s handling of the sale of infrastructure company Siteserv to a firm owned by Irish telecoms billionaire Denis O’Brien in 2012. The deal involved shareholders receiving a 5 million-euro payment even as the bank wrote off about 100 million euros of the company’s loans, according to opposition members of parliament.

Murphy later said in parliament that O’Brien received a preferential interest rate on his borrowings from the bank, a claim which has been disputed by both the businessman and former directors of the bank.

In a piece Tuesday for the Irish Times, O’Brien said that he had always repaid his loans and interest to Anglo, and that Murphy’s claims were untrue.

Interest Rates

The inquiry, which is due to be completed by the end of the year, will examine “whether interest rates or any extension to interest rates or periods for re-payments were given by IBRC on preferential terms that were unduly favorable to any borrower,” the government said.

The probe will also examine “any unusual share trading” which may suggest “inside information” was at play, the government said.

“As the crisis grows and public confidence is shattered, the government finally moves to do what it should have done on day one” by setting up a full inquiry, Micheal Martin, leader of Fianna Fail, the largest opposition party in parliament, said in a statement on Wednesday.

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