Scandal over 'tax dodges' hits Allied Irish Banks

[FBS]

From The Scotsman

ALLIED Irish Banks, Ireland’s largest company, has been rocked by another financial scandal, with the group admitting to involvement in a tax-dodging scheme.

AIB conceded that five senior executives had held funds in an investment company managed by its offshore section that could have been caught up in evading taxes.

The company said an investigation into the affair, involving the Irish Financial Services Regulatory Authority (IFSRA), had been going on for the past nine months.

Chief executive Michael Buckley reacted to the embarrassing disclosures by issuing a statement saying that such activities had "no place in AIB".

It is the latest in a series of scandals to hit the group. In January 2003 John Rusnak, a rogue trader who masterminded a £375.7 million fraud at Allfirst, the former US division of AIB, was jailed for seven-and-a-half years.

And earlier this month AIB admitted overcharging foreign exchange customers to the tune of £9.25m over a period of years, pledging that all the money would be repaid.

An internal bank investigation showed the investment company in question, British Virgin Island-based Faldor, had breached tax laws. A total of £500,000 was held in the firm.

Scotsman