My local representative, Fine Gael TD David Stanton, has replied to my request for a Dail question on the CHC scandal.
Thank you for your email below. Just to let you know I tabled the below Dail question to the Minister for Finance today, so should have a response next Wednesday evening. I will pass it on to you as soon as I receive it.
David Stanton TD
Written Question from David Stanton TD
To ask the Minister for Finance if he has received a report from the Financial Regulator in 2009 regarding an investigation into a company (details supplied); if it is intended to publish same and will he make a statement on the matter.
(Details: Customs House Capital)
(See below for my letter to deputy Stanton).
6th December 2011
Dear Mr. Stanton,
In early 2009, after receiving information from an unknown source, the Financial Regulator carried out an investigation into a wealth management company called Customs House Capital (CHC).
Apart from some supervisory and organisational issues the Financial Regulator found no significant problems with the company. The Financial Regulator adopted the following strategy – I quote.
Following the identification of these supervisory concerns, related to compliance and organisational issues, the strategy was to encourage CHC to identify and engage with potential buyers for the firm, which would be the best outcome to protect client investments and funds.
CHC took up this advice and sold its non-property assets to a company called Appian Asset Management.
Within a very short time Appian Asset Management discovered that CHC had been engaged in major fraud and immediately informed the Financial Regulator.
In 2010 the Financial Regulator carried out yet another investigation into CHC and found that major fraud had indeed been going on within the company.
Full details of the 2010 investigation are available to the public on the Financial Regulator’s website.
I requested details of the (alleged) 2009 investigation and was informed that this report was not available to the general public under secrecy laws. (Section 33AK of the Central Bank Act, 1942 (as amended).
The conduct and conclusions of the 2009 report are absolutely crucial in determining whether the Financial Regulator is, as claimed by this government and its predecessor, truly reformed and fit for purpose.
I request that you ask the following questions in Dail Eireann.
Why is the 2010 report legally available while the 2009 report on the same company, on the same matter, is deemed to be a state secret?
Why did the (alleged) 2009 investigation by the Financial Regulator fail to detect the major fraud that was going on right under the investigator’s noses?
Has the Financial Regulator taken any action to determine why its staff failed to detect what a company (which was not conducting an investigation) detected almost immediately on examining the books of CHC?
Why has there been no arrests arising from this matter? It is a verifiable fact that similar cases, in functional jurisdictions, quickly resulted in arrests, charges and prosecutions.
The following is a quote on the matter from High Court Judge Mr. Justice Hogan delivered on 28th October 2011.
In fact, the report describes a long litany of general misfeasance and wrong-doing, ranging from the systematic deliberate misuse of funds, gross impropriety, corporate misfeasance and false accounting to trading in a fraudulent manner.
This request has also been forwarded to a representative of every political party.