AIB Belfry, 2022 update

Belfry-DLWith some foresight, many Irish Investors are sorry they didn’t ponder a little longer over the word ‘Belfry’. This is a bell-tower, or part of a tower or steeple in which bells are hung. It may obliquely have represented a warning bell. The AIB Belfry Funds(2nd to 6th Fund, in particular) are now a major financial debacle that initially involved over 2,500 negatively impacted investors (who invested more than €120M, between 2002 and 2006). This debacle predates the Tracker Mortgage-related compensation scheme.

The Bank tried to evade responsibility through defending legal proceedings, (that commenced in 2014) though the time-barring of fraud claims against it under the Statute of Limitations. However, in 2020 the Supreme Court disarmed this, in place of ‘a sensible and pragmatic approach’.

“ On consent, the allegations of fraudulent concealment made against the defendants were withdrawn as part of the settlement last month, the High Court heard at the time.”

https://www.irishtimes.com/business/financial-services/aib-sets-aside-100m-for-belfry-funds-compensation-1.4638661

Some of these highly geared (i.e., involving back-to-back Borrowings by an intermediary investment vehicle) Investment Transactions anecdotally involved negligent mis-selling, wrongful disclosure in Prospectuses, conflict of interests, fraudulently manipulated file documents on appetite-for-risk inter alia.

AIB apparently will announce operational details on its proposed €100 million recompense fund later this year.  The bank is allegedly reviewing the circumstances of impacted Investors on a “case by case” basis to determine a quantum & entitlement to redress sums.  To date minimal operational details of this scheme have been released to investors about how the AIB Belfry debacle will be resolved.

At a minimum, residual investors should consider submitting a formal complaint against AIB with the FSPO and see what they have to say regarding the current status of such claims. Even though the under-resourced FSPO may eventually do something, their new rules since 2017 are allegedly better as a number of enhanced consumer protections.

If this forthcoming AIB Belfry scheme is anything like the Bank’s Tracker Redress Scheme , processing cases will be like ‘pulling teeth, in slow motion’ with negligible account taken of the the dimensions of (a) the Time-Value-of-money, (b) Opportunity Costs and(c) Consequential losses, inter alia. There is an apparent reluctance for the Financial Regulator to oversee this Scheme,(unlike its establishment & oversight of the Tracker Mortgage Redress Scheme)