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“ On consent, the allegations of fraudulent concealment made against the defendants were withdrawn as part of the settlement last month, the High Court heard at the time.”

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)