Peer challenges HBOS over Irish operations following Flynn revelations
By Ian Fraser
August 28th, 2005
HBOS has been challenged to explain its approach towards recruitment and lending in Ireland – north and south of the border – by the the Northern Irish peer Lord Laird following revelations about the ex-chairman of its Irish arm.
Phil Flynn was chairman of Bank of Scotland’s Irish operation from 2001 until February 2005, but has been charged with a firearms offence and has come under investigation for alleged money-laundering.
Lord Laird of Artigarvan, a cross-bench peer, last week wrote to HBOS chairman Lord Stevenson requesting an urgent meeting with him to discuss the bank’s stance on Ireland.
In February, 2005, Flynn, 64, a former Sinn Fein vice-president, stepped down as Bank of Scotland (Ireland) chairman after his home and offices were searched by the Irish Garda in connection with an investigation into the £26.5 million Northern Bank heist in Belfast.
Flynn’s connection with Bank of Scotland began after it acquired the Irish state-owned small-business lender, ICC, in 2001. Flynn had been chairman of ICC since 1996. His appointment as chairman of the merged unit pre-dated Bank of Scotland’s merger with Halifax.
Even though Flynn stepped down from the bank six months ago, Laird has concerns about his legacy as chairman. In his letter to Stevenson, Laird wrote: “As you are aware, I have taken an interest in the activities of your bank’s branches on the island of Ireland, and in particular the one in Belfast. As more comes to light about the chairman Phil Flynn – who seems to have had your full support – there are more and more questions being asked by all sections of the community. I understand that there has been an internal investigation into the Belfast Branch since June.
“I would like to meet with you or your senior officials as soon as possible in order to clarify the position concerning Flynn’s role in the bank and the lending policy on the island of Ireland.”
Laird, former chairman of the Ulster-Scots Agency and a former Ulster Unionist MP, will also seek clarification from Stevenson on the effects of the Flynn affair on business at its Belfast branch. “I will be seeking clarification on whether any customers have moved their accounts as a result of the publicity surrounding Flynn,” he continued.
In February, Ireland’s Criminal Assets Bureau launched an investigation after £2.3m was discovered in the Cork home of Ted Cunningham, a director of Chesterton Finance and business associate of Flynn. Flynn was a non-executive director of Chesterton.
Flynn has admitted to being an “unrepentant Republican” but has strongly denied any involvement with money laundering. He said he had resigned from his role at BOSI to ensure it was not affected by the publicity. His resignation was accepted and HBOS non-executive director Sir Ron Garrick was installed in his place.
A close aide to the Irish Taoiseach, Bertie Ahern, Flynn was last month charged with possessing a firearm without a licence and has been summonsed to appear in court on October 10.
A bank spokesman said there was no investigation into Bank of Scotland’s £8 billion Irish loan book. He referred to an earlier quote from HBOS spokesman Shane O’Riordain, who said in June: “There is no external or internal investigation, the bank knows its own loan book.”
O’Riordain also said that Flynn’s integrity was not in doubt, given that he had been appointed as ICC’s chairman by the Irish government. “He is by definition a fit and proper person.”
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