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Noonan needed to act to secure assets

Thursday, February 07 08:00:35

Minister for Finance Michael Noonan said the leaking of a plan to liquidate Irish Bank Resolution Corporation as part of a promissory note deal forced the Government to legislate for its winding up.

Mr Noonan told the Dail that he took action to secure the assets of the bank and that KPMG representatives are now in control of the bank on his behalf.

Following the passing of the legislation, liquidators would be appointed to wind up operations and "IBRC will cease to exist".

A vote on the legislation was passed in the Dail in the early hours of the morning by 113 votes to 35.

It was then sent to the Seanad, where it was passed by 38 votes to six.

President Michael D Higgins signed the Irish Bank Resolution Corporation Bill 2013 into law at Aras an Uachtarain at around 7am.

As part of the winding up, IBRC employment contracts will also go into liquidation, but Mr Noonan said that many of the 800 employees will be re-appointed to "wind-up operations".

The minister said he regretted the abruptness of the way the news was communicated to management and staff, but he said it was "necessary in the public interest", to keep the matter from the public domain until now.

He said the liquidator is poised to carry out his duties and has already taken over and secured IBRC premises in Ireland, London and New York.

Mr Noonan said the Government had made proposals to the ECB on replacing the promissory note and had hoped to announce the IBRC liquidation in conjunction with a deal on the matter.

This was not possible, however, after plans to wind-up the bank were leaked.

Taoiseach Enda Kenny said the promissory notes represent a highly onerous and unfair legacy of the banking crisis.

He said notes, implemented by the previous government, continue to be an enormous burden for Irish tax payers.

Mr Kenny told the Dail that the Bill was approved by Government in a meeting yesterday evening and added that the debt weighs heavily on Ireland as it tries to enter the markets.

The Taoiseach said that restructuring the promissory notes will lead to economic recovery and will help both public and market confidence on the path to fiscal consolidation and economic reform.

He said the Bill closes a sad economic chapter and that while Irish people may be poorer after the past number of years, they are wiser.

He said he believed that "the decision to liquidate the IBRC was a step in the right direction".

Earlier, Fianna Fail's Finance spokesperson Michael McGrath said his party is prepared to take "in good faith" that not passing this bill exposes IBRC and the State to substantial risk.

He said he had no objection in principle to IBRC being wound up with immediate effect.